Market Report

European stocks traded higher on Tuesday afternoon amid another earnings dump as investors looked ahead to rate decisions from the US and UK.

Investors will be closely watching the US Federal Reserve’s July meeting – which concludes on Wednesday – with expectations that rates will be kept on hold one more time before a cut is implemented.

UK stocks put on a mixed performance with the FTSE 250 enjoying solid gains buoyed by earnings releases from constituents St James’s Place and Greggs.  The FTSE 100 traded flat on the day on a weaker profits announcement by drinks giant Diageo which became the latest victim of a collapse in global consumer confidence.

Meanwhile, the Bank of England’s monetary policy committee will meet on Thursday, with no indication yet on whether it will cut or hold interest rates.

Sterling receded slightly against the US Dollar and the Euro with investors nervous about placing too large bets ahead of the upcoming central bank announcements.

The Japanese Yen weakened as traders had last-minute doubts about whether the Bank of Japan would hike rates later on this week.

Renewed tech weakness weighed on US markets with Nvidia tumbling 5% trading at its lowest level since late May as the market awaits Bit Tech earnings. 

 Gold prices were slightly stronger and flirted around the $2,400 level as markets positioned for the Fed meet and a deluge of US economic data due later in the week for clues on the pace and scale of the Fed's cuts.

U.S. crude prices continued to fall amid growing concerns over Chinese demand and expectations of China’s manufacturing activity shrinking for a third month in a row.

In corporate news:

Drinks giant Diageo disappointed in its preliminary 2024 results, with organic operating profit down 4.8% to $304m, of which $302m was attributable to weaker performance in Latin America and the Caribbean.

The world’s biggest spirits company, home to brands such as Guinness, Johnnie Walker Scotch whiskey, Baileys Irish cream, Gordon’s gin and Smirnoff vodka, reported its first drop in annual sales since the 2019-20 financial year when the first few months of COVID lockdowns hit sales in pubs, bars and restaurants around the world as well as duty free sales in airports.

On the upside, shares in Standard Chartered jumped as the Asia-focused bank announced its biggest-ever share buyback, of $1.5bn, and raised its outlook in half-year results.

Shares in UK wealth manager St James’s Place surged over 20% after the company pleased the market by announcing plans to cut millions in costs.