London pre-open: Stocks seen lower on US slowdown worries

(Sharecast News) - London stocks were set to fall at the open on Thursday following downbeat sessions in the US and Asia, amid concerns about a US slowdown. The FTSE 100 was called to open 38 points lower at 7,792.

CMC Markets analyst Michael Hewson said: "US markets initially started the day on the front foot until a double punch of weak data saw yields slide sharply on both the short and long end, prompting concerns that US economic activity was being impacted by the lagging effects of multiple rate hikes.

"This concern about the economic outlook, along with announcements from the likes of Amazon and Microsoft about job losses, saw US markets roll over after European markets had closed, closing sharply lower, as once again the S&P500 failed above the 4,000 level.

"Yesterday's weakness came as a result of concerns about the health of the US consumer. After a strong performance throughout most of 2022, consumer spending appears to have run out of steam with November and December retail sales declining 1% and 1.1% respectively. US PPI for December also saw a lower-than-expected rise of 6.2%, a sharp drop from the 7.4% seen in November."

In UK corporate news, homewares retailer Dunelm said it expected annual profits to be above expectations as consumers sought value for money amid the cost-of-living crisis.

The company said second-quarter sales were up 18% year on year, with customers flocking to buy items such as heated indoor airers to mitigate soaring energy costs.

Pre-tax profits are now forecast to be above a current company-compiled consensus average of analysts' expectations of £172m, with a range of £131m-186m.

Elsewhere, technology firm Sage Group reiterated full-year guidance after saying it had seen a strong start to the year.

Updating on trading, the accounting and finance specialist said total revenues in the three months to 31 December had strengthened 10% to £540m, or by 9% on an organic basis.

Within that, recurring revenues jumped 12% to £517m, while software sales declined by an expected 27%, to £23m, as Sage continued to move away from licence sales.