SSE's first quarter profits take a hit, underlying sales growth slows at Unilever
London open
The FTSE 100 is expected to open nine points lower on Thursday, having closed up 0.65% at 7,676.28 on Wednesday.
Stocks to watch
SSE said first quarter operating profits would take an £80m hit due to Britain's hot summer and “persistently high gas prices” combining to cut renewable output, customers using less energy and increased costs. The utility added that fully year results could also be hit.
Unilever's underlying sales growth slowed in the second quarter due to the impact of a truckers' strike in Brazil but the company remained confident of hitting full year targets. Underlying sales growth, excluding the sale of its spreads business that was completed at the start of July, rose 1.9% in the three months to 30 June, meaning the consumer goods giant increased sales 2.5% in the first half of the year.
Business information and events group Euromoney Institutional Investor updated the market on its trading for the period from 1 April to 19 July on Thursday, reporting that since its interim results on 17 May, trading had continued in line with the board's expectations. The FTSE 250 company said underlying revenue in the quarter to 30 June was flat compared to last year, when adjusted for exchange-rate differences, acquisitions, disposals and discontinued operations. Reported revenue of £107.9m for the quarter was down 9% year-on-year, largely due to exchange and the sale of the Global Markets Intelligence Division (GMID), which was entirely a subscription-based business.
Newspaper round-up
Theresa May will go on a tour of Britain this summer in an attempt to convince sceptical Tory members to back her plan for Brexit. The scale of unrest among grassroots Conservatives emerged yesterday as Boris Johnson used a resignation speech to galvanise the party’s membership against the prime minister’s Chequers plan. - The Times
Police are believed to have identified on CCTV cameras the suspected perpetrators of the Novichok attack on Russian former spy Sergei Skripal. Officers think several Russians were involved in the attempted murder of the former double agent and daughter Yulia in Salisbury and are looking for more than one suspect. - Telegraph
Donald Trump now says he holds the Russian president, Vladimir Putin, personally responsible for his country’s meddling in the 2016 presidential election, further walking back a statement on Monday that drew bipartisan rebukes. - Guardian
Property prices in Britain are growing at their slowest annual rate for nearly five years, according to latest data from the Office for National Statistics. In the 12 months to May, house prices increased three per cent, down from 3.5 per cent in April. The last time growth was as low as three per cent was August 2013, historical data shows. - Daily Mail
Fashion is a fickle business. It is also a very wasteful one, at least according to Burberry’s latest accounts. The upmarket label has destroyed more than £28 million of unwanted products over the past year. Even at its notoriously high prices, that is the equivalent of more than 20,000 of its signature trench coats. - The Times
US close
US stocks finished on a mixed note on Wednesday, with Morgan Stanley boosted by solid second-quarter earnings, as investors digested the latest testimony from Federal Reserve chairman Jerome Powell and some disappointing data on housing starts.
The Dow Jones Industrial Average ended the session up 0.32% at 25,199.29 and the S&P 500 was ahead 0.22% at 2,815.62, but the Nasdaq 100 fell 0.19% to settle at 7,390.13.
Appearing before the House Financial Services Committee for the second day in a row, Powell reaffirmed the Fed's plans to lift interest rates gradually, for now.
“Fed chair Jerome Powell’s second day of testimony didn’t provide too much in the way of surprises in the wake of yesterday’s positive comments, as investors look ahead to tonight’s June Beige Book, which after today’s disappointing housing starts and building permits data will be examined for other areas of possible weakness,” said Michael Hewson, chief market analyst at CMC Markets earlier.
That Beige Book showed that the fast-expanding US economy was reaching saturation point, with raw materials costs and shortages of skilled workers starting to bite.
Adding to that was the high chance of more tariffs and an escalation of tensions to an all-out trade war.
This edition of the book did carry more optimism than earlier in the year, with the Fed reporting that 11 out of the country’s 12 regions were growing at least at a ‘modest’ pace.