WPP makes slow start to 2017, Lloyds profit improves

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The FTSE 100 is expected to open 25 points lower on Thursday, after closing up 0.18% at 7,288.72 on Wednesday.

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Advertising giant WPP reported a slower start to 2017 after the loss of some major accounts but struck a confident tone about renewed and encouraging new business wins. Like-for-like net sales rose 0.8% in the first quarter, as expected by the market, down from the 2.1% growth in the fourth quarter of last year.

Housebuilder Persimmon said current forward sales revenue, including legal completions taken to date, was up 11% to £2.56 bn. It added that the weekly private sales rate per site since reporting 2016 results in February was 12% ahead of last year, resulting in a sales rate which was 4% ahead for the year to date. “We have 8,928 new homes sold forward into the private ownership market with an average selling price of c. £229,500, an increase of 4.1% over the prior year,” Persimmon said.

Lloyds Banking Group’s first quarter profit increased as the part state owned bank remains on track to meet its 2017 targets. Underlying profit increased 1% to £2.08bn compared to last year, and rose 16% compared to the previous quarter, with an underlying return on tangible equity of 15.1%.

Vodafone announced on Thursday that it had agreed to renew its strategic partnership with competitor mobile network Proximum in Belgium and Luxembourg for a further five years, building on a “successful long-term relationship” that began in 2003. The agreement would enable both companies to offer joint products and services across their networks to provide the “optimum experience” for their consumer and enterprise customers.

Newspaper round-up

The Trump administration unveiled what it called the biggest tax cuts “in history” on Wednesday, in a move that will simplify the US tax system, slash taxes for businesses large and small – including his own – eliminate inheritance taxes and set the president on a collision course with Congress over the likely $2tn-plus cost of the proposal. Critics immediately called it “basically a huge tax cut for the rich”. - Guardian

The Trump administration has given its strongest indication yet that Britain is sliding back in the queue to strike a free-trade agreement with America, with the US commerce secretary suggesting that a deal is a low priority. The upcoming general election and the UK’s need to negotiate a post-Brexit trade agreement with the EU were among several complications that made a deal with the US a low priority, Wilbur Ross said. - The Times

Business leaders will warn on Thursday that disputes over an EU divorce settlement worth “tens of billions of euros” risk jeopardising hundreds of billions worth of trade every year if they lead Brexit talks to collapse. In a speech at Cambridge University, CBI director general Carolyn Fairbairn is expected to urge negotiators on both sides to focus instead on the mutual benefits of continued free trade as they begin talks that will lead to Britain’s departure from the European Union. - Guardian

US close

US stocks were down on Wednesday as investors digested the details of President Donald Trump’s tax reform.

The Dow Jones Industrial Average lost 0.1% to 20,975.09, while the S&P 500 fell 0.05% to 2,387.45 and the Nasdaq 100 softened 0.13% to 5,541.09.

Trump’s chief economic adviser Gary Cohn and treasury secretary Steven Mnuchin confirmed on Wednesday afternoon that the President’s plan would cut the number of federal individual income tax brackets to three from seven, and slash corporate tax rates to 15% from 35%.

Trump tweeted on Saturday that his administration was set to make a big announcement on tax mid-week, after telling the Associated Press a day earlier that his proposal would contain a "massive tax cut" for businesses and individuals.

During the campaign when Trump floated the tax cut analysts said that it would enlarge the country’s deficit.

Russ Mould, investment director at AJ Bell, said that it is unclear whether any of Trump’s proposals will pass through Congress unmolested, especially as the November 2015 Bipartisan Budget Act, which suspended America’s debt ceiling, lapsed on 15 March.