Must read: US dollar, Chinese data, Pearson, BT

Our head of investment rounds up the morning's big news.

GLOBAL MARKETS

This week is set to be another busy one in terms of earnings reports. Also, the Bank of England looks set to raise interest rates on Thursday, and the US non-farm payrolls report on Friday will potentially provide clues into the Federal Reserve’s next move. 

The US dollar is on track for its second monthly drop as US inflation continues to cool. And oil is poised for its best month in over a year, trading around three-month highs amid expectations of further output cuts from Saudi Arabia in September. 

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Most Asian markets started the week on a positive note with the Hang Seng and the Nikkei gaining over 1% on Monday. China’s official NBS manufacturing PMI hit 49.3 in July, marking the fourth straight monthly contraction, but beating analysts’ expectations. Its services PMI hit 51.5 in July, down from 53.2 month-on-month to hit a seven-month low.

PEARSON 

Pearson (LSE:PSON) reported adjusted operating profit in the first half up 44% to £250 million while sales increased by 5% to £1.8 billion. Assessment and qualifications sales were a bright spot with sales up 7%, along with workforce skills sales up 9% and English language learning sales up 44%. However, virtual learning sales fell by 15% and high education sales fell 2%. The education publisher said it is confidence about achieving its full-year expectations. 

Pearson has been repositioning itself towards digital education services and is harnessing artificial intelligence to support its Pearson+ service as well as other technological tools. It has also been focusing on upskilling and reskilling demand which have all helped to boost profitability. 

Shares in Pearson are trading higher today, buoyed by the stronger top and bottom-line performance. However, after a blockbuster share price performance last year, enthusiasm has been fading, with shares in the red year-to-date. It has suffered some price target cuts lately including from JP Morgan, Deutsche Bank and Barclays in July.

BT 

BT Group (LSE:BT.A) has appointed the boss of Sweden’s Telia, Allison Kirkby as its next CEO. She will replace Philip Jansen by the end of January 2024 at the latest after he announced departure plans earlier in July. 

Having been a non-executive director of BT since 2019, Kirkby has benefitted from first hand insight into the business at board level and, as the boss of Swedish telecoms giant Telia, she offers a wealth of experience in the sector. Kirkby is the continuity candidate, with plans to support BT’s existing strategy including cutting costs and its 5G and full fibre roll-out. She will also have to deal with French billionaire Patrick Drahi who has been amassing a stake in the business. 

Investors will be hoping that Kirkby can steer BT’s share price in a more positive direction, having almost halved under Jansen’s watch since 2019. However, the lack of market reaction today from the stock suggests shareholders may need some convincing.