Investors in US tech shares continue to make hay while the sun is shining with the Nasdaq setting new record highs almost daily. By contrast, tech shares across Asia took a beating overnight as President Trump ramped up his campaign against Chinese technology companies, telling US firms to end any association with TikTok owner ByteDance and also WeChat, the messaging platform owned by Tencent within 45 days. Chinese technology shares sold off heavily with Tencent down 10 per cent and Alibaba off 6 per cent, dragging wider Asian indices down with them.
London's main equity indices are in something of a holding pattern this morning ahead of the US payroll report later on today which should give a further indication of how well the US economy is recovering from the initial coronavirus shock. Other employment market indicators, such as jobless claims, are pointing to a steady recovery.
UK Company Announcements
| Rightmove (RMV) | Revenue declined more than a third during the first half of the year, reflecting the 75 per cent discount given to members during the pandemic's housing market freeze. However, the 65 days since 13 May have seen a record amount of traffic to Rightmove's website, with demand for sales 50 per cent higher in June and July. |
| Hargreaves Lansdown (HL.) | Net new business flows were up 5 per cent during the year to June at £7.7bn, thanks to a second-half surge, as active client numbers rose 188,000. That boosted pre-tax profits by almost a quarter and prompted management to increase the interim dividend by almost a third to 54.9p a share. |
| Standard Life Aberdeen (SLA) | Net outflows surged to £24.8bn during the first half of the year, after Lloyds (LLOY) pulled assets relating to the Scottish Widows mandate. However, excluding that, the asset manager recorded £0.1bn in net new business as redemptions fell to the lowest level since the merger of Aberdeen and Standard Life. |
| Hikma Pharmaceuticals (HIK) | The injectables business saw a strong first half, buoyed by demand for products pertaining to Covid-19. Management has raised its full-year guidance for both injectables and generics, and opted to lift the interim dividend by 14 per cent. |
Meanwhile, those holding out hope for a strong rebound in the UK economy will have been buoyed by the latest house price data out today which indicates a sharp recovery in activity in July when lockdown restrictions eased, as illustrated by Rightmove's trading update today (see above). It has been some week for property junkies with news of relaxations to planning laws in a bid to turbo charge building rates around the country boosting sentiment too. But sceptics would point to July's bounce being the totally expected result of the lockdown being eased and many market watchers are extremely nervous about the prospect of a coming wave of unemployment, coupled with the risk of a second wave of coronavirus.
Talking of optimism, it appears as though the Bank of England's economists are more optimistic than most of their peers, the below chart illustrates where the bank thinks the UK economy will be through the end of next year, compared with an average of other economists. Gloomy stuff.
