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(Alliance News) - Markets lacked direction Friday, as investors grew increasingly concerned about the stalemate in Washington on a new stimulus for the world's biggest economy.
Hopes that Democrats and Republicans would cast aside their mutual animosity to stump up much-needed cash for struggling Americans have been key to supporting equities for weeks.
But they were dealt a blow Thursday when senators broke up for a summer recess, saying they would not return until early next month, while both sides continued to trade accusations over who was to blame for the impasse.
Democrats have called on Republicans and the White House to double their USD1 trillion offer, having reduced their own proposal to USD2 trillion from an initial USD3.5 trillion.
But Senator Leader Mitch McConnell accused his opponents of pushing for several socialist measures to be introduced into the new bill, describing their tactics as "throwing spaghetti at the wall to see what sticks", AFP reports.
Still, the expectation remains that an agreement will at some point be found, particularly with a US election just over two months away and millions of Americans in financial crisis.
Here is what you need to know at the London market open Friday:
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MARKETS
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FTSE 100: called down 0.1% at 6,191.10
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Hang Seng: up 0.4% at 25,329.71
Nikkei 225: closed up 0.2% at 23,289.36
DJIA: closed down 80.12 points, or 0.3%, at 27,896.72
S&P 500: closed down 0.2% at 3,373.43
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GBP: down at USD1.3060 (USD1.3084)
EUR: soft at USD1.1817 (USD1.1830)
Gold: firm at USD1,949.35 per ounce (USD1,947.60)
Oil (Brent): flat at USD45.10 a barrel (USD45.18)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
1100 BST Ireland goods exports and imports
1100 CEST EU flash estimate gross domestic product
1100 CEST EU flash estimate employment
1100 CEST EU foreign trade
0830 EDT US advance monthly sales for retail & food services
0830 EDT US preliminary productivity & costs
0915 EDT US industrial production & capacity utilization
1000 EDT US manufacturing & trade
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Joe Biden, the presumptive Democratic presidential nominee, called for a nationwide face mask mandate in the US to curb coronavirus contagion. "Every single American should be wearing a mask when they're outside for the next three months at a minimum," Biden told a news conference. "Let's institute a mask mandate nationwide starting immediately and we will save lives." The former vice president said the measure could save more than 40,000 lives in the next three months, and noted that more than 165,000 people have died already in the US. "It didn't have to be this way," Biden said, adding that if President Donald Trump had acted earlier, thousands of fatalities could have been avoided. Biden was speaking at his second public appearance with his newly-selected running mate, Kamala Harris, after the pair was briefed on the coronavirus by public health experts.
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BROKER RATING CHANGES
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CITIGROUP CUTS DOMINO'S PIZZA GROUP TO 'SELL' ('NEUTRAL') - TARGET 290 PENCE
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BERENBERG RAISES BODYCOTE TO 'BUY' ('HOLD') - TARGET 775 (550) PENCE
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COMPANIES - FTSE 250
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easyJet said it has completed the sale and leaseback programme for a total of 23 aircraft, generating total proceeds of GBP608 million. The value was at the upper end of the GBP500 million to GBP650 million anticipated range, which easyJet first highlighted in its trading update in May. easyJet said it will use proceeds from the deal to maximise liquidity and strengthen its financial position. The airline said that following the successful conclusion of this sale and leaseback programme, it has now raised over GBP2.4 billion since the beginning of the Covid-19 pandemic.
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COMPANIES - MAIN MARKET AND AIM
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Verona Pharma said it has received a notice to proceed from the US Food & Drug Administation to study ensifentrine in patients with Covid-19. Verona is developing a drug known as ensifentrine, which opens patients' airways and reduces inflammation in the lungs. For the half-year ended June 30, Verona's pretax loss widens to GBP19.6 million from GBP17.8 million. "We plan to initiate a randomized, double-blind, placebo-controlled pilot clinical study to evaluate ensifentrine delivered via pressurized metered-dose inhaler formulation as a treatment for patients hospitalized with Covid-19 at the University of Alabama at Birmingham. Clinical data from prior studies of ensifentrine in other respiratory diseases have demonstrated ensifentrine improves lung function and reduces cellular markers of inflammation in the lungs. We believe ensifentrine, with its novel mechanism of action, has the potential to improve oxygenation and lung function assisting recovery from Covid-19," said Chief Executive David Zaccardelli.
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NewRiver REIT said its trading performance in the first quarter ended June 30, was in-line with revised expectations. Further, the real estate investment trust said rent collection continues to improve in the second quarter. Of the total second-quarter rent demanded so far, 80% has either been collected or had alternative payment terms agreed with occupiers, NewRiver said. NewRiver noted that since the easing of lockdown measures in the UK, footfall has continued to improve across its retail portfolio. The retail property investor said that, across its retail portfolio, 93% of occupiers by gross income are now open. In addition, the remaining 7% comprises of stores that are expected to reopen in the coming weeks, as occupiers progress phased reopening plans, it added. "We continue to have limited exposure to the structurally challenged retail sub-sectors that have been particularly impacted by Covid-19, with no department stores in our portfolio, minimal exposure to mid-market fashion, and no exposure to casual dining operators such as Byron, Carluccio's, or any of the brands owned by The Restaurant Group or The Big Table Group," NewRiver noted.
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COMPANIES - GLOBAL
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National Australia Bank reported a slip in third quarter profit amid further credit impairment charges. Cash earnings in the three months to June 30 fell 7.0% on a year ago to AUD1.55 billion - though this was up 5% when stripping out tax and credit impairment charges. NAB took AUD570 million in credit impairment charges in the quarter, down 2% compared with the quarterly average impairment taken in the first half of the year. Its common equity tier one ratio of 11.6% at June's end was up from 10.4% at March. During the quarter, the Melbourne-based bank said it deferred repayment on 86,000 home loans and 38,000 business loans, totalling AUD55 billion. "The outlook remains highly uncertain, but decisive actions in April to strengthen our balance sheet allow us to support customers, while keeping out bank safe," said Chief Executive Ross McEwan, who previously led Royal Bank of Scotland Group, now NatWest Group.
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Friday's Shareholder Meetings
NewRiver REIT
Impax Environmental Markets - GM re share issue authority
Adamas Finance Asia
Aura Energy Ltd - GM re removal of directors
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By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
