Early Morning Call: FTSE 100 opens higher amid Ocado, Bellway earnings reports
Ocado's retail revenue rose 3.4% in the first quarter while Bellway's revenue rose to a record level, but reservation rate fell by 31.7%.
Equity market overview
Equity markets mostly rose yesterday, with only the Nasdaq ending the session lower. Fears of a banking crisis continued to ease, as First Citizens Bancshares agreed to acquire most of Silicon Valley Bank.
Overnight, indices traded higher in the APAC region. Australia’s S&P/ASX 200 lead gains as the country’s retail sales index rose 0.2% in February, compared to a revised 1.8% rise in January, beating median expectations of a 0.1% rise. Year-on-year (YoY), retail sales rose 6.4%.
With inflation at 7.4% in January in the country, this means that retail sales volumes are contracting against price increases. The market now awaits tomorrow's Monthly CPI indicator, forecast to ease to an annual rate of 7.1% in February.
Reserve Bank of Australia (RBA) chief, Philip Lowe has said the central bank was closer to pausing its rate increases. The central bank has already lifted rates by 350 basis points to an 11-year peak of 3.6%. The RBA decision is next Tuesday, 4 April.
A few macroeconomic indicators are expected this afternoon across the Atlantic.
At 1.30pm expect wholesale inventories and goods trade balance, followed half an hour later by the S&P/Case-Shiller home price and house price index, and at 3pm by the Conference board consumer confidence.
Elsewhere on the equity markets Ocado's retail revenue rose 3.4% to £584 million in the first quarter (Q1). Average orders per week rose 3.6% and the average basket value came flat.
Bellway's revenue rose to a record level for the group, but reservation rate fell by 31.7%.
In the US, Walgreens Boots Alliance (WBA) is scheduled to post earnings for the second quarter (Q2) before the market open. Analysts expect earnings of $1.10 per share, on revenue of just over $33.5 billion. But over and above earnings, investors want to know more about the future of Boots. Some of them, as well as some WBA board members, want the group to prioritise the US market, and move away from traditional retail to focus on US private health care. This would mean either a spinoff of Boots or even a straightforward sale.
It is not the first time WBA has wanted to part with its UK branch. It tried to sell Boots for the first time in January 2022. The price tag was then £7bn, but Walgreens Boots Alliance did not find a buyer and decided to call it off five months later.
Tonight, after the close of the US markets, Micron Technology, an all-sessions stock on the IG platform, is poised to post a loss of 66 cents per share. Revenue is expected to continue declining to $3.74bn. Three months ago sales fell 41% to just over $4bn.
The semiconductor industry is still suffering from distortion originating from the Covid-19 pandemic. Orders soared during 2020 and 2021 to supply a technology boom, pushing Micron and other chip makers to produce more. Now, in the context of fears of a recession, they are left with excess inventories and are being forced to wind down their capital investment budget.
Oil prices are easing this morning after a rally yesterday that took WTI and Brent over $72 and $77 respectively.
Oil prices rose at their fastest pace in four months, due to a conjunction of news. The acquisition of SBV by First Citizens Bank triggered a wave of optimism across asset classes. Also, according to an annual forecast by a research unit of China National Petroleum, China's crude oil imports are expected to rise 6.2% in 2023, as the world's second largest economy continues on its road to recovery.
New York Cocoa's rally continues. This is partly due to tight supplies from Ivory Coast, the world's largest producer of cocoa, where port arrivals have been running behind last year's pace. However, that rally might not last, as there is no production issue here. Ivory Coast expects a good mid-crop, and its neighbour and the world's second-largest producer Ghana is poised to produce a larger crop this season.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Seize your opportunity
Deal on the world’s stock indices today.
- Trade on rising or falling markets
- Get one-point spreads on the FTSE 100
- Unrivalled 24-hour pricing
See opportunity on an index?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See opportunity on an index?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from one point on the FTSE 100
- Trade more 24-hour indices than any other provider
- Analyse and deal seamlessly on smart, fast charts
See opportunity on an index?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.