Weekly review

The FTSE 100 ended the week 147.06 points higher, closing Friday’s session at 7,423.43.

Equity view

Drugmaker AstraZeneca raised full-year revenue guidance on Friday as it provided details of its "strong" first trading half and announced that Michel Demaré would take over as the group's chairman in April 2023. Astra-Zeneca, which reported a 48% increase in interim revenues to $22.16bn, said total revenues were now expected to increase by "a low twenties percentage", up from previous estimates in the "high teens".

Quality assurance group Intertek has agreed to acquire solar energy and energy storage sector services provider Clean Energy Associates as part of an effort to expand its end-to-end sustainability offering. Intertek said on Friday that the acquisition of Clean Energy Associates presented a "compelling opportunity" for the group to expand its sustainability service offering in the "fast-growing" quality assurance market for solar energy and energy storage.

UK luxury sports car maker Aston Martin Lagonda said first-half losses had widened as supply chain constraints hit production. The company on Friday reported a pre-tax loss of £285.4m in the six months to June 30, compared with a loss of £90.7m a year ago.

Infrastructure investor HICL Infrastructure said on Friday that it had successfully activated a £330.0m accordion within its revolving credit facility, increasing its overall short-term credit facilities to £730.0m. HICL stated the accordion was a one-year facility, expiring on 28 July 2023, and said the increased overall funding capacity will be used to support its immediate pipeline of acquisition opportunities.

Electric services company Centrica said on Thursday that it had delivered a "strong" operational performance in the six months ended 30 June, with adjusted earnings surging against a backdrop of "high and volatile" commodity prices. Adjusted underlying earnings skyrocketed 143% to £1.66bn, adjusted operating profits surged 412% to £1.34bn and adjusted earnings per share shot up to 11.0p from 1.7p at the same time a year earlier.

BT Group backed its full-year outlook on Thursday as it posted an uptick in first-quarter revenue after it lifted prices, but a decline in pre-tax profit. In the three months to 30 June, revenue nudged up 1% to £5.1bn. This was due to improved pricing and solid trading in the Consumer and Openreach divisions.

Drinks maker Diageo reported a jump in full-year sales on Thursday thanks to "resilient" demand and price increases. Net sales rose 21.4% to £15.5bn, with double-digit growth across all regions. The performance reflects the continued recovery of the on-trade business, resilient consumer demand in the off-trade and market share gains, Diageo said.

UK broadcaster ITV forecast flat total advertising revenue for the year to September before a boost from the Qatar football World Cup in November. The company posted a rise in statutory half-year pre-tax profits of £219m, up from £133m a year ago.

Healthcare group Haleon said on Wednesday that revenues had climbed in the six months ended 30 June, principally driven by organic revenue growth, higher prices, and an improved volume mix. Haleon, which was spun off from GlaxoSmithKline earlier in July, posted interim revenues of £5.18bn, up 11.6% year-on-year, with organic revenues advancing 11.6%, while prices were up 3.7% and volume mix 7.9%.

Budget airline Wizz Air said first-quarter operating losses widened as it was hit by higher fuel costs, despite soaring revenues and passenger numbers as air travel recovered from the Covid pandemic. The carrier on Wednesday reported a loss of €285m from €109m a year earlier. It flew more than 12m customers across Europe, with revenue up more than 300% to €808.8m.

Mining giant Rio Tinto posted a 29% fall in interim profits and cut its dividend by more than half on Wednesday as weaker iron ore prices due to cooling demand from Chinese consumers, higher costs, and labour shortages all weighed on the group. Rio Tinto reported an underlying profit of $8.63bn for the six months ended 30 June, down from an all-time high of $12.17bn at the same time a year earlier but just ahead of guidance for $8.37bn.

Finance provider Paragon Banking Group said on Wednesday that it had delivered "another strong performance" in the three months ended 30 June, leading it to reconfirm full-year guidance. Paragon said year-to-date advances had risen 16.7% to £2.2bn, with mortgage lending advances rising 7.5& to £1.3bn and commercial lending advances improving 32.3% to £900.0m. Net loans grew 7.2% to £14.0bn.

