It’s not often that RBS is the top performer in the FTSE, but that is the case today. A near doubling of first quarter pre-tax profit has seen its stock jump 11%, as the banking sector enjoys a second consecutive day of good news. A few keen souls have already started talking about the beginning of the sale of the government’s majority stake in the bank, but this is premature. One good quarter does not a strong bank make. Compared with Lloyds, RBS is still a long way from full health and Lloyds probably remains the better bet for prudent investors, especially given the well-advanced dividend plans.
Intercontinental Hotels has been lifted today by news of a special dividend on the back of yet more good results; with more disposals likely as it concentrates on a core portfolio of strong performers.
Overnight estimates for today's non-farm payrolls have broadened out, but even the lowest estimate around 155,000 is still above the average rate of job creation in the US this year. Given the shock GDP reading, today’s number needs to be fairly strong to keep the upward momentum going in stock markets after four consecutive days of gains.
Ahead of the open we expect the Dow Jones to start five points higher at 16,564.