Taylor Wimpey reports sharp drop in profits, BAE Systems raises guidance

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FTSE 100 futures were down by 56.0 points at 7,595.0.

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Taylor Wimpey said that revenues shrank by 21.2% to reach £1.64bn, alongside a drop of nearly 29% in its profit before tax to £237.7m, for earnings per share of 5.0p. Management highlighted what it termed as the company's "resilience" and said its focus in the back half of the year remained on optimising all areas of its operations, calling attention to its "robust" balance sheet and "excellent" landbank. Net cash at period en stood at £654.9m, up from £642.4m in the year earlier period. Its interim dividend was bumped up from 4.62p per share to 4.79p.

UK defence manufacturer BAE Systems on Wednesday lifted full-year guidance as the war in Ukraine led to increased demand for weapons, leaving the company with a record order book. Sales guidance was increased by 200 basis points to 5 - 7%, reflecting the accelerated spend profile on the Dreadnought submarine programme and good demand and operational performance across all sectors, while underlying earnings before interest and tax (EBIT) was lifted by the same amount to 6 – 8%.

In the press

The Bank of England should carry out an interest rate rise of a quarter of a percentage point tomorrow to keep control of stubbornly high inflation, The Times shadow monetary policy committee has argued. An overwhelming majority of the shadow MPC voted by 8-1 in favour of a 25-basis-point increase to the base rate this month, a step down from the rise of half a percentage point that the Bank was forced to carry out in June, when wage growth accelerated more than expected. The Bank rate is 5 per cent at present, the highest level since 2007. - Sunday Times

Rating agency Fitch downgraded the US government’s top credit rating on Tuesday, a move that drew an angry response from the White House and surprised investors. Fitch downgraded the United States to AA+ from AAA, citing fiscal deterioration over the next three years and repeated down-the-wire debt ceiling negotiations that threaten the government’s ability to pay its bills. It is the second major rating agency after Standard & Poor’s to strip the US of its triple-A rating. - Guardian

Shoplifters are overrunning retailers and avoiding public rebuke because politicians have accused supermarkets of profiteering, the chief executive of Co-op Food has said. Matt Hood said there has been a surge in crime at his stores and that he was “disappointed” people were defending looters after MPs criticised rip-off prices. Co-op, which runs 2,500 outlets, recently released figures showing police were not responding to more than 70pc of call-outs over serious crimes in its stores. - Guardian

US close

Wall Street's main market gauges finished on a mixed note om the first trading session of the third quarter, against a backdrop of rising government bond yields.

The Dow Jones Industrial Average added 0.20% to 35,630.68, alongside a 0.27% dip for the S&P 500 to 4,576.73.

The Nasdaq Composite meanwhile slipped 0.43% to 14,283.91.

In parallel, the yield on the benchmark 10-year U.S. Treasury note was pushing farther above the 4.0% level, adding seven basis points to 4.03%.

Overnight, the U.S. Treasury had boosted its estimate for federal government borrowing in the third quarter from $733bn to $1trn.