Market movers: Europe follows Wall Street into the red, oil, Rank Group

Victoria Scholar, interactive investor's head of investment, runs through today's big stories and how financial markets are reacting. 

Negative momentum from a down day on US and Asian markets has carried forward to the European session with markets opening in the red. The FTSE 100 is underperforming, trading below resistance at 7,50, while the DAX and the FTSE MIB are eking out modest gains.

US markets closed lower after the Fed’s meeting minutes for July showed that policymakers saw little evidence that inflationary pressures are softening stateside. The FOMC appears to be committed to its rate-hiking path with the potential for a 50 or 75 basis point rate hike in September followed by a possible slowdown in the pace of rate increases in the following months.

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Oil prices are trading just above the flatline with WTI and Brent crude straddling the $90 a barrel handle. Expectations for slowing demand as the global economy cools alongside gradual oil production increases from Russia have pushed prices lower in recent sessions. Brent crude is trading in a medium-term descending trendline, down by around 25% since the peak in June.

RANK GROUP

Rank Group (LSE:RNK) reported full-year operating profit of £82.1 million, swinging from a loss of £92.9 million last year. Looking ahead it said underlying net gaming revenue is running 3% ahead of the prior year in the first seven weeks of 2022-23. However, the owner of Mecca bingo warned that trading conditions are likely to remain challenging in the months ahead.

Rank Group has been waiting patiently for government proposals to reform gambling laws, which much to the company’s frustration have been postponed four times since 2019 amid a dispute among Conservative party members. The UK’s regulatory tightening and uncertainty continue to be major headwinds for stocks such as Rank Group and 888 Holdings (LSE:888) alongside the cost-of-living crisis which leaves individuals and households with less disposable income left over at the end of the month. As a result, Rank Group suffered its second profit warning in three months back in June. The stock has fallen out of favour among investors in recent years, shedding around 60% since April 2021 and more than 70% since its pre-pandemic peak.