Equities in London are in demand in early trading with the FTSE100 up 0.8 per cent, leading a sea of green across all the main indices. Overnight, the gold price fulfilled the destiny that has been expected of it for the past couple of weeks by breaking through the $2,000 a troy ounce level, hitting a record intra-day high of $2,018 an ounce.
Investors appear to be reaching for the insurance which is baked in to gold as a protector against inflation and also economic uncertainty. Investors in the US are beginning to show some nervousness around the ability of the country's polarised political system to come together on a covid-19 recovery package and both bond yields and the value of the dollar in currency markets have suffered heavily for it. Listen in to our lastest Investment Hour podcast which is focused on gold.
Such uncertainty has only been exacerbated by the continued worries around a potential second wave of coronavirus in Europe and the ongoing depth and breadth of the first wave in the US. Despite this, US equities continue to march higher, led by the tech giants which helped the Nasdaq to set a new record high overnight. For our latest analysis on the US tech giants, see this week's cover feature. Across the board, US indices are expected to open up later today in positive territory. Notable earnings figures from across the pond overnight came from media giant Disney which posted a loss of $7.4bn after a slide in revenues in its third quarter. Meanwhile Disney has said it is going to launch its next big feature film, Mulan, straight to its Disney+ streaming channel, lending a blow to cinema operators hoping for a boost to their restart plans.
UK Company Announcements
| WH Smith (SMWH) | WH Smith has begun a review of its stores across both its high street and travel segments, which could lead to up to 1,500 job cuts. Trading is recovering in both parts of the business as stores open up, with July travel turnover down 73 per cent on last year and high street revenue down by a quarter. WH Smith expects to record a full-year pre-tax loss of between £70-75m. |
| PageGroup (PAGE) | The recruiter swung to a pre-tax loss in the first half, as the pandemic continues to bite the UK job market. Management has suspended its dividend policy, although noted that it intends to reinstate returns once trading conditions improve. |
| Metro Bank (MTRO) | The high street bank suffered an underlying loss of £183.4m during the first half of the year, 60 per cent of which was directly attributed to the effects of covid-19. Losses on loans have not surged yet due to government protections but this is expected to change and means management is not yet commenting on the longer term effect of the crisis on its 2024 financial targets |
| Segro (SGRO) | Like-for-like rental income was up 2 per cent during the first half, with the logisitics landlord agreeing rents upon review and at renewal at an average 10 per cent ahead of the previous passing rents. The interim dividend was raised 9.5 per cent to 6.9p a share. |
| UDG Healthcare (UDG) | Full-year guidance has been reinstated, with expectations that adjusted diluted EPS will land at 43-45¢. Bosses have also declared an interim dividend, having suspended the pay-out in April. |
| RHI Magnesita (RHIM) | The world's largest manufacturer of refractories saw its interim pre-tax profits more than halve to €70m, as turnover fell by more than a fifth in both its steel and industrial divisions. |
| Morgan Sindall (MGNS) | Management reinstated guidance for 2020 pre-tax profits of £50m-£60m, down on £88.6m last year, and cash of "well over £100m". The construction and infrastructure specialist reported a 52 per cent fall in adjusted operating profit over the first half due to lockdown restrictions and increased costs associated with implementing safe working practices. |
