London pre-open: Stocks seen little changed ahead of Fed, UK jobs data
Stocks in London were set to open little changed on Wednesday as investors eyed the latest policy announcement from the Federal Reserve and ahead of some key UK jobs data.
The FTSE 100 was called to open six points lower than Tuesday's close at 6,962.
On the data front, the UK unemployment rate, average earnings and claimant count are due at 0930 GMT. In the US, retail sales and industrial production are at 1330 GMT and 1415 GMT, respectively, while business inventories are at 1500 GMT.
The FOMC rate announcement is at 1900 GMT.
CMC Markets’ Michael Hewson said: “Expectations are pretty much nailed on for the Federal Reserve to pull the trigger on 0.25% hike in its Fed funds rate today, the only questions now being asked as to the messaging the committee puts out in the context of their expectations for future rate rises in 2017. Last year the Fed guided the markets to expect at least four rate rises this year, guidance that proved to be woefully wide of the mark, and it is likely that they won’t want to make the same mistake again, which suggests that Fed chief Janet Yellen can expect some serious cross examination of how the FOMC view, not only the economy, but also President elect Donald Trump’s plans for it.”
As far as the UK is concerned, Hewson said the latest wages and unemployment data for the three months to October is set to take on extra importance if the gap between wages and inflation, which has been declining for some months can be maintained in favour of incomes, even though retail prices excluding mortgages climbed to 2.5%.
Unemployment is expected to remain at 4.8%, while average earnings are expected to remain at 2.3%.
In corporate news, first-half profits from Dixons Carphone grew faster than expected and upped its dividend as it confidently prepared for its crucial festive season and various eventualities as the UK exits from the EU. In the 26 weeks to 29 October, group revenue rose 11% to £4.9bn and profit before tax by 19% to £144m, beating the consensus analyst forecast of £141m.
After announcing that it is to float two thirds of the asset management business on Tuesday, Old Mutual will sell 13m shares at $14.24 in a public offering expected to close on 19 December.
This is the latest move by the company, which said in March it will split into four parts by the end of 2018 to save costs.
Software product group Micro Focus International announced its unaudited interim results for the six months to 31 October on Wednesday, with revenues of $684.7m, 14.2% higher than the prior year's constant currency figures.
The FTSE 100 firm said underlying adjusted EBITDA was $320.3m, 20.9% higher at constant currencies, and adjusted diluted earnings per share increased by 20.5% to 89.20 cents.