LONDON MARKET EARLY CALL: Higher Call Amid Rush Of Earnings Reports

LONDON (Alliance News) - Stock prices in London are set for a higher open on Friday, with several ...

Alliance News 26 April, 2019 | 6:59AM
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LONDON (Alliance News) - Stock prices in London are set for a higher open on Friday, with several FTSE 100 firms poised to report first-quarter figures following a mixed set of earnings in the US.

The UK corporate calendar has first-quarter results from state-backed lender Royal Bank of Scotland, Anglo-Swedish drugmaker AstraZeneca, advertising firm WPP, insurer Hastings Group, and online takeaway platform Just Eat.

IG futures indicate the FTSE 100 index is to open 14.7 points higher at 7,448.83. The blue chip index closed down 37.62 points, or 0.5% at 7,434.13 on Thursday.

In the US on Thursday, Wall Street ended mixed, with the Dow Jones Industrial Average closing 0.5% lower, the S&P 500 marginally lower, but the Nasdaq Composite up 0.2%.

Amazon after the US close Thursday reported a rise in first quarter profit, to USD3.56 billion from USD1.63 billion, beating analyst consensus. Revenue climbed 17% to USD59.70 billion.

Looking ahead, Amazon has guided for second quarter revenue of USD59.5 billion to USD63.5 billion, potentially beating analyst consensus of USD62.37 billion.

"Amazon just turned in another powerhouse quarter fuelled by its strength in the cloud and advertising businesses, which continues to inflate the company's operating margins," said Andrew Lipsman of eMarketer.

"While Amazon Web Services' momentum continues unabated and is clearly the bigger driver of this profit story at the moment, the advertising flywheel now appears to be in full effect for Amazon and will only be a bigger part of the growth story over the near term."

Chipmaker Intel beat market expectations for both revenue and profit, with the former broadly flat at USD16.06 billion, though profit fell to USD3.97 billion from USD4.45 billion.

However, looking forward, Intel's own expectations of revenue of USD69.0 billion and adjusted earnings of USD4.35 per share are both short of market forecasts of USD71.05 billion and USD4.51 respectively.

Earlier Thursday, industrial firm 3M trimmed its guidance for 2019 adjusted earnings, while Windows operating system maker Microsoft and social network Facebook both reported solid results, beating analyst consensus.

"The reporting season continues in the US and the likes of Microsoft and Facebook helped the tech-focused Nasdaq 100, while the disappointing numbers from 3M weighed on the Dow Jones," commented David Madden.

"There was a jump in volatility in the index futures market as Amazon and Intel reported their latest numbers after the closing bell. Amazon's first-quarter earnings more than doubled and smashed forecasts, while Intel cut its guidance, which sent the shares tumbling in the post market."

The Japanese Nikkei 225 index was down 0.3% in late trade Friday. In China, the Shanghai Composite is off 0.1%, while the Hang Seng index in Hong Kong is up 0.2%.

"Stocks in Asia largely traded lower overnight as traders took their cues from Wall Street. China's Xi confirmed the country won't use currency devaluation for economic gain, and he stated the country will engage in macroeconomic coordination with other nations," added Madden.

The economic calendar has UK BBA mortgage approval figures at 0930 BST and US first-quarter GDP at 1330 BST.

"We're expecting to learn today the [US] economy expanded at a 2.6% annualized rate in the first quarter, rather better than we expected at the turn of the year. Our initial assumption was 1% to 2%, and above the consensus of 2.3%," said Ian Shepherdson of Pantheon Macroeconomics.

"In the 10th year of an economic expansion, and especially given the fading push from fiscal easing, a 2.6% growth rate is very respectable."

"And note whatever the number prints, it is a pretty good bet actual growth was stronger, because a long-standing seasonal adjustment problem tends to depress reported growth in the first quarter," he added.

By George Collard; georgecollard@alliancenews.com

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