FTSE 100 opens higher amid plethora of earnings
Barclays posted a group income of £6.3 billion and intends to initiate a share buyback of £750 million. ITV reported a 52% drop in first half adjusted earnings to £152 million below market forecasts.
The Federal Reserve
As expected, the Federal Reserve raised its interest rate target by a quarter of a percentage point to a range of 5.25%–5.5%. Regarding upcoming decisions, the Federal Reserve (Fed) Chair made no promises either way. The Fed is now particularly looking for signs that the economy is heading for a period of "below-trend" growth that Powell thinks is necessary for inflation to fall.
On Thursday, it is the turn of the European Central Banks (ECB) to decide on its rates. A 25-basis point hike is on the cards, which would take the main refinancing rate to 4.25%.
Over in the US, the market awaits the preliminary reading of gross domestic product (GDP) in the second quarter. Economists believe the economy expanded by 1.8% in the second quarter. Also expected this afternoon: Initial jobless claims, durable goods orders, and pending home sales.
Elsewhere on the equity market,Shell reported profits of $5 billion in the second quarter, dropping by 56% from a year earlier as oil and gas prices cooled after rallying on the back of Russia's invasion of Ukraine.
Barclays posted a group income of £6.3 billion and intends to initiate a share buyback of £750 million. ITV reported a 52% drop in first half adjusted earnings to £152 million below market forecasts, which it said reflected a tough advertising market. There were also releases from BT Group, Centrica, Rentokil Initial, and Anglo American, which also reported half-year earnings.
In Europe, Volkswagen posted revenue up 15.2% to €80 billion and now expects full-year deliveries in a range between 9 million and 9.5 million vehicles instead of the around 9.5 million units previously forecast due to the uncertain economic situation.
Nestle Nestle reported better-than-expected first-half organic sales as the world's biggest packaged food company again raised prices to cope with higher input costs. Net profit rose by 6.6%, and revenue reached CHF 46.3 billion, better than the CHF 45.6 billion expected.
French oil company TotalEnergies posted a drop in second-quarter net income, reflecting lower natural gas prices and slimmer refining margins in Europe. Adjusted net income fell to $5 billion, to be compared with $9.8 billion during the same period last year.
Over in the US, Meta shares jumped more than 8% in extended trading after reporting better-than-expected earnings and revenue. The Facebook, Instagram, WhatsApp, and now Threads parent companies benefited from a strong rise in advertising revenue. Revenue rose 11% to $32 billion, nearly one billion more than what analysts had anticipated. Ad revenue rose 12% in Q2. On Tuesday, Google said its ad revenue increased by 3% during the same period.
Today, the market expects earnings from McDonald's. The street sees earnings of $2.78 per share, which would be a rise of about 9% compared to the same quarter a year ago. Revenue is forecast to increase by the same amount to $6.30 billion. In this context of still high inflation, investors will look out for operating margin levels.
Intel is expected to post a loss of 4 cents per share, compared with an earnings per share (EPS) of 29 cents in the same quarter last year. Revenue should come in at $12.12 billion, down 20% year-over-year (YOY). Intel shares have risen about 30% so far this year, but looking at a much longer-term chart, the stock has a long way to go to recover from a drop that started more than two years ago.
The multi-year road map announced earlier this year gave more clarity to investors, but they are also aware that competition has intensified with the rush to artificial intelligence (Al)-related processors.
Also, after the US closing bell, Ford Motor, the car maker is expected to publish earnings of 54 cents per share, a 20% drop from the same quarter a year ago. Revenues forecast at $43 billion. The group's electric vehicles (EV) division will be under scrutiny.
Last week, Ford said it planned to triple the production rate of its F-150. Lightning EV and slashed its price to about $40,000. This strategy worked for Tesla, but investors are more doubtful: Ford stock dropped 6% in the news.
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