Food services group Compass said on Tuesday that underlying revenues had more than doubled in three months ended 30 June, with all three of the company's trading regions operating above 2019 levels. Compass said third-quarter underlying revenues were up 109%, with North American revenues up 112%, while revenues from Europe and the rest of the world were 104% and 106% stronger, respectively. Additionally, it noted that organic revenues were up 43.4%, an acceleration from the 37.9% improvement witnessed in the first half.

Staff shortages and travel chaos at airports cost easyJet £133m in the third quarter, the budget airline said on Tuesday. The company, which has been forced to cancel hundreds of flights due to a lack of plane crew and staff on the ground, reported a group headline loss before tax for the three months to June 30 of £114m, down from £318m last year.

Software, security and cloud services specialist Bytes Technology Group said growth in gross invoiced income, gross profit and adjusted operating profit all "comfortably" in double digits for the first four months of the financial year. "We've made a strong start to the financial year, with continued growth from both the corporate and public sectors. Whilst the macroeconomic backdrop remains uncertain, customer demand has remained robust and we continue to be well positioned to deliver on the significant opportunities in front of us," said chief executive Neil Murphy ahead of the company's annual shareholder meeting on Tuesday.

Flexible office space provider Workspace Group has disposed of a medical centre in Newbury for a total of £7.25m. Workspace said on Tuesday that the medical centre, an asset acquired as part of the McKay portfolio in May, was being sold at a premium of £1.15m to its March valuation.

Telecommunications group Airtel Africa's Kenyan subsidiary has purchased 60-megahertz of additional spectrum for $40.0m as part of an effort to support its 4G network capacity expansion in the market for both mobile data and fixed wireless home broadband capabilities. The FTSE 100-listed group said on Monday that the licence acquired by its Airtel Kenya Networks subsidiary from the Communications Authority of Kenya was in the 2,600-megahertz band.

Drugmaker AstraZeneca said on Monday that its Enhertu metastatic breast cancer asset had been granted priority review status in the US following results from its DESTINY-Breast04 trial. AstraZeneca said on Monday that the Food and Drug Administration had agreed to put Enhertu, developed jointly with Japan's Daiichi Sankyo, under priority review for the treatment of adult patients in the US with unresectable or metastatic HER2-low breast cancer who have received a prior therapy in the metastatic setting.

Molten metal flow engineer Vesuvius said on Monday that full-year trading profit was set to be towards the top of the range of analyst expectations following better-than-expected trading in May and June. The group expects earnings before interest and tax for the first half to be £127.4m.

Primary Health Properties has bought the Strawberry Hill Medical Centre, Newbury for £7.25m, the company said on Monday. The property is fully let to two GP practices, providing 100% government backed income, with an unexpired term of 19 years.

Economic news

Consumer credit expanded more quickly than expected last month amid a jump in credit card use but mortgage lending fell short of forecasts. According to the Bank of England, total lending to individuals increased by £7.1bn to reach 1,805.7bn or 0.4% month-on-month, with the latter roughly matching the clip of growth observed over the preceding quarter.

Two online fashion giants and a supermarket came under the scrutiny of the Competition and Markets Authority (CMA) on Friday, over the eco-friendly and sustainability claims made about products including clothing, footwear, and accessories. The regulator said the move was part of its ongoing investigation into potential greenwashing, following concerns around the way products were being marketed to customers as “eco-friendly”.

Retail sales continued to fall in the year to July, albeit at a more modest pace, as the cost-of-living crisis continues to take its toll, according to a survey released on Tuesday by the Confederation of British Industry. The CBI's retail sales balance came in at -4 compared to -5 in June, while the balance of expectations for July declined to -14 from -2 the month before - the lowest level since March 2021.

UK industrial output grew at the slowest pace in more than a year in the three months to July, reflecting softer demand domestically and internationally, according to a survey released on Monday. The Confederation of British Industry’s industrial trends survey revealed that its output balance dropped to +6 for July from +19 in April.

International events

US consumer confidence was a tad stronger than expected last month, the results of a very closely-followed survey revealed. The University of Michigan's headline consumer confidence index for July was revised up to 51.5, versus a preliminary estimate of 51.1 (consensus: 51.1) and June's print of 50.0.

US households continued to dip into their savings last month in order to finance their purchases amid continued price pressures. According to the Department of Commerce, personal incomes and expenditures rose at a month-on-month pace of 0.6% and 1.1% in June, respectively.

