Barclays' earnings leave markets mixed

In mid-morning trading the FTSE 100 is still in positive territory but off the high of the session.

A Barclays sign outside a branch
Source: Bloomberg

There is a sense of déjà vu in London after the market got off to a strong start only to be brought back down to Earth by the commodity stocks.

Taylor Wimpey shares hit a new seven-year high after the homebuilder more than doubled its dividend. The company kept up with its competitors by posting a steady increase in annual profits and a solid start to the spring selling season. The Help to Buy scheme and a more regulated mortgage market will keep the housebuilder happy.

Barclays registered a 12% increase in underlying pre-tax profits, but when you consider the provisions set aside for PPI and FX manipulation it swings to a 21% drop in profits.  The bank may be at its strongest ‘since the financial crisis’ but the fines and provisions have detracted from the company’s balance sheet. Barclays’ capital structure isn’t under question, and as long as legal costs loom over the bank the share price will remain restricted.

Glencore’s shares are back below 300p after the mega miner took a hit of over $1.1 billion dueto asset write-downs. The trading division delivered a 15% increase in earnings, but it wasn’t enough to prevent core profits slipping by 2% on the year. The company reduced its net debt position to lessen its over-dependence on loans, but the cash flow situation is still strong enough to raise its dividend. 

We are expecting a small retreat from the Dow Jones after the US equity benchmark registered a record close last night. The market is gearing up for the non-farm payrolls report on Friday, and the pullback in the US index futures is just a pit stop before the next leg up. 

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