The FTSE 100 index and FTSE 250 had a very busy week, as corporate earnings continued to be reported and the Bank of England delivered their first rate reduction in more than 4 years.
On Thursday, the Footsie index fell to PS 8,283, from its high of PS 8,400 this week. Meanwhile, the mid-sized FTSE 250 was trading at PS 21,460.
BoE interest rate decision
The BoE’s decision to cut interest rates was one of the biggest FTSE stories this week. The bank announced a 25-basis point cut in interest rates on Thursday and hinted at more to come.
This was done in response to recent economic and inflation trends. The Consumer Price Index of the country has been at 2.0% for the last few months, according to recent data.
The British economy, however, has shown a relative resilience. Recent GDP figures showed the British economy had grown by 0.4%, which was twice as much growth analysts expected. The PMIs for retail sales, manufacturing and services have all been very strong.
In reality, the economy has some serious problems. Rachel Reeves has just this week stated that her administration is facing a $22 billion deficit and she may be forced to increase taxes.
Analysts believe the BoE is likely to cut interest rates once or twice in this year, particularly if inflation keeps falling. In a recent note, ING’s analysts stated:
The committee has not yet admitted that the Bank of England is likely to cut interest rates sooner than they are currently willing. The committee is more confident that the inflation data and wage growth figures will continue to improve throughout the year, leading them to consider at least another rate cut in 2018.
BoE’s decision comes a day after Federal Reserve kept interest rates the same and indicated that September would see a rate reduction.
Top FTSE 100 Earnings
This week, the FTSE 100 index reacted positively to a number of important earnings from both the US and UK. Companies like Amazon, Meta Platforms Apple and Microsoft released their earnings in the US. Apple posted better numbers than anticipated, while Amazon’s quarter was less successful. Piper Sandler analysts downgraded Amazon.
Rolls-Royce UK published its strong financial results, and re-stated the dividends it paid to investors. International Consolidated Airline Group also published positive results, and restarted dividend payments.
St. James Place released positive numbers which showed the recovery of the UK’s largest wealth manager. Barclays , Next PLC , and Shell also released positive numbers. This explains the relatively stable FTSE 100 Index.
Earnings of Glencore IHG and Glencore
Next week, the FTSE 100 and FTSE 250 indices are also in the spotlight as they will be publishing the numbers of several large companies that make up the index.
Glencore is a giant mining corporation that will likely be the most watched FTSE 100 stocks next week. The company will announce its financial results Wednesday. The company will release its financial results on Wednesday.
These numbers are also coming at a moment when investors resist Glencore’s plans to separate its coal division into an independent business. Only this week the UK accused Alex Beard of corruption. He was the former director of the oil trading division.
Although it is not clear whether Glencore’s stock will be involved in the lawsuit, its performance suggests that. Glencore’s share price fell to 415p, the lowest since March 26, on Thursday.
Intercontinental Hotels Group, another FTSE 100 firm to be on the lookout for when it releases its results is Intercontinental Hotels Group. The stock is at its lowest level since February 24, when it crashed down to 7,620p. The stock has formed a double top pattern, indicating more decline ahead.
IWG, Abrdn and WPP Earnings are ahead
International Workplace Group, the parent company for Regus, HQ BasePoint and OpenOffice, will also release its numbers next week. IWG will release numbers next week, as it is a competitor to WeWork. Its stock price remains 20 percent below the highest level of this year.
IWG is a modest beneficiary of WeWork’s failure, as the company has now become the largest in its industry worldwide.
Abrdn will also be closely watched when it announces its results. Investors are predicting a recovery as its stock price has increased by nearly 30% since the lowest point of this year.
WPP will release their numbers too, as the stock price is still in correction. Recently, the company’s performance has been affected by many companies cutting their marketing budgets in order to cut costs.
This article FTSE 100 and FTSE250 shares to watch for: IHG, Glencore IWG, Abrdn WPP first appeared on The ICD
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