FTSE 100 holds firm, WPP shares slide 7%
The FTSE 100 index is broadly unchanged at 7527, with traders reluctant to take new positions until this afternoon’s US non-farm payrolls report.
The strongest performances came from the gaming sector after Flutter Entertainment rose 3% or 395p to 15,035p and Entain by 16p to 1397p.
Advertising and marketing group WPP fell 7% or 60.4p to 786.8p after it downgraded revenues guidance for this year due to delays in spending by tech sector clients.
The FTSE 250 index rose 0.2% or 44.76 points to 18,878.41, with energy services group Wood up 3% or 5p to 162.8p after analysts at Jefferies upgraded the stock to a “buy” recommendation with 210p target price.
Utility Warehouse business Telecom Plus also lifted 34p to 1650p as it forecast more double-digit annual percentage customer growth for the current year.
Market snapshot
Take a look at the key market data.
Amazon shares surge after Q2 sales beat
Amazon shares jumped 9% in Wall Street extended hours trading after the technology giant reported second quarter net sales well ahead of expectations at $134.4 billion (£105.3 billion).
The improvement from $121.2 billion the year before included a 12% rise at cloud-based Amazon Web Services (AWS) to $22.1 billion (£17.4 billion) amid the surge in interest for products and services relating to generative AI.
The AWS segment’s slightly lower operating income of $5.4 billion (£4.2 billion) accounted for the bulk of the overall $7.7 billion (£6 billion) figure, which was more than double the second quarter result of 2022 after a big turnaround in the core retail operation.
The International division narrowed its loss to $900 million (£707 million) and North America returned to profit with a surplus of $3.2 billion (£2.5 billion).
Hargreaves Lansdown analyst Sophie Lund-Yates said the continued AI excitement had shown up in the numbers, but the impact of higher borrowing costs on consumer spending means not let-up in the pressures facing Amazon.
She added: “With US core inflation still at stubbornly high levels, finding ways to keep the support beams under retail profits from buckling could be a tough ask.”
Recruiter Parity cuts jobs as tech slowdown hits revenue
Tech recruiter Parity will cut jobs as a slowdown in hiring in the sector means that its revenue will be lower than previously expected.
The tech sector has been hit with a wave of high-profile layoffs and hiring freezes over the past year, which has hit Capita’s business.
It said: “In line with many others within the recruitment sector, Parity has seen market conditions become more challenging over recent months with economic uncertainty resulting in clients and new business opportunities deferring hiring decisions.”
At the same time, the business said it has “a significant opportunity” for growth in the public sector, and so will focus more on that area.
“ As a consequence, the new business initiatives targeting the private sector, which included permanent recruitment services, have been scaled back and with a resultant reduction in headcount,” it said.
Big loss for Home REIT after flash property sale
Beleaguered property investment trust Home REIT suffered another blow today after it made a big loss on the flash sale of 40 of its properties.
The firm said it had sold the units at auction for a combined £4.8 million, representing just 39% of their average purchase price.
Home REIT said the discount reflected “ the vacant status of the majority of the sale properties and their condition.” It added the buildings had been “identified as having limited prospects for income and capital return.”
(Dominic Lipinski/PA)
/ PA WireUS jobs report in focus after Amazon beats hopes
A monthly jobs report is today expected to show the resilience of the US economy, with Wall Street forecasting no change in the 3.6% unemployment rate.
July’s non-farm payrolls figures should also reveal the addition of around 200,000 jobs, only slightly below the level reported for June,
A stronger-than-expected report will fuel expectations that the Federal Reserve may have to consider a further interest rate hike in September, adding to upward pressure on US yields after the sharp sell-off for bonds this week.
US stock markets steadied yesterday after heavy losses earlier in the week, with last night’s strong updates by Amazon and Apple likely to support sentiment today.
Amazon shares were 9% higher in after-hours trading, having beaten Wall Street expectations with second quarter net sales of $134.4 billion (£105.3 billion).
CMC Markets expects the FTSE 100 index to open six points higher at 7535. London’s top flight opened the week at 7694.
Morning refresh: what you need to know to start the day
Good morning from the City desk of the Evening Standard.
Sterling took a hit yesterday after the Bank of England went back to a smaller, quarter-point rate hike, after talk into the meeting that it could go for a second successive half-point rise.
The pound fell by 0.6 cent to $1.2651, a drop of 0.5%, to its lowest level since late June. Rate rises at the BOE have supported the pound in 2023, leaving it up by around 4.5% in a year.
After news of the 6-to-3 vote on the 9-member Monetary Policy Committee, sterling looked somewhat exposed, even as the BOE signalled that it could leave rates higher for longer.
Overnight, Amazon shares surged by as much as 10% in after-market trading on Wall Street, after the e-commerce giant posted bumper profits way ahead of analysts expectations, in signs its wave of spending cuts and layoffs was beginning to improve its bottom line.
Here’s a summary of our other headlines from yesterday:
This morning we’re expecting results from contractor Capita and advertising business WPP.
