Proactive Investors -
- FTSE 100 down 7 points at 7,368
- Barclays (LON:BARC) lower after mixed results, cuts UK guidance
- CAB Payments share plummet, cuts guidance
DFS Furniture lifted by ScS bid
Some other stocks on the move today worth keeing an eye on.
Shares in DFS Furniture has jumped 7.2% in the wake of the bid for ScS Group - which has sent its shares 60% to the good - as investors look for the next bid target in the sector but it is not such good news for Softcat (LSE:SCT), down 11%.
The IT infrastructure and services provider delivered a strong set of results and held guidance although it indicated profits would be more weighted to the second half.
Analysts at Jefferies noted this caveat and suggested while existing investors will "likely back management to deliver sustainable growth," new investors may "prefer to wait for greater visibility on the 2H trends."
Kingfisher faces weaker French demand, competition threat
The FTSE 100 continues to rally from earlier lows, now down 13 points, at 7,362.
Banks remain a drag with Barclays, Lloyds (LON:LLOY) and NatWest (LON:NWG) all lower but mining stocks and utilities are providing support.
One share in the red though is DIY retailer, Kingfisher (LON:KGF), the owner of B&Q, Castorama, Brico Dépôt, Screwfix and TradePoint.
Shares are 1.9% lower after downbeat comments from JPMorgan (NYSE:JPM).
It thinks consensus financial 2025 forecasts for both the UK and France are over ambitious – it is around 10% below consensus - particularly with the latter seeing signs of a weakening consumer.
It has reiterated an underweight rating and placed the stock on negative catalyst watch ahead of the third quarter trading update on November 22.
JPM pointed out a September 2023 survey results show a significant worsening in the outlook for French DIY spend with the net balance falling to -22% while recent profit warnings in France could signal a weakening consumer.
Longer mortgages in France provide some protection in a rising rates environment, but housing starts and new mortgages have nevertheless materially deteriorated, now 29% and 43% below pre-pandemic levels, the bank pointed out.
JPM reckons softening consumer demand could be exacerbated if key competitor, Leroy Merlin, expands its increasingly promotional stance from Poland into France.
PMI consistent with fall in GDP
Ruth Gregory at Capital Economics saiddespite edging higher the PMI is at a level that, historically, has been consistent with a contraction in real GDP.
"This supports our view that a mild recession is underway and that the Bank of England has finished hiking interest rates," she said.
The rise in the flash composite PMI was a bit weaker than expected with the improvement entirely due to a rise in the manufacturing output balance.
While this suggests the manufacturing sector may be over the worst it is still consistent with actual manufacturing output falling by around 1-2% a quarter.
"Overall, neither October’s PMIs nor today’s labour activity release contained anything too concerning for the Bank of England.," she felt.
"That gives us more confidence in our view that the Bank will keep rates on hold at 5.25% again next week."