- Development in services sector slowed in August, based on latest PMI survey a less strong-than-expected performance
- Disappointing services figures send “warning signals” about the healthiness of the United kingdom economy, says IHS Markit
- Services PMI figures across Europe below economists’ forecasts pound retreats to flat territory against dollar
- FTSE 100 rebounds back to positive territory as North Korea-inspired risk aversion wanes on stock markets
- Housebuilder Barratt Developments leads those in early stages in front of its results tomorrow after rival Redrow reported record figures and upgraded its guidance
Games Workshop states profits and revenues ‘well above’ previous year as recovery continues
The recovery of Games Workshop shows no indications of slowing because the miniature figurine manufacturer says earnings are “well above” the year before.
Inside a brief update to the stock exchange, the Nottingham-based company stated both revenues and profits for that year were significantly in front of the same period in the last financial year.
The update, including the announcement of the dividend of 35p per share, sent Games Workshop’s share cost up by greater than 10pc at the begining of buying and selling.
It marks the most recent part of their comeback from the challenging year in 2015, if this was hit by disappointing Christmas sales along with a slowdown in the shops.
Read Mike Dean’s full report here
Merkel’s climate pledge lifts German carmakers FTSE 100 missing ‘catalyst’
The FTSE 100 is missing a “catalyst” to kick-start its day’s buying and selling, based on Accendo Markets mind of research Mike Van Dulken.
Britain’s blue-nick index has been weakened with a rallying pound as the DAX in Germany has leaped .5pc greater since it’s big vehicle producers rise on chancellor Angela Merkel’s pro-automobile industry rhetoric.
She’s stated that they would double the amount plan for climate aid to be able to reduce the specter of limitations on diesel cars.
Mr Van Dulken stated on today’s movements in Europe:
“European equities are positive to differing levels. The United kingdom FTSE requires a catalyst to flee this week’s range, Germany’s DAX is flirting having a bullish breakout on Autos-friendly rhetoric from Merkel and Dow jones Johnson futures are testing their highs each week before investors return in the Labor day lengthy weekend.
“Sentiment is positive despite ongoing geopolitical issues, investors further demonstrating their thick skin. Assisting is a mix of M&A from each side from the Atlantic, stable macro data within the Eurozone and ongoing gains for metals and oil.”
Retail sales pick-as much as 1.3pc weak comparable flatters figures
There’s some slightly less bleak data on the United kingdom economy in the British Retail Consortium for traders to digest today but it arrives with a large dollop of caveat.
The BRC’s latest data demonstrated that retail sales development in August rebounded to at least one.3pc when compared to previous year but it’s being over a very weak August for sales growth this past year.
The BRC stated that non-food sales coming back to growth “as shoppers’ attentions switched to homewares, fall clothing ranges and also the new school term” underpinned the figures.
Helen Dickinson, the BRC’s leader, stated the figures paint a far more positive picture on the healthiness of consumer spending compared to reality.
“Non-food sales only have just retrieved to levels seen 2 yrs ago, following a dismal August in 2016 while strong figures for food are largely caused by rising prices, departing development in volume terms less strong than this past year.
“Stark challenges lurk nearby for that retail industry. Purchasing decisions are extremely much determined with a shrinking pool of discretionary consumer spend, considering the variety of profit people’s pockets set to become dented by inflation and statutory increases in worker pension contributions inside a couple of months’ time. It’s therefore essential to safeguard consumers whenever we can from further cost pressures. “
Stock markets update: Software maker Aveva soars 30pc after finally saying yes merger with Schneider Electric
With everything services sector growth excitement, we have neglected the large movers around the stock markets in London today.
Software maker Aveva shares have soared almost 30pc after finally reaching a contract to merge with French multinational Schneider Electric in the third duration of asking while housebuilder Redrow has sprang 4.6pc on its record results using the other housebuilders having a boost from the read across.
Oil shares are some of the top gainers around the FTSE 100 after the cost of crude firmed up following last week’s Hurricane Harvey-related losses however their heavy weighting is insufficient to prevent the general index sliding towards flat territory.
