London pre-open: Stocks seen higher; quiet session expected

2nd Sep 2024 07:28

(Sharecast News) - London stocks were set to rise at the open on Monday in what is expected to be a fairly quiet session, with US markets closed for the Labor Day holiday.

The FTSE 100 was called to open around 20 points higher.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "Attention shifts to the all-important US jobs data this week - the last one before the Fed is due to start cutting its rates in September. The job openings data is due Wednesday, ADP on Thursday and NFP, wages and unemployment figures on Friday.

"According to the market pricing, a total of 100bp cut is still on the table and the expectations for the upcoming figures are soft. Analysts expect fewer job openings, around 136K print from the ADP report, and around 164K for the NFP. The monthly wages growth may have increased a bit however, and the unemployment rate may have decreased from 4.3% to 4.2%.

"Sufficiently soft data is good for the Fed cut expectations and risk appetite, but a too soft data and jumbo cut expectations are not supportive of risk appetite. There is a very fine line between optimism due to the expectation of rate cuts and chaos due to expectation of rapid rate cuts on thinking that the Fed may have missed its call at the end of the tightening cycle, as it had missed the turn at the start of it.

"Regarding this week's data, could possibly see stronger-than-expected figures for August, which could further tame the jumbo cut expectations for the Fed and favour the scenario where the Fed would cut its rates by 25bp for the three remaining meetings this year. A sufficiently strong data could even boost the expectation that the Fed will cut only 2 times this year, by a total of 50bp. I believe that there is a greater chance for a hawkish revision in Fed expectations than a dovish one."

In corporate news, Australian real estate advertising company REA Group confirmed speculation that it is considering a possible cash and share offer for UK property platform Rightmove.

REA, majority owned by Rupert Murdoch's News Corp, said in a statement that it sees "clear similarities" between the two groups, but has not yet approached, nor had any discussions with, Rightmove regarding any potential offer.

IT provider Kainos said it expected full-year revenues to be below market forecasts due to the tougher trading environment in services as clients delayed decisions on projects, but adjusted pre-tax profit would be in line with consensus estimates.

The consensus revenue and profit figures are £415.5m and £79.1m respectively. Full-year 2024 reported revenue was £382.4m.

Big Yellow Group said it has secured planning consent for a total of 307,000 square feet across two London sites.

At Kensington Olympia, permission was granted for a 176,000 square foot development adjacent to a major events centre, with the new store expected to open in 2027. Additionally, a 131,000 square foot replacement store at Staples Corner has been approved, with completion anticipated in 2026, leading to the closure of the existing leasehold store.