World Cup gives GVC Holdings a boost, Smiths Group sees good performance across divisions
London open
The FTSE 100 is expected to open 30 points higher on Wednesday, having closed up 0.34% to 7,626.33 on Tuesday.
Stocks to watch
GVC Holdings, the online gaming group that acquired bookmaker Ladbrokes in March, got a not-unsurprising boost from the World Cup in recent weeks that helped growth accelerate in the third quarter. Helped by 11% growth in the second quarter, group net gaming revenue grew 8% in the first half.
Smiths Group issued its pre-close trading update on Wednesday, ahead of its annual results for the year ending 31 July, reporting that it had successfully returned to growth with revenue for the 11 months ended 30 June up 3%, on an underlying basis. The FTSE 100 company said that reflected the anticipated acceleration of its growth rate in the second half, with good performances from John Crane, Smiths Detection, Smiths Interconnect and Flex-Tek. It said the group, with the exception of Smiths Medical, was expected to deliver a full year performance in line with expectations.
Third-quarter revenues at EasyJet rose 14%, to £1.6bn, with passenger numbers ahead 9.3% at 24.4 million. Looking ahead, the budget carrier said it expected full-year capacity to grow by around 4.5% while headline profits for the 12 months to 30 September should come in between £550m and £590m, up on previous guidance of between £530m and £580m.
Newspaper round-up
Theresa May threatened Conservative rebels with a general election this summer if they defeated her plans on customs after Brexit. Tory whips issued the warning to Remain-backing MPs, led by the former ministers Stephen Hammond and Nicky Morgan, minutes before a crucial vote last night that would have kept Britain inside a customs union. - The Times
The European Union's financial system will come off worse in a no-deal Brexit, Mark Carney told MPs, as another chaotic day in Parliament threatened to tip Britain closer to a scenario he said would also have “big economic consequences” at home. - Telegraph
Everyday dairy products such as butter, yoghurt and cheese could become luxury items in Britain after Brexit, with price rises being caused by the slightest delay in the journey from farm to table, a report by the London School of Economics finds. - Guardian
President Trump lurched into damage control mode last night, insisting that he had “full faith” in his intelligence agencies and conceding that Russia had tried to influence the 2016 election. He also vowed to defend US democracy from future attacks but insisted that his election victory owed nothing to the Kremlin. - The Times
Scotland's shops have enjoyed their largest sales hike for more than four years thanks to the heatwave and a "bumper summer" of sport, according to figures published on Wednesday. Analysis published by the Scottish Retail Consortium and KPMG found total sales between May 27 and June 30 increased by 2.7 per cent compared to the same period last year. - Telegraph
US close
US stocks recovered from a poor open to finish green on Tuesday, as investors digested a disappointing quarterly update from streaming giant Netflix and a Congressional testimony from Fed chair Jerome Powell.
The Dow Jones Industrial Average finished up 0.22% at 25,119.89, the S&P 500 was ahead 0.4% at 2,809.55, and the Nasdaq 100 managed gains of 0.63% to 7,403.89.
As far Powell's testimony was concerned, the chair's semi-annual Monetary Policy Testimony broke no new ground, according to Ian Shepherdson, chief economist at Pantheon Macroeconomics.
However, Shepherdson noted that Powell's use of "for now", when stating that the Fed expects to keep raising rates "gradually", could be seen as opening the door to more dramatic action down the road if inflation rises much above the target.
"Powell has made it very clear that a modest overshoot won't trigger panic at the Fed, emphasizing again that the target is 'symmetric' and that only inflation 'persistently' above or below the target would make the FOMC 'concerned'," said Shepherdson.
Powell remained bullish on growth, specifically pointing out that the Fed realises that second-quarter GDP was "much stronger" than the first, but made no reference to the possible impact of business tax cuts on future growth or productivity.