Market report: A drab day in stock markets lies ahead, with a focus on currencies
- UK and European markets heading for a fall of around 0.2%
- Euro has fallen to parity with the dollar, a level not seen for around 20 years
- Experian reports a robust quarterly result and expects growth to continue
- Barratt Developments say they expect to report profits of just over a billion pounds for the year
- Playtech shares have tumbled 12% – and they have lost their potential bid from TTB
Steve Clayton, Fund Manager at HL Select:
“Futures markets are suggesting a drab day in stock markets lies ahead, with UK and European markets heading for a fall of around 0.2%. The markets’ focus is likely to be on currencies today, with the euro having fallen to parity with the dollar, a level not seen for around 20 years. Just over a year ago, a euro would have bought you a little over 1.2 dollars. Traders have been underwhelmed by the European response to rising inflation, comparing it to the more muscular approach to raising interest rates adopted by the US Federal Reserve. Sterling is out of the spotlight currently, but it too has been slipping against the dollar, with a pound now buying less than 1.2 dollars.
In the UK this morning, Experian, one of the world’s leading providers of credit bureaux data and business information reported a robust quarterly result. Revenues rose by 9% at constant currency rates, with Latin America racing ahead by 23%. The group say they expect a similar pace of growth over the rest of the year with a modest increase in their margins.
Interest rates may be on the up, but according to Barratt Developments, one of the UK’s largest homebuilders, demand remains robust and the group has a strong forward order book. In their trading update for the financial year just ended, Barratt reported increased sales per site, with 17,908 homes sold, back up to pre—pandemic levels. Barratt say they expect to report profits of just over a billion pounds for the year, an increase of around 12% on the year before. Barratt pushed the average price of their homes sold up by 8%, ahead of cost growth in the business of 6%. Barratt’s numbers though, exclude a bill of over £400m to cover their costs related to rectifying building safety defects following the Grenfell Tower tragedy.
Playtech shares have tumbled 12% this morning on the news that TTB, who had been mulling a bid for the gambling software provider, have decided to walk away. This is the latest chapter in a convoluted struggle for control of the group, which so far has attracted interest from multiple parties, but all have either been unable to persuade shareholders to back them, or have lost interest in the group along the way.
Over in Cryptoland, token prices are generally firmer this morning, despite the news that Celsius, a major provider of crypto banking services has filed for bankruptcy in the States, potentially putting hundreds of thousands of crypto investors deposits at risk. This follows on from the earlier failure of Three Arrows Capital, once a multi-billion hedge fund, now worthless following the implosion of the Terra/Luna crypto system. Support this morning has come from the unlikely source of JP Morgan, who have suggested that bitcoin mining may have returned to profitability following reductions in costs.”
