• FTSE 100 expected to push higher at open
• Fed chairman Powell reassures on US economy
• Shell (LON:RDSa), Barclays (LON:BARC), BAE Systems (LON:BAES), Diageo (LON:DGE) all report results
FTSE 100 expected to make a strong start to trading on Thursday after a positive finish to trading in the US following the Federal Reserve’s widely expected decision to raise interest rates by 75 basis points.
Spread betting companies are calling the FTSE 100 around 40 points higher in early trading.
What reassured the US markets were comments by Fed Chairman Jerome Powell that rate hikes could slow in the coming months.
Powell also commented that he did not believe the US is in a recession, noting that “there are too many areas of the economy that are performing too well.”
The Dow closed Wednesday up 436 points, 1.4%, at 32,198, the Nasdaq Composite jumped 470 points, 4.1%, to 12,032 and the S&P 500 added 103 points, 2.6%, to finish at 4,024.
Another busy day of corporate news in the UK will also provide direction with a number of FTSE 100 heavyweights reporting results.
Oil heavyweight, Shell PLC (LSE:SHEL, NYSE:SHEL), reported quarter two income of US$18,040mln, up from US$7,116mln in quarter one reflecting higher realised prices, higher refining margins, and higher gas and power trading and optimisation results, partly offset by lower LNG trading and optimisation results.
This included a US$4.3bn net impairment charge following revision og the group’s mid and long-term commodity price assumptions.
Barclays PLC (LSE:BARC) announced plans for a further £500m share buy back scheme as it announced a half year attributable profit of £2.5bn against £3.8bn in the first half of 2021.
But the banking giant said additional litigation and conduct charges in quarter two meant that full year 2022 total operating expenses would now be around £16.7bln against previous guidance of £15.0bln.
Group income was £12.4bn, up 10% year on year, driven strong client activity in Markets, recovery in both Consumer, Cards and Payments (CC&P) and Barclays UK more than offsetting the impact of a weak fee pool in Investment Banking.
BAE Systems held full year guidance and launched a new three-year share buyback programme as it reported half year numbers this morning.
Sales in the six months to June were £10,581mln, up from £10,035mln in the six months to June 2021.
It said it expects full year sales growth of between 2% to 4%, underlying EBIT growth of 4% to 6% and underlying EPS to rise by between 4% to 6%.
Charles Woodburn, Chief Executive said "Good operational performance, execution on our strategy and confidence in the outlook enables us today to announce a 5% increase in the interim dividend as well as initiating a new, three-year share buyback programme for up to £1.5bn."
Diageo PLC (LSE:DGE) chief executive Ivan Menezes remained confident that the business was “well-positioned to deliver our medium-term guidance for fiscal 23 to fiscal 25 of organic net sales growth consistently in the range of 5% to 7% and organic operating profit growth sustainably in the range of 6% to 9%.”
He made his comments as the group reported full year numbers which showed a 21% increase in sales to £15.5bn with growth broad-based across categories, with particularly strong growth of scotch, tequila and beer.
Basic EPS rose by 23.2% to 140.2p and the final dividend by 5% to 46.82p.
6.50am: FTSE seen higher, busy day of corporate news
The FTSE 100 is seen starting Thursday on the front foot, though much of this morning’s attention will be on company announcements as several blue-chip report on their second quarters.
CFD firm IG Markets has the FTSE 100 about 30 points stronger, making a price of 7,380 to 7,382 with just over an hour to go until the open.
Blue-chip investors will be getting their teeth into updates from the likes of Shell, Barclays, BAE, Centrica (LON:CNA), and ITV (LON:ITV).
Last night, on Wall Street, the Dow Jones gained 436 points or 1.37% as the Federal Reserve raised US interest rates by 75 basis points, as expected.
The S&P 500 gained 2.62% to 4,023 whilst the Nasdaq rallied stronger, rising just over 4% to 12,032. And the small-cap Russell notched 2.39% higher to 1,848.