London pre-open: Stocks to gain as investors eye US bank earnings

(Sharecast News) - London stocks were set to gain at the open on Tuesday as investors braced for a slew of US bank earnings.

The FTSE 100 was called to open around 25 points higher.

Attention will turn to the US, where earnings season will get into full swing, with JP Morgan, Wells Fargo, Citigroup and Goldman Sachs all slated to report quarterly numbers.

Kathleen Brooks, research director at XTB, said: "The highlight for this week will be the Q3 earnings reports for the major Wall Street banks including JP Morgan, Goldman Sachs, Morgan Stanley, Citi and Bank of America.

"These results can tell us important information about the health of the US economy. Are consumers still spending? What is the trend for loan arrears? Are businesses still borrowing at higher rates and are credit conditions tightening?"

Brooks said traders may also focus on global M&A flows and whether the banks see a slowdown in advisory income due to rising interest rates making mega cap mergers less likely in the coming months.

"Any comment on IPOs, including delayed IPOs for some of the most important names in AI, will also be worth listening out for," she said. "If banks paint a bleak picture of the US economy, this will be market-moving. While we could see bonds recover and yields fall, this could also be bad news for stocks, as traders could get spooked by signs of recession or weakening economic growth in the world's economic powerhouse."

On home shores, industry data showed that retail sales growth eased in September as consumers remained cautious ahead of expected rises in household bills and taxes.

The latest BRC-KPMG retail sales monitor showed that total retail sales rose 1.3% year-on-year last month, down from 2.3% growth in September 2025 and coming in below 12-month average growth of 1.5%.

Growth in food sales eased to 2.5% from 4.3% last September, while non-food sales increased 0.3% year-on-year following a 0.7% rise in September 2025.

In-store non-food sales were up 0.1% in September, down from 0.5% growth in the same month a year earlier, while online non-food sales ticked up 0.7% following 1.0% growth in September 2025.

The retail sales monitor showed that the online penetration rate - the proportion of non-food items bought online - rose to 38.3% in September from 37.9% in the same month a year ago. This was above the 12-month average of 38.1%.

Helen Dickinson, chief executive at the British Retail Consortium, said: "Retail sales growth remained subdued in September as households are still cautious with their spending ahead of expected rises in household bills and taxes. There were some bright spots, health and beauty recorded its strongest month of the year so far as consumers continued to prioritise small indulgences and refresh their routines. Toys also performed well, helped by the launch of Pokémon's 30th anniversary products. Clothing and footwear had a weak month as unseasonally warm weather weakened demand, but back-to-school spending saw a boost.

"The Chancellor cannot promise to ease the cost of living while piling more costs onto the retailers working to keep prices down. With confidence fragile, this Budget is a critical test. Retailers will do everything they can to protect value for customers, but Government must play its part. Another rise in business rates would push up pressure on prices, choke off high-street investment and put local jobs at risk. This Budget must back retail to invest, employ and grow - not make it harder."

In corporate news, housebuilder Bellway said it expected to complete fewer homes in the current fiscal year and deliver lower margins amid weak demand and a lower order book. The group is targeting total completions of between 9,000 and 9,400 compared with 9,695 in the prior year.

"Since the start of the new financial year, the subdued trading conditions experienced from late spring have continued. Customer demand remains constrained by affordability pressures, with mortgage interest rates above prior-year levels, while wider economic uncertainty continues to affect homebuyer decision-making," Bellway said.

The forecast comes after the company reported a 5.7% increase in underlying pre-tax profit to £305.7m in year to July and announced a £150m share buyback.

Elsewhere, commercial property development and investment firm Landsec said it has acquired a further 10% stake in Bluewater, taking its ownership of the Kent retail destination to 74%. Landsec paid £95m for the additional interest, a price it said reflects a 7.4% yield based on the net rental income generated by its existing holding.

A trading statement from BP and results from Premier Inn owner Whitbread, Bytes Technology and Transact owner IntegraFin were among the other highlights.