London pre-open: Stocks to edge up ahead of US PCE

31st May 2024 07:38

(Sharecast News) - London stocks were set to edge up at the open on Friday as investors eyed the release of the latest US CPE figures.

The FTSE 100 was called to open around 10 points higher.

Axel Rudolph, senior market analyst at IG, said: "Friday's US PCE inflation print should help the Fed in its monetary policy decision making, especially after Thursday's Q1 GDP growth downward revision as corporate profits unexpectedly fall in Q1 while initial jobless claims rise slightly more than expected."

On home shores, data released earlier by Nationwide showed that house prices returned to growth in May after two months of declines.

House prices were up 0.4% on the month following a drop of 0.4% in April and 0.2% in March. Economists had expected house prices to tick up 0.1% on the month.

On the year, prices rose 1.3% in May following a 0.6% jump in April and a 1.6% increase in March.

Nationwide chief economist Robert Gardner said: "The market appears to be showing signs of resilience in the face of ongoing affordability pressures following the rise in longer term interest rates in recent months."

Elsewhere, industry research showed that UK retail footfall eased in May despite the bank holiday weekends and improving weather.

According to the latest BRC-Sensormatic IQ footfall monitor, total footfall slipped 3.6% in May, although that was an improvement on April's 7.2% slump.

All types of shopping destinations saw fewer visitors during the month. Footfall decreased by 2.7% on high streets, by 2.3% in retail parks and by 4.5% in shopping centres.

Helen Dickinson, chief executive of the British Retail Consortium, said: "Bank holidays and improving weather failed to entice customers to make in person trips to shopping destinations.

"Retailers will be hopeful that a warm summer, coupled with events such as European Championships and Olympics, will boost footfall.

"Political parties have a role to play too, by having policies that mean retailers can invest in rejuvenating shopping destinations. A broken business rates system and outdate planning laws are holding back the industry."

Andy Sumpter, EMEA retail consultant for Sensormatic Solutions, said: "Retailers were dealt some good news, as footfall recovered against the month before. While no one's denying this improvement is starting from a low base, many will be hoping this represents a turning point.

"With inflationary pressures easing and household budgets starting to feel a little less squeezed, along with the general optimism that may come with the general election, many may be hoping the mood music has shifted into something more positive."

In corporate news, JD Sports Fashion reported lower-than-expected annual profits as it continued to invest in its store estate.

Profits before tax and adjusting items of £917.2m were down 7.5%, against forecasts of £920m. Organic sales were up 9%.

First quarter performance was in line with expectations and the company held full-year profit before tax and adjusting items guidance of £955m-£1.035bn.

The government has sold a £1.24bn stake in NatWest, as HM Treasury continues to reduce its shareholding in the state-backed lender. The bank announced that the share sale was effected by way of an off-market purchase by NatWest of more than 392m shares at 316.2p, Thursday's closing price.

The deal cut UK Government Investments Limited's stake in the bank from 25.98% to 22.5%.