In the other finish, consumer goods giant Reckitt Benckiser has retreated 2.4pc on the broker downgrade from Exane BNP Paribas while gold producers Fresnillo and Randgold Sources have retreated as rapidly fading investor angst over North Korea pulls lower safe place gold.
Services growth slowdown reaction: Figures suggest economy is battling to choose-up
Today’s services sector growth implies that the economy is “battling to choose-in the pace within the third quarter”, commented Capital Economics’ United kingdom economist Paul Hollingsworth.
He stated that the combined PMI reading – including manufacturing, construction and services – is in line with development of around .4pc for that third quarter, a small acceleration from .3pc within the previous quarter.
Pantheon Macro United kingdom economist Samuel Tombs concurs the figures show “modest GDP development in the 3rd quarter”.
“Regardless of the slowdown, the biggest most of services firms since This summer 2015 reported that actually work backlogs elevated in August. In reaction, firms hired probably the most workers in 19 several weeks and offered slightly greater wages to retain key staff the input cost index selected as much as its greatest level since Feb.
“However with the loss of the brand new orders index to 54.2 in August from 54.7 in This summer signalling ongoing weakness sought after, we doubt that more powerful rates of development in either employment or wages is going to be sustained.”
Services growth slowdown reaction: Cost pressures may alert Bank of England’s MPC
Dean Turner, economist at UBS Wealth Management, stated on today’s disappointing services growth figures that the price pressures highlighted within the report could draw the interest of the Bank of England’s Financial Policy Committee.
Mr Turner added this on today’s data:
“Probably the most interesting part of the report was the mention of the cost pressure and also the outlook for hiring which faster for that third consecutive month. As unemployment has already been low, this increases the concerns that work shortages could begin to push wages greater within the several weeks ahead. With this thought, today’s figures might make the Financial Policy Committee crunches and be aware.
“That stated, it remains our view the Bank could keep rates of interest on hold through 2018. The information isn’t as strong as some would hope, with inflation prone to peak round the turn of the season, along with the uncertainties presented by Brexit, it’s unlikely there’ll considerably of the appetite for almost all the MPC to boost rates in the near futureInch
Services sector growth slows in August data transmits ‘warning signals’ about health of United kingdom economy
This morning’s services PMI data slowdown shows development in the sphere at its weakest since September 2016, the drop-off being far sharper than economists had forecast.
IHS Markit stated that more powerful cost pressures over the sector had pulled lower the studying with input cost inflation at its fastest since Feb. It had been the sector’s 13th consecutive month of growth however the report stated that subdued client demand and increased uncertainty concerning the economic outlook had considered on growth.
Chris Williamson, chief business economist at IHS Markit, stated that today’s services sector figures might be warning signals for that United kingdom economy.
“Robust manufacturing growth means the economy might be rebalancing towards goods production, along with the less strong pound, however the slowdowns in services and construction send warning signals about the healthiness of the economy. “In services, the less strong growth trend was most apparent in consumer–facing sectors for example hotels & restaurants along with other personal services, including companies for example cinemas, gyms and hairdressers.
“The general degree of optimism also continued to be subdued, mainly associated with Brexit uncertainty, near to levels which have formerly been suggestive of the economy stalling or perhaps contracting.”
Development in the United kingdom services sector slows
Growth within the United kingdom services sector slowed in August, based on IHS Markit’s latest PMI survey.
Services PMI fell to to 53.2 from July’s uptick, a less strong-than-expected performance in the sector. The pound retreated to flat territory from the dollar in front of the figures but has steadied because the disappointing data dropped, buying and selling at $1.2922.
Redrow posts record results and hikes dividend by 70pc
FTSE 250 housebuilder Redrow makes light from the slowdown within the housing industry by posting record results and hiking its dividend by 70pc.
Redrow stated its pre-tax profits for that year towards the finish of June had elevated by 26pc to £315m as revenues leaped 20pc to some record £1.66bn.
