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London pre-open: Stocks seen up ahead of US inflation

By Michele Maatouk

Date: Wednesday 12 Jan 2022

London pre-open: Stocks seen up ahead of US inflation

(Sharecast News) - London stocks were set to rise at the open on Wednesday following a positive session on Wall Street, as investors eye the latest US inflation reading.
The FTSE 100 was called to open 44 points higher at 7,535.

CMC Markets analyst Michael Hewson said: "Because of yesterday's US rebound, and a decent Asia session, which was helped by some softer China inflation numbers, markets in Europe look set to open higher, as we look ahead to today's US CPI report for December, which could well once again spark volatility, if we get a number well north of 7%.

"The recent decision by the Federal Reserve to accelerate its tapering program to $30bn a month confirmed that Fed officials are now much more worried about inflation, than it is about the labour market.

"With a March rate hike now almost a done deal, today's US CPI is likely to be a key signpost in the wider discussion, on how many more hikes are coming down the pipe, as central banks wrestle with a dilemma of rising price pressures, the risks of an economic slowdown caused by tighter restrictions, and a decline in consumer confidence."

In UK corporate news, JD Sports lifted annual profits guidance after revenues rose 10% in the 22 weeks to January 1 and US fiscal stimulus boosted trading.

The sports fashion chain said it expected pre-tax profits of at least £875m compared with previous expectations of £810m. It added that US fiscal stimulus "may have contributed up to £100m to this result".

Distribution and services firm Bunzl acquired New Jersey-based PPE distributor Tingley Rubber for an undisclosed sum. Bunzl said the US firm, which focuses on protective footwear and apparel, generated $68.0m in revenues during 2021.

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