It’s been a slow start for markets in Europe today, with the FTSE100 underperforming on the back of a weak basic resource sector.
Glencore (LON:GLEN) is amongst the biggest decliners, despite announcing that it is on track to halve its debt and restore its dividend early next year. The company reported a net loss of $369m for the half year, while revenues fell to $69.4bn, largely as a result of the slide in commodity prices, particularly zinc, copper and oil production.
At the end of last year debt was estimated to be in the region of $30bn, largely as a result of the company’s decision in 2014 to buy Xstrata, however capital expenditure cuts and asset disposals have helped the company to steer a course whereby that is on course to come down to $17bn by year end.
A slide in oil prices is also weighing on the sector after the latest API inventory data showed a build of 4.4m barrels, outweighing yesterday’s speculation that Iran might be amenable to a production freeze when OPEC members meet at the end of next month in Algiers.
On the upside, advertising giant WPP (LON:WPP) is the best performer after posting better-than-expected results for the last 6 months. Revenues increased to £6.5bn, with the weaker pound helping in terms of positive currency effects, and more positively the UK business performance was better in Q2 than Q1.
House builders are once again showing some early gains, continuing their slow recovery from the sharp drops seen in the wake of the Brexit vote, led by Barratt Developments (LON:BDEV) and Persimmon (LON:PSN).
The pound continues to look well supported despite a slightly weaker-than-expected rise in BBA mortgage approvals for July which came in at 37.66k, down from 39.76k in June. This could have been down to some Brexit anxiety or it could simply be the normal seasonal summer slowdown as people focus more on their holiday plans than buying a house.
US markets continue to trade sideways in a fairly tight range with 30 day volatility tracking at its lowest levels in years, ahead of this week’s Jackson Hole central bank symposium.
On the earnings front, stocks to keep an eye on include electronics retail giant Best Buy (NYSE:BBY) after the company posted better-than-expected Q2 earnings of $0.57c a share on revenues of $8.53bn, after the close last night.
Also on the retail front later today, home ware retailer Williams-Sonoma (NYSE:WSM) gets set to report its latest Q2 numbers, with profit expectations of $0.58c share.
Recent retail updates do appear to be showing some signs of a pickup in consumer spending, however the results are patchy with some retailers outperforming and some underperforming.
The Dow Jones is expected to open 7 points lower at 18,540
The S&P 500 is expected to open unchanged at 2,186.9
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