- FTSE 100 opens lower.
- US Stocks close broadly down.
- NVIDIA falls further but denies subpoena by the US Department of Justice.
- Currys full year guidance unchanged after positive start.
- Vistry bucks housing slow down with double digit revenue and profit growth.
- Brent Crude dips below $73 per barrel.
Derren Nathan, head of equity research, Hargreaves Lansdown:
“The FTSE is in the red this morning following another challenging session on Wall Street. The US Labor report failed to quell fears about the direction of the world’s largest economy. Job openings fell more than expected to 7.67mn, although hires rose 0.2% month on month to 273,000. All eyes now turn to Friday’s pivotal non-farm payrolls count which is expected to show an increase of 161,000 and a small fall in the unemployment rate to 4.2%. Markets are still pricing in a 0.25% rate cut this month, but only just, with the odds of a 0.5% cut now shortening further.
The recent flagbearer for US markets NVIDIA took a further fall as rumours emerged that it had been subpoenaed by the Justice Department in an antitrust investigation. The chipmaker at the forefront of the AI boom has however since denied these claims. Rival Advanced Micro Devices saw its shares close up 3% on the day.
There were some other pockets of hope with defensive consumer stocks and utilities both seeing gains. Tesla shares also had a strong day closing up 4%.
Electronics retailer Curry’s has reported a ‘positive start to the year’ but the 5% like-for-like growth in the UK & Ireland was tempered by a 2% decline in The Nordics where the consumer environment remains weak. The group is confident that it can grow profit and free cash flow this year but not confident enough to raise guidance.
Brent Crude prices have now dipped below $73 per barrel as demand fears continue to weigh upon sentiment. Rumours that OPEC+ is considering postponing its planned hike in production was not enough to get prices moving back the other way.”
Aarin Chiekrie, equity analyst, Hargreaves Lansdown:
““Vistry looks to be bucking the trend of a housing market slowdown. Its transformation into a Partnerships giant, which specialises in providing affordable housing, has helped it outperform the more traditional housebuilders of late. This strategy of delivering high volumes of affordable housing is well aligned with the new government’s ambitions to address the country’s housing shortage. New home completions landed at just under 8,000 in the first half, giving Vistry the confidence to reiterate its full-year guidance of over 18,000 new homes.
A solid performance in the first half has seen underlying revenue and operating profits rise at double-digit rates, helped by increased sales volumes and lower building material costs. Given the size of the order book, standing at a mammoth £5.1bn, the group has great visibility over future revenue. This allows it to lock in most of its material prices well in advance, helping to avoid any nasty surprises on the cost side. Vistry’s huge scale also allows it to negotiate better prices on these materials, ultimately helping profitability.
As part of its ambitious three-year target to return £1bn of cash to shareholders, another £130mn of share buybacks have been announced, and are set to be completed by May 2025. In such an uncertain housing market, Vistry looks set to weather the challenges of 2024 better than many of its peers. But when mortgage affordability pressures ease and the housing market picks back up, other names in the sector are likely to catch more wind in their sails.”
