Proactive Investors -
- FTSE 100 up 100 points at 8,127
- Legal & General ups divi despite flat profits
- House prices grow at fastest rate since January
Honda posts record profits
Honda saw its profits reach a quarterly record in the three months to June after it was helped by impressive sales of its hyrbid vehicles in the US and Japan.
Net profit at the Japanese automaker increased by 8.7% to £2.1 billion (394.6 billion yen), while sales rose close to 17% to £28.8 billion.
Despite the record quarterlies, annual earnings targets were kept unchanged, with Honda predicting net profits of £5.3 billion and revenues of £108 billion.
Honda added that its car sales were "robust" throughout the quarter, and recieved a tailwind after it raised prices of its hybrid models in Japan and the US.
Overall, unit sales dropped during the three months due a poor performance in China as comeptition continues to ramp up.
Wall Street to open higher
US markets are set for another day in the green after all three of the main indexes lifted around 1% on Tuesday.
The Nasdaq is on track to begin trading nearly 230 points higher at 18,422, while the S&P 500 is positioned to rise 55 points to 5,323.
The Dow Jones is set to open more than 280 points higher at 39,423.
"The lingering question now is whether the concerns that pushed the market into a cascade of selling are alleviated," said LPL Financial chief global strategist Quincy Krosby.
"Pockets of volatility are expected to continue as August and September give way to a calmer seasonal period, however, it’s important to remember pockets of opportunity are always on the other side of the storm.”
Hewlett Packard deal with Juniper approved by CMA
Hewlett Packard Enterprise has had its planned takeover of Juniper, the networking tool developer, approved by the Competition and Markets Authority.
The CMA launched the initial investigation back in June after the US tech group announced the £11 billion offer in January.
Acquiring California-based Juniper is expected to double Hewlett-Packard's networking business.
The all-cash deal values Juniper at $40 per share, and HPE said it expects the deal to close later this year or early in 2025.
“HPE’s acquisition of Juniper represents an important inflection point in the industry and will change the dynamics in the networking market and provide customers and partners with a new alternative that meets their toughest demands,” HPE CEO Antonio Neri said in a statement back in January.
Sports retailers shake off Puma's warning
Nearly all major markets in Europe are up today, with the main indexes in Germany, Spain, France, and the UK all posting gains of around 1.5%.
However, for German fashion giant Puma it's been a different story, with its shares down close to 10.5% on the back of concerns over consumer spending.
Reaching their lowest point since 2018, shares dropped after the sportswear company warned that macroeconomic and geopolitical factors may squeeze profits more than previously expected.
The German company said these challenges were weighing on consumer sentiment, while shipping costs are also higher, leading it to give guidance for 2024 operating profit of €620-670 million, compared with earlier guidance of €620-700 million, and last year's €621 million.
Sports retailers in the UK have appeared to of shaken off any read-across from Puma, with JD Sports and Frasers, the owner of Sports Direct (LON:FRAS), both lifting by 2%.
Nike (NYSE:NKE) and Adidas (ETR:ADSGN) held flat, with the former set to begin trading later today in the US.
London asset manager fined for "serious breaches"
H2O, the asset manager, has been told it must repay its investors €250 million after the financial watchdog found it had failed to undertake proper due diligence for some of its riskiest bets.
Britain's Financial Conduct Authority (FCA) said the London-based firm had made "serious breaches" when investing in Tennor Group, a range of companies owned by German financier Lars Windhorst.
Following an investigation by the FCA, it found that there were at least 50 examples of staff members having recieved hospitality that was not correctly declared, including the use of a private jet and a superyacht.
H2O, which at one point had close to €30 billion of assets under management, was also found to have provided the FCA with misleading and incorrect statements and documents, including falsified minutes from meetings.
As punishment, the firm has agreed to pay €250 million to investors whose stakes still remain stuck, while H2O will also cancel its UK authorisation by the end of the year.
Steve Smart at the FCA said: "H2O’s job was to manage its funds properly and protect investors. It failed to do this and, to make matters worse, it repeatedly provided misleading information to the FCA.
"Through this settlement the FCA has secured money for affected investors and agreement that H2O will stop operating regulated business in the UK."
Coca-Cola (NYSE:KO) HBC falters on higher financing costs
As the FTSE 100 one of its best sessions in the last few weeks, up more than 1%, some of its constituents haven't been as lucky, including Coca-Cola HBC.
Shares of the bottling segment of the soft drinks empire dropped 1.5%, making it one of the day's biggest fallers, despite having seen forecasts lifted.
Coca Cola HBC (LON:CCH) reported organic revenue growth of 13.6% to €5.17 billion (£4.44 billion) in the first six months of 2024, leading to a full-year revenue forecast between 8% and 12%.
The group had previously guided to a range of 6% and 7%. Earnings before interest and tax (EBIT) forecasts were also upgraded.
Investors may have been rattled by Coca-Cola HBC’s surging finance costs.
Comparable earnings per share of €1.04 were down 1.7% year-on-year due to these higher finance costs.
Full-year financing costs are now expected in the range of €60 million and €75 million compared to the previous forecast range of €50 million and €70 million.
US to avoid recession, reckons Goldman boss
The US will avoid a recession, the boss of Goldman Sachs (NYSE:GS) has said, adding to the growing narrative that markets and economies should be able to recover from this week's sell-off.
David Solomon, chief executive at the US bank, claimed he believed the Federal Reserve would avoid implementing an emergency rate cut and may instead wait until Autumn.
Market derivatives on Monday showed a 60% chance that the US's central bank would cut rates within the next week.
It is now odds-on for the first rate cut to come in September, with a 58% chance that it will be by 0.5%.
Solomon said on the The David Rubenstein Show: "I don’t expect that you’ll see anything before September.
"The economy will chug along and we probably won’t see a recession. Based on the economic data we’re seeing now and the messaging from the Fed, I think it’s likely that we’ll see a cut or two in the fall."
Vodafone jumps on share buyback
Shares in Vodafone (LON:VOD) have jumped close to 2.5%, making it one of the top FTSE 100 risers today, after it announced €500 million (£429.5 million) share buyback programme.
Vodafone tapped Wall Street banking giant Goldman Sachs to facilitate the buybacks, which will see around 2.5% of Vodafone’s current market value returned to share holders.
“The sole purpose of the programme is to reduce share capital,” said the company.
Vodafone previously committed to returning €2 billion back to shareholders following the sale of its Spanish business to Zegona Communications for €5 billion.