London pre-open: Stocks set to dip, US political soap opera in focus

Stocks in London looked set for a muted start as investors digested the latest political headlines out of the US and their potential implications for the stock market.

As of 0715 BST, FTSE 100 futures were off by 35.0 points at 8,187.50.

Dragging on UK stock futures was a further decline overnight on Wall Street and in many of the main Asian bourses.

Those falls were prompted by speculation swirling around just how far the Federal Reserve would be able to cut interest rates should Donald Trump take the White House and what the effects of his tariff proposals would be.

On that note, analysts at BNY Mellon wrote: "The effects of the Trump trade are not fully priced in markets according to our iFlow data.

"The yield curve could steepen further if we see evidence supporting the views of a Congressional sweep for Republicans and a Trump win."

There was also increasing speculation that the incumbent, president Joe Biden, might finally decide to sit out the next election.

"Of course, this political soap opera will unfold on X (formerly Twitter) and is likely to shift by the hour. There's chatter about Harris/Obama, then Hillary/Obama, and even Harris with some other Democrat," said Stephen Innes, managing partner at SPI Asset Management.

"What’s increasingly clear is that the Democratic Party is in disarray. But as I've said all along, and I’m not even on his side of the aisle, Biden has been a steadfast patriot, and regardless of your political leanings, this is a sad moment if the rumours hold."

On the economic side of things, and back on home shores, according to the Office for National Statistics UK retail sales fell at a month-on-month pace of 1.2% in June.

That was considerably worse than economists' forecast for a decline of 0.5%.

Data out from GfK overnight appeared to presage that result, with the consultancy's consumer confidence index improving by one point in July to -13.

Britons were reported to have taken a wait and see attitude following the elections.

In parallel, the UK public sector's net borrowing for last month was reported at £14.5bn, which was down from £17.8bn one year ago but above the £12bn anticipated by consensus.

LSE Group's RNS service knocked out

The London Stock Exchange's Regulatory News Service went haywire on Friday morning, close on the heels of an outage of US tech giant Microsoft's online services on Thursday evening. Other corporates across Asia, including in Japan, Hong Kong and India also reported outages with some of their software overnight.

Hargreaves Lansdown announced an increase in its assets under administration linked to the end of the tax year. At the end of its fourth quarter, its assets under management stood at £155.3bn with net new business of £1.6bn and 24,000 net new clients during the period. Hargreaves also reported an increase in client cash balances at the start of the third quarter, Dow Jones Newswires reported.

A joint venture half-owned by Segro has sold a portfolio of logistics warehouses in Italy for €327m (£275m), the company said on Friday. The portfolio consists of four warehouses, two located in Milan and two in Rome, and has a total floor space of 338,745 sq m generates a passing rent of €19m. The Segro European Logistics Partnership (SELP) is a joint venture in which Segro holds a 50% interest. It was established in October 2013 and owns €6.7bn of big box warehouses and development land across seven Continental European countries. Segro acts as its asset, property and development manager.