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London pre-open: Stocks to rise as investors eye US earnings

By Michele Maatouk

Date: Friday 12 Apr 2019

London pre-open: Stocks to rise as investors eye US earnings

(Sharecast News) - London stocks were set for a positive open on Friday despite mixed sessions in the US and Asia, as investors eyed the start of the first-quarter US earnings season.
The FTSE 100 was called to open 14 points higher at 7,431.

CMC Markets analyst Michael Hewson said: "Reports of additional progress on a US-China trade deal don't appear to have been enough to prompt much interest with most attention set to be on today's Q1 numbers from US banks JP Morgan and Wells Fargo, both important bellwethers of the US economy.

"Banks across the board have been finding it difficult to maximise returns in the current low rate environment. Trading in the first three months of this year has proved to be even more difficult, with inversion of the US yield curve prompting JP Morgan to review its staffing levels in news out last month. With the bank missing profit estimates in its last quarter for the first time in 15 quarters, and the recent announcement of job cuts in its asset and wealth management divisions, today could well see another disappointment.

"Wells Fargo, on the other hand offers an insight into the US housing market, and here we've seen a significant amount of weakness in recent months. This could well be another disappointing quarter."

On the UK corporate front, transport company National Express said it had bought a of 60% stake in WeDriveU, an employee shuttle company in San Francisco's Silicon Valley, for $84.3m (£64.5m) with an option to buy the rest over three years.

Games Workshop said trading since January has "continued well" with sales and profits ahead of last year. The tabletop gaming retailer said it expected profit before tax for the year to 2 June will be roughly £80m.

Plus500 posted a drop in first-quarter revenue amid "subdued" financial markets, with the number of active customers and average revenue per user both down amid low levels of volatility.

In the three months to the end of March 2019, revenue slumped 65% to $53.9m, while the number of active customers edged down 4% to 97,921 and ARPU fell 64% to $550.

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