What to Watch: Bellway and BAT sales hit, US stock rally

Tom BelgerFinance and policy reporter
Yahoo Finance UK
A Bellway construction site, in Ipswich, Suffolk, England. (BuildPix/Construction Photography/Avalon/Getty Images)
A Bellway construction site, in Ipswich, Suffolk, England. (BuildPix/Construction Photography/Avalon/Getty Images)

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and around the world:

Bellway new home sales plunge on COVID-19

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UK housebuilding giant Bellway (BWY.L) shares slid on Tuesday, as it revealed sales dropped 69% during the lockdown and warned they would remain “severely constrained.”

Bellway said the net average figure for reservations of new homes was down to just 71 a week between the start of lockdown in late March and 31 May. Reservations had stood at 231 a week in the same a year earlier.

Completions also dropped as Bellway shut down construction sites during the initial stages of lockdown, but it has since begun reopening building and sales sites. Work has restarted on around 230 sites, with a focus on homes closer to completion.

It declined to give fresh financial guidance, warning year-on-year sales activity would still be “severely constrained” by government lockdown measures.

But it said completions should “slowly increase” in late summer and autumn , and said its forward order book was only down 4% year-on-year.

British American Tobacco warns on growth

British American Tobacco (BATS.L) has cut growth targets for the year and pushed back its goal of hitting £5bn ($6.3bn)in sales for alternative products like vapes.

BAT, the company behind brands like Dunhill, Lucky Strike, and Pall Mall, blamed the COVID-19 pandemic for the downgrades.

In a statement on Tuesday, BAT said longer-than-expected lockdowns in markets like South Africa, Mexico, and Argentina had contributed to disappointing sales in emerging markets. In South Africa, authorities have temporarily banned tobacco and alcohol sales during the shutdown.

European markets dip despite new Nasdaq high

The Nasdaq (^IXIC) hit a new record high on Monday as investors bet on swift economic recovery, with a surge in technology and communication stocks but greater caution in European markets.

The S&P 500 (^GSPC) also reached its highest point this year and Asian stocks rose overnight as a rally continued to gather pace from the lows of mid-March, when coronavirus fears hammered stocks.

It gained fresh momentum after a surprise jump in US employment data on Friday, and signals on Monday the Federal Reserve’s loan schemes could be extended to more firms. Neil Wilson, chief market analyst for Markets.com, said it “looks like a mad fear-of-missing-out trade.”

The fresh optimism was not enough to push up leading European indices on Tuesday morning. Germany’s DAX index (^GDAXI) slid 1%, Britain’s FTSE 100 lost 0.6% (^FTSE), and France’s CAC 40 (^FCHI) slid 0.7%.

Wilson noted investors in European markets, with fewer tech giants than US indices, seemed unsure whether to follow the US higher or “show some more restraint given the economic uncertainty.”

What to expect in the US

Futures also pointed to a lower open in the US on Tuesday. S&P 500 futures (ES=F) were trading 0.9% lower, Dow Jones futures (YM=F) were down 1.1% and Nasdaq futures (NQ=F) were 0.5% lower at around 5.25am eastern time.

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