Proactive Investors -
- FTSE 100 sinks 15 points to 8150
- HSBC (LON:HSBA) promotes CEO from within
- King's speech due after 11am
Adidas, Tiktok, Github and SpaceX
Here's a few stories from some well-followed overseas companies.
As its collaboration with controversial musician Kanye West comes to an end, Adidas AG (ETR:ADSGN) has raised its full-year sales guidance after posting its first annual loss since 1992 earlier this year.
The German sportswear giant had a long-running sneaker collaboration with the rapper known as Yeezy, terminated in the wake of a raft of antisemitic statements, with the last remaining Yeezy stock sold at cost and contributing to around €50 million in profits in the second quarter.
GitLab, the software developer part-owned by Google (NASDAQ:GOOGL), is exploring a sale and has reportedly attracted interest from potential buyers.
The company is working with investment bankers on the process.
Potentially good news for TikTok, as Donald Trump expressed support amid potential bans if its Chinese parent company ByteDance does not divest its US assets.
In a TV interview, Trump emphasised the need for competition, contrasting TikTok with Facebook (NASDAQ:META) and Instagram. Despite previously labelling TikTok a threat, Trump joined the platform recently.
And last and by many means least, Elon Musk has confirmed the for-some-time-expected relocation of his X/Twitter and SpaceX businesses to Texas – with a dig aimed at California’s Democrat state governor Gavin Newsom.
Commenting on California’s new rules relating to the disclosure of child gender identity in schools, Musk posted on his X platform “this is the last straw”.
Pound hits year's high
The only major currency to rise against the US dollar this year is the pound, analysts have noted.
Last week, on the back of a better-than-expected GDP update the sterling hit a four-month high after the inflation numbers.
Today, GBP/USD is up 0.35% at 1.3019, up 2.5% over the past six months, and also up 0.2% versus the euro today at 0.8388.
"Not bad for the emerging market North Atlantic peso eh?" exclaims market analyst Neil Wilson at Finalto, who called the CPI data "slightly warmer than expected".
He notes that traders say this is not enough for an August cut, with bets pared on an August cut down to 25%, in line with the comments from BoE rate-setters Jonathan Haskel and Huw Pill, who both recently indicated the MPC would hold fire for now.
"Gilt yields rose, with the 2yr rising 4bps to above 4%, which has helped put a bit of a bid into sterling.
"The inflation data definitely supports a stronger pound narrative at this stage," adds Wilson, adding that a breach at $1.30 this morning "could then see the stage set for a run to the July ‘23 highs at 1.31" and if we this occurs "we should consider a new trading range for the pound between $1.30 and $1.40".
He adds: "We should not discount the effects of the politics on this – as discussed before the new govt introduces – for now, in the eyes of investors at least – a degree more clarity and consistency in terms of policymaking.
"There is clearly a reset and people are looking at the UK with fresh eyes."
Mid-morning update
London’s blue-chip index was down 23 as UK inflation remained in line with the Bank of England's 2% year-on-year target last month.
The consumer price index rose 0.1% over the month of June, as expected, which meant the annual rise in CPI remained at 2.0% for the second month running. That might postpone an interest rate cut until September, economists suggested
HSBC has gone in-house for its new chief executive with finance chief Georges Elhedery appointed to the role of group chief executive. Shares in the Asia-focused bank barely moved on the announcement.
All eyes now will be on Keir Starmer’s plans as his first King’s speech is read out with housing, labour laws, railways and his predecessor’s smoking ban set to feature.
The speech is due to begin around 11.25am, with the House of Commons reconvening at 2.30pm for a debate on what was confirmed - read what to expect here.
H&W creaking
Belfast shipbuilder Harland & Wolff Group Holdings PLC (LON:HARL) is apparently teetering on the verge of collapse as Labour prepares to reject a £200 million government loan request.
According to a Financial Times report, Labour will refuse to act as guarantor to the critical funding, with one Whitehall figure calling it a “deeply irresponsible” use of the public purse.
The company is seeking a £200 million facility from UK Export Finance to keep the business afloat.
Earlier this month, the group warned that its “ability to execute new and large contracts would be adversely affected” should it fail to secure the lifeline.
London stocks battling for position
Both the FTSE 100 and FTSE 250 have started on the back foot, but have bounced slightly from their initial lurches lower, down 0.1% and 0.2% respectively.
Miners and financials are weighing on the blue-chip index, with Legal & General, Intermediate Capital, Aviva (LON:AV) and some investment trusts mingling with the likes of Antofagasta (LON:ANTO), which is bottom of the list, down 2.9%, and Glencore (LON:GLEN), down 0.8%.
HSBC shares are down slightly, 0.16%, on the back of the internal promotion as its new CEO.
Babcock (LON:BAB) is down 1.6% after cutting its profit guidance due to a £90 million loss on a Royal Navy contract.
Genus (LON:GNS), the animal genetics company, is the biggest faller on the mid-cap index, down 4.5% despite reporting underlying profit slightly ahead of previous guidance in February.
Analysts at Peel Hunt (LON:PEEL) note that volumes at its ABS bovine genetics arn have continued to be weak, while currency headwinds are likely to result in a £5 million impact.
After the UK inflation reading earlier, the market is now pricing a 33% probability of an August rate cut, and a 74% September probability.