Vistry on track for annual profits, Pearson set to top expectations

London open

The FTSE 100 was set to open 10 points lower on Wednesday, at 7,841.

Stocks to watch

Housebuilder Vistry said it was on track to deliver annual profits in line with expectations, despite a challenging market after last September’s disastrous government mini-budget that sent markets into freefall. In a trading update Vistry said it had started the new year with forward sales of £4.6bn, up from £2.7bn in 2021 when sites had been closed due to the Covid pandemic.

Pearson on Wednesday said it would report better-than-expected annual profit, driven by a strong sales rise across most of its divisions. The educational publisher said it now expected an adjusted operating profit of about £455m for 2022, up 11% and ahead of expectations, on an underlying sales increase of 5%.

Newspaper round-up

Germany will avoid a recession this year, Chancellor Olaf Scholz has insisted, despite the energy crisis which has ravaged its economy. Mr Scholz said that new liquefied natural gas (LNG) terminals on the Baltic and North Sea coasts would help cushion the blow from the energy crisis on Germany’s crucial manufacturing sector. – Guardian

China has extended the olive branch to Western democracies and global capitalists alike, promising a new era of detente after the coercive “wolf warrior” diplomacy of the last five years. Vice-premier Liu He, the economic plenipotentiary of Xi Jinping’s China, told a gathering of business leaders and ministers in Davos that China is back inside the tent and eager to restore the money-making bonhomie of the golden years. – Guardian

Microsoft is preparing to axe thousands of jobs in the latest move by one of the world's biggest technology companies to reduce its workforce in the face of a slowing global economy. Sky News has learnt that the US software giant could announce plans to cull a significant number of posts around the world within a matter of days. – Sky News

About £260 million intended to support self-employed people during the pandemic was stolen, tax officials have told MPs. In the 2020-21 financial year, HM Revenue & Customs said that criminals accounted for a third of the “fraud and error” losses in an income support scheme for the self-employed. – The Times

Asda’s £600 million takeover of the Co-op’s petrol forecourts is being investigated by the competition watchdog. Asda, owned by the Lancashire-based billionaire Issa brothers and the private equity firm TDR Capital, agreed in August to buy 132 petrol stations and attached convenience stores from the Co-op. The deal was completed towards the end of last year and led to 2,300 workers moving to the supermarket giant. – The Times

US close

Wall Street stocks delivered a mixed performance on Tuesday as market participants digested more corporate earnings.

At the close, the Dow Jones Industrial Average was down 1.14% at 33,910.85, while the S&P 500 slipped 0.20% to 3,990.97 and the Nasdaq Composite saw out the session 0.14% firmer at 11,095.11.

The Dow closed 391.76 points lower on Tuesday, easily erasing gains recorded before the long weekend.

Corporate earnings were again in focus on Tuesday, with financial services company Morgan Stanley posting fourth-quarter earnings that beat expectations, driven by record revenues in its wealth management unit.

Elsewhere, Goldman Sachs reported a marked decline in fourth-quarter earnings, principally due to a massive increase in credit provisions in the period, while United Airlines expects full-year profits to quadruple in 2023 amid limited industry capacity.