Yahoo Finance FTSE 100 Live 5 April: Index closes down 0.8% after early plunge, US jobs fly past forecasts yet again
Stock markets are under pressure after Brent Crude’s rise above $90 a barrel fuelled inflation worries.
The selling started on Wall Street last night amid fears that the Federal Reserve will be unable to cut interest rates in the summer.
The FTSE 100 index, which had been close to breaking the all-time high set in February 2023, traded about 1% lower today.
FTSE 100 Live Friday
Markets under pressure as crude tops $90
US jobs beat forecasts - again
House prices slip in March
National Insurance cut as tax year gets underway
Tesco set for profit rise as sales continue to grow at supermarket giant
Friday 5 April 2024 17:36 , Daniel O'Boyle
Tesco is expected to reveal higher profits as sales have continued to grow despite a slowdown in food price inflation.
Investors have been in positive spirits in recent months, particularly after Tesco upgraded its profit targets in a post-Christmas trading update.
Its shares struck their highest level for almost two years as a result, with the retail giant’s investment in pricing helping to maintain growth despite competition from fast-growing discount rivals.
'Empowering' fashion brand Sweaty Betty has one of UK’s biggest gender pay gaps
Friday 5 April 2024 17:23 , Daniel O'Boyle
Sweaty Betty - the female-focused London athleisurewear brand that says it is “on a mission to empower all women" - has one of the biggest gender pay gaps of any company of its size in the UK, the Standard can reveal.
The figures show Sweaty Betty has the 90th-largest median gender pay gap out of more than 10,000 in the Government database, or the 11th-largest gap of any company with more than 1,000 employees. The median woman at the company makes 46.2p for every pound made by men there, or 53.8% less. That puts Sweaty Betty in the bottom 0.4% of companies of its size for pay inequality.
FTSE 100 closes down 0.8%
Friday 5 April 2024 16:36 , Daniel O'Boyle
The FTSE 100 closed down 0.8% at 7,911.16, leaving record territory still some way away.
After an early plunge, London’s top flight index hardly moved for the rest of the day, barring a slight boost on the back of US jobs figures.
The fall means it was down 0.6% for the week.
Ocado was the biggest faller today, down almost 8%.
US stocks bounce back
Friday 5 April 2024 16:13 , Daniel O'Boyle
US stocks have recovered most of the ground lost in yesterday’s fall during early trading today.
The S&P 500 is up 0.9% at 5,193.54. The Dow Jones is up 0.6% at 38,817.50, while the Nasdaq is up 1% at 16,215.96.
City Comment: Scrapping the bonus cap has only widened the City’s gender inequality
Friday 5 April 2024 16:06 , Daniel O'Boyle
It is seven years since Theresa May told major employers to start publishing data on the pay gap between the men and women on their payrolls.
Along with the energy price cap it is one of the few enduring legacies of her turbulent three years as prime minister.
Although far from a perfect measure, the data has provided a useful snapshot. What stands out from the figures provided by today’s deadline is that while the gap in base salaries is closing in many sectors — tech in particular seems to have made good progress — the City still has a long way to go.
Could contactless fingernails be the next payments revolution?
Friday 5 April 2024 15:29 , Daniel O'Boyle
Would you get your bank card installed on your finger?
That’s what Simon Hunt did two weeks ago, and it’s changed the way he think about payments.
Banker bonus gap widens as men awarded more variable pay than women at top financial firms
Friday 5 April 2024 14:37 , Daniel O'Boyle
The gender pay gap has worsened across many of the City’s biggest banks in signs that men are reaping an increasingly large share of bonus pools, new figures reveal today.
The difference in average bonuses between men and women has widened in 11 out of 18 banks, according to government gender pay data analysed by the Standard.
Men now get more than 10 times the median bonuses that women do at NatWest, a deterioration on last year, while at Lloyds, the median bonus pay gap has widened by 21 percentage points such that women now earn 59% less than men. At Barclays, the bonus gap has worsened to 61%, and at HSBC it contracted slightly to 74% but remains among the highest.
'Cut-pause-cut' for the Fed?
Friday 5 April 2024 14:07 , Daniel O'Boyle
Daniele Antonucci, Chief Investment Officer at Quintet Private Bank, says that, given the current data, the Fed might cut this summer, only to pause to assess the effects before the next cut.
Antonucci said: “While we think lower rates, likely from the middle of the year or so, looks like a reasonable base case, the risk is that the Fed waits a while longer.
“Or, if the central bank was to cut in June or July, the timing of the subsequent moves is as uncertain as ever.
“It’s possible, if this job-market strength continues, that the Fed might implement a strategy of cut-pause-cut, hesitating to lower rates at consecutive meetings to buy time and observe how the economy and inflation respond.”
US 'soft landing' boost helps London amrets, but only a little
Friday 5 April 2024 14:01 , Daniel O'Boyle
London shares rose a little bit on the back of the stronger-than-expected US jobs figures, despite concerns they may mean interest rates will stay higher for longer.
The FTSE 100 is down 0.9% at 7,905.73, up around 15 points from before the readout.
That would leave it down 0.3% for the week.
'Demand for workers still well ahead of supply in US'
Friday 5 April 2024 13:57 , Daniel O'Boyle
Daniel Casali, Chief Investment Strategist at Evelyn Partners, the wealth management group, comments: “The key takeaway from this data release is that the jobs market continues to expand, reducing the risk of a US economic recession.
“The March non-farm payroll looks solid when compared to the 10-year average of ~180k, taken from up to the end of 2019 before the pandemic distorted the data. Other measures of hiring outside of the payroll report also corroborate a healthy labour market. For instance, the latest February job openings (from the JOLTS survey) reported earlier this week came in at 8.8m, down from a peak of 12.0m in March 2022, but it is still significantly up from a pre-covid level of around 7.0m at the end of 2019. Essentially, the demand for available workers (employed plus job openings) is running around 2m higher than the supply of workers (employed plus unemployed).”
US jobs figures still 'confounding expectations'
Friday 5 April 2024 13:51 , Daniel O'Boyle
Lindsay James, investment strategist at Quilter Investors, says: “US non-farm payrolls increased by 303,000 jobs in March, well ahead of expectations and above February’s marginally revised result of 270,000. Meanwhile, hourly earnings are projected to have risen by 4.1% compared to the same period last year. Earlier signs of a softening labour market, marked by a modest rise in unemployment and subdued wage growth, have been contradicted by recent data. This suggests that job creation and wage increases are maintaining their momentum and confounding expectations of an economic slowdown.
'Hard to say' what jobs print means for interest rates
Friday 5 April 2024 13:36 , Daniel O'Boyle
Richard Flynn, managing director at Charles Schwab UK, says the interest rate implications from the latest strong jobs print aren’t clear.
He said: “Today’s jobs figures are stronger than expected, indicating that there is a high level of demand in the labour market. The Fed recently demonstrated its optimism surrounding employment by raising its longer-run expectation for the so-called neutral rate, which is the Goldilocks interest rate – low enough to avoid hurting the economy or increasing unemployment, but high enough to keep inflation at bay.
“Today’s report is evidence of a healthy jobs market, supporting the Fed’s positive outlook. As for how this will impact rates in the short term, it’s hard to say. These figures seem unlikely to