A broad measure of workers' compensation increased modestly more quickly than anticipated over the three months to June. According to the US Department of Labor, the Employment Cost Index advanced at a quarter-on-quarter clip of 1.3% during the second quarter.

Euro area second quarter gross domestic product growth left economists' forecasts in the dust. According to preliminary figures from Eurostat, in seasonally adjusted terms GDP was ahead by 0.7% quarter-on-quarter.

Euro area inflation edged past economists' forecasts during the second quarter, pushed higher by the cost of food, alcohol and tobacco, as well as services. According to Eurostat, the annual rate of increase in the single currency bloc's harmonised consumer price index picked up from 8.6% in June to 8.9% for July (consensus: 8.7%).

The American economy recorded a second straight contraction over the three months to June, fitting the often used technical definition of a recession. But some economists agreed with the country's central bank, arguing that the decline in activity was not broad-based, which for economists was a prerequisite for calling a recession, and were predicting a rebound in GDP over the back half of 2022.

Americans filed first-time unemployment claims at a slightly slower pace in the week ended 23 July, dropping by 5,000 to 265,000, according to the Department of Labor - short of expectations for a drop to 253,000. On a non-seasonally adjusted basis, claims fell by 42,417 week-on-week to 216,469, with notable decreases in Massachusetts, New York, and South Carolina.

Economic sentiment in the eurozone tumbled in July as the Ukraine conflict and surging inflation took their toll. The European Commission’s economic sentiment indicator fell to 99.0 from 103.5 in June, coming in below analysts' expectations of 102 and below the long-term average.

US monetary policymakers shifted back towards a meeting by meeting approach to setting interest rates on Wednesday, instead of offering explicit guidance on the magnitude of their next move. In his post-meeting press conference, Federal Reserve chairman, Jerome Powell, also said that at some point it will likely become appropriate to slow the pace of rate increases "while we assess how our cumulative policy adjustments are affecting the economy and inflation".

America's shortfall on trade in goods with the rest of the world shrank more quickly than expected last month, as imports slipped. According to the Department of Commerce, in seasonally adjusted terms the international trade deficit in goods narrowed in June at a month-on-month pace of 5.6%, from roughly -$104.0m to -$98.2bn.

US pending home sales fell in June following a slight increase the month before, as mortgage rates rose, according to figures released on Wednesday by the National Association of Realtors. Pending home sales declined by 8.6% on the month, taking the index to 91.0, while year-over-year, sales were down 20%, marking the slowest pace since September 2011.

Orders for goods made to last more than three years posted a sharp and unexpected rise last month, albeit mainly on the back of a near doubling in orders for defence aircraft. According to the Department of Commerce, total durable goods orders jumped at a month-on-month pace of 1.9% in June to reach approximately $272.6bn.

A eurozone recession is coming, Goldman Sachs said in a research note. The bank said it now expects a 0.1% contraction in the third quarter and a 0.2% contraction in the fourth, before growth resumes in the first quarter of next year.

The world's watchdog for financial stability lowered its projections for global economic growth in 2022 due to tighter central bank policies, Covid-19 lockdowns and the real estate crisis in China, and the war in Ukraine. In its autumn forecasts, which were released on Tuesday, the International Monetary Fund predicted that global gross domestic product would expand by 3.2% in 2022, which is down from 6.1% in 2021 and by 0.4 percentage points from the last set of forecasts made just a handful of months before, in April.

European Union members agreed to reduce their gas consumption on Tuesday in the face of increased gas rationing by Russia, albeit in a more watered-down fashion than that first proposed. The 27-member bloc agreed the up-to-15% reduction in gas prices with the caveat of “some exemptions and possibilities”, which had not been part of the earlier plans.

Germany is on the brink of recession, according to a survey released on Monday by the Ifo Institute. The survey found that business sentiment deteriorated significantly in July amid surging energy prices and worries about gas supply. The business climate index fell to 88.6 from 92.2 in June, hitting its lowest point since June 2020.

Reporting by Josh White, Iain Gilbert, Frank Prenesti, Michele Maatouk, Abigail Townsend and Alexander Bueso at Sharecast.com.