Lloyds Bank (LON:LLOY) tumbles back to 6-month low
One of the worst performers on the FTSE 100 today is Lloyds Bank with the stock dropping more than 4% after the release of its latest trading results. A half-year profit of £2.23B is not a bad return in itself, but it does still represent a decline of 4% on the corresponding period last year. Underlying profit remains pretty solid and lower restructuring costs are a definite plus but these have been offset by yet another large provision for the misselling of PPI (£550M) and this continues to be a large millstone around the neck of Lloyds.
The stock has been under pressure in recent sessions before gapping sharply lower today and with the prospect of a no-deal Brexit increasing there could be more pain to come for shareholders. Lloyds role as the UK’s largest mortgage lender leaves it exposed should there be even anything near the sort of house price shock that some have feared while a slowdown in economic activity would hit the bank’s loan book too.
Apple shares to gain after earnings update
It’s set to be a good afternoon for investors in Apple (NASDAQ:AAPL), with the stock called to open higher by as much as 4% after the latest trading update was delivered last night. For the fiscal 3rd quarter ended June, Apple posted a 1% rise in revenue to $53.8B and a 7% drop in earnings per share to $2.18. Both of these reflect favourably compared to consensus analyst forecasts of $53.4B and $2.10 respectively and an optimistic outlook for the next quarter that predicts revenue above current forecasts have both contributed to the positivity surrounding the release. For the first time in 7 years iPhones sales dropped to less than 50% of revenue, but CEO Tim Cook put a positive spin on this claiming the change was a result of successfully diversifying away from a single product.
The UK blue-chip index has pulled back further after hitting it highest level since last August yesterday with the global equities in general trading a little tentatively ahead of this evening’s eagerly anticipated Fed rate decision. The US central bank are expected to cut rates for the first time in a decade later on, but given the high expectations amongst market participants there is plenty of scope to disappoint.
For an example of how this could play out, a look at the reaction in the German stock market to last week’s ECB decision could provide a template. President Draghi disappointed markets with the Governing Council’s latest communication and the German Dax has seen two large down days of around 200 points in the 4 full sessions since. Stocks here in London could see their wings clipped after this latest foray higher should the Fed disappoint and spark a sell-off on Wall Street.