London pre-open: Stocks to edge down as investors eye Jackson Hole
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London stocks were set to edge lower on Thursday ahead of an eagerly-awaited speech by Federal Reserve chair Jerome Powell.
The FTSE 100 was called to open down around 7 points.
Powell is due to make a speech in Jackson Hole, Wyoming, on Friday, at the Federal Reserve’s annual conference of central bankers.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "Walking into the meeting, the swap markets are back to pricing in a 100bp cut from the Fed before the end of this year. The latter implies a jumbo rate cut at one of the last three FOMC meetings of the year. And because a jumbo rate cut wouldn’t arrive unless there is a deeper economic and financial trouble, the market pricing of the moment is unsustainable for either the US dollar - which has gone too low with the expectation of a 100bp cut, or the stock markets - which have gone too high with the same expectation disregarding the fact that economic trouble is never good for profitability. In summary,
"I think that something must give: either the US dollar will rebound, or equities will fall. But a weaker dollar and higher equities don’t make sense together."
In corporate news, sports apparel and footwear retailer JD Sports Fashion said it saw a return to like-for-like growth in its second quarter, with its store rollout programme in North America and Europe providing a boost while the UK market remains subdued.
LFL sales were 2.4% higher than last year in the three months to 3 August, following a 0.7% year-on-year decline in the first quarter. The company maintained its profit guidance for the full year but said it “continues to be cautious on our outlook”.
Serco said it has been awarded a $320m contract by the US Army Corps of Engineers to modernise the backup electrical plant at the US Space Force's Pituffik Space Base in Greenland.
The FTSE 250 outsourcing giant said the four-year contract would involve upgrading the plant to enhance the capacity and stability of the base's electrical network.
Serco's chief executive Mark Irwin highlighted the company's expertise in defence construction and its commitment to supporting mission-critical infrastructure for the US Space Force.