London pre-open: Stocks seen up after Tuesday's losses

10th Jul 2024 07:28

(Sharecast News) - London stocks were set to rise at the open on Wednesday following losses in the previous session, as investors eyed the second and final day of Federal Reserve chair Jerome Powell's testimony to Congress.

The FTSE 100 was called to open around 16 points higher.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "Federal Reserve (Fed) Chair Jerome Powell's testimony yesterday wasn't overly optimistic but it revived the expectation that a rate cut could come sooner rather than later.

"In the first day of his semi-annual testimony before Senators, Powell said - for the first time in three years - that inflation is no longer the only threat to the US economy but the cooling jobs market also is. Although he didn't want to offer a clear timeline when asked when the Fed would lower interest rates, Powell said that the latest jobs report sent a 'pretty clear signal' of a cooler labour market.

"The main takeaway is that, moving forward, the jobs data will generate as much euphoria as the inflation numbers and investors will be more eager to put an accidental uptick, or less ideal inflation numbers, in perspective and remain confident that things - in terms of rate cut expectations - are moving toward the right direction."

In corporate news, food outlet operator SSP Group held annual guidance after third-quarter sales rose 16%, driven by increasing demand for leisure travel. Like-for-like revenue was up 6%.

The company, which owns the Upper Crust and Ritazza coffee chains, said it still expects revenue of £3.4-£3.5bn, underlying EBITDA of £345-£375m and underlying operating profit in a range of £210-£235m.

Wetherspoons said it expects profits to hit market expectations as it closes out its financial year with strong sales momentum.

The pubs group reported like-for-like sales growth of 5.8% in the 10 weeks to 7 July, picking up slightly from the 5.3% LFL increase reported in the third quarter.

It said total sales are at record levels despite the group operating from fewer locations, having opened two sites but sold or surrendered to the landlord 26 pubs during the financial year.

Travis Perkins appointed Pete Redfern as its new chief executive officer, effective from 16 September, succeeding Nick Roberts.

The FTSE 250 company said Redfern would bring over 20 years of leadership experience in the construction sector, and had previously served on the board as a non-executive director.

Additionally, Geoff Drabble would join as a non-executive director and chair designate from 1 October, bringing extensive experience from various leadership roles in publicly listed companies in the building materials and equipment hire sectors.