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Blue-chips predicted to zoom to new record highs ahead of US CPI

Published 15/05/2024, 07:49
© Reuters FTSE 100 live: Blue-chips predicted to zoom to new record highs ahead of US CPI
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Proactive Investors - Burberry Group PLC (LON:BRBY) results are one of those out this morning, with profits down by more than a third as the UK fashion house says the "backdrop of slowing luxury demand has been challenging", which is expected to continue in coming months.

Revenues came to £2.97 billion for the year to 31 March, down 4% but flat if exchange rate effects are ignored and in line with analyst forecasts.

Retail comparable store sales were down 1%, which was worse than the 0.8% decline that City analysts expected.

Adjusted operating profit fell 34% to £418 million but with margins of 14.1% higher than analyst estimate of 13.9%.

The outlook, where management point to "a still uncertain external environment", the first half of the new financial year is expected to remain challenging.

New FTSE highs predicted

The FTSE 100 is expected to zoom up towards new record highs on Wednesday morning, extending gains from yesterday after an upbeat Wall Street session overnight.

On spread-betting platforms, London's index was being called just over 31 points higher, having added 13 points to finish the day before at 8,428.13, just shy of a record closing high.

Last night US stocks shrugged off higher than expected factory gate price inflation figures, with the Nasdaq Composite index ending the day up 0.75%, ahead of the S&P 500 and Dow Jones Industrial Average, up 0.5% and 0.3% respectively.

The big data print of the week, or month, is today, with the US consumer price index due this afternoon.

"Something doesn’t feel right," says market analyst Ipek Ozkardeskaya at Swissquote Bank.

"Yesterday was one of those days when investors insisted on seeing a glass that was one-tenth full as completely full," she said, also noting the producer price data, new US tariffs on Chinese imports, a speech by Federal Reserve president Jerome Powell calling for patience on rates.

"All eyes are on the US CPI update today. Both headline and core inflation are expected to have moderated last month. If that’s the case, the risk rally will likely continue. And if it’s not the case, the risk rally could continue, as well," she said.

In London we have a host of corporate updates, including from Burberry, Imperial Brands (LON:IMB) and Experian.

Read more on Proactive Investors UK

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