Revenues were boosted with a 7pc rise in Redrow’s average selling cost, to £309,800. Legal completions, meanwhile, increased 15pc to five,416.
The strong group of results permitted the organization to boost its full-year dividend by 70pc to 17p and upgrade its profit guidance within the medium term. The update sent Redrow shares up greater than 5pc at the begining of buying and selling.
Read Mike Dean’s full report here
Eurozone services PMI data shows less strong-than-expected United kingdom studying
The eurozone’s services PMI figures have dropped just a little sooner than our very own and if they’re anything to put into practice then you should be expecting a sharper drop-off than initially thought within our own sector’s performance.
The country, France, Italia and also the overall eurozone all underperformed economists’ expectations today with simply Germany defying the popularity. Some analysts have stated that some of individuals falls come from multi-year highs but nevertheless economists thought the sphere would hold on much better than it’s.
Following a disappointing figures around the continent, the pound has nudged facing the euro, buying and selling .1pc greater at €1.0879.
There have been no indications of a slowdown in China, however, using their services sector growth obtaining to 52.7 overnight.
Services PMI preview: Development in UK’s most significant sector likely to soften
The contrasting growth figures within the manufacturing and construction sectors’ latest PMI surveys have cranked in the pressure on the services sector’s own reading due today.
Development in the sphere, britain’s most significant, is anticipated to weaken slightly to 53.5 from July’s solid 53.8 studying (any figure above 50 signifies growth).
The carefully viewed survey due at 9.30am will give you investors a couple of more clues to the healthiness of the United kingdom economy using the construction PMI sliding to some one-year low yesterday and Friday’s manufacturing PMI figure showing the sphere ongoing to rebound.
CMC Markets’ analyst Michael Hewson believes it would not be an unexpected to determine the help sector outshine expectations.
He added on recent United kingdom PMI figures:
“The weak construction number contrasted with last days ongoing improvement in manufacturing and therefore makes today’s services PMI number that rather more important, given a few of the recent gentleness observed in research studies here.
“In This summer we had a pleasant uptick to 53.8, after a slowdown in June, which is expected that people might see some softening in August to 53.5, although it wouldn’t be considered a surprise when we did outshine, specifically in areas that support travel, leisure and tourism.”
Agenda: Services sector data dominates investor focus
Welcome to the live markets coverage.
Services PMI data dominates the markets’ focus today using the studying holding added importance because of the contrasting fortunes from the manufacturing and construction sectors in their very own recent PMI readings.
In front of the figures the pound has nudged up against the dollar, buying and selling .1pc greater at $1.2935.
North Korea’s latest nuclear tests knocked risk appetite all over again yesterday however the growing regularity from the rogue state’s provocations resulted in the pull-back on stocks markets has become more mild with every escalation.
While shares retreated in to the red once more and also the usual safe place suspects, gold, Japanese yen and Swiss franc, pressed greater, finance industry is numbing to Kim Jong-un’s sabre-rattling using the FTSE 100 only slipping 0.36pc yesterday.
Although mild caution still persists today, stock markets across Europe have clawed back lost ground using the FTSE 100 propelled into positive territory through the housebuilding sector.
Barratt Developments leads those around the blue-nick index in front of its full-year results tomorrow after rival Redrow reported record results and upgraded its guidance.
Interim results: Dalata Hotel Group, IQE, Cairn Homes, Vipera, Alpha Forex Group
Full-year results: Alumasc Group, A & J Mucklow Group, Mattioli Forest, Redrow
AGM: 888 Holdings
Buying and selling statement: Mattioli Forest
Financial aspects: BRC Retail Sales Monitor y/y (United kingdom), Services PMI (United kingdom), Final Services PMI (US), Factory Orders m/m (US), ISM Non-Manufacturing PMI (US), IBD/TIPP Economic Optimism (US), Final Services PMI (EU), Retail Sales m/m (EU), Revised GDP q/q (EU)