Market Report: steady open as investors gear up for a busy earnings week
Matt Britzman, senior equity analyst, Hargreaves Lansdown: “The FTSE 100 is flirting with the key 9000 level in early trading, with no major catalysts to send the index one way or another. In trading news, the London Stock Exchange is looking at ways to revolutionise UK markets with a bold exploration of 24-hour trading, promising enhanced global access and nimble responses to worldwide events. Yet, the prospect of thinner after-hours liquidity and potential disruptions to critical price auctions raises caution. This move, still in its infancy, primarily caters to retail investors navigating markets via smartphones rather than liquidity-sensitive institutional giants. That’s positive for retail involvement but is unlikely to move the dial on the attractiveness of UK vs US markets for companies looking to choose a listing destination.
UK housing markets faced a sobering July as Rightmove’s asking price index dipped 1.2% month-on-month, with London’s sharp 1.5% decline signalling a market grappling with decade-high supply and fading pricing power. Despite robust activity, fierce seller competition prompted Rightmove to trim its 2025 price growth forecast to 2%, aligning with a more cautious outlook for a resilient yet price-constrained market. These numbers echo what Barratt Redrow said last week, though Berkeley Group is the most exposed to London markets, with a significant focus on high-value properties in the capital and the South East.
A whirlwind of corporate earnings is set to captivate US markets this week, with tech giants like Alphabet, Tesla, and Intel, joined by defence and telecom heavyweights, ready to unveil their financial prowess. Earnings season has gotten off to a strong start, with over 80% of early reports surpassing profit expectations. Investors are banking on this robust trend to fuel the next leg of this market rally. The current momentum train has largely been backed by expanding multiples, which tend to be hard to sustain. A strong earnings season would offer a welcome backbone for this unloved bull run.
On the economic horizon, durable goods orders are expected to steady after last month’s spike. S&P Global PMIs are forecast to signal robust private sector growth, and home sales are expected to edge higher on cautious optimism.
Brent crude oil futures edged toward $69.4 per barrel in early trading, rebounding from their first weekly dip this month, as the European Union’s bold new sanctions on Russia sparked fears of tightening oil supplies. Yet, with Trump’s looming tariffs threatening to stifle global growth and curb energy demand, investors remain cautious, eyeing 1 August as a pivotal deadline for reciprocal trade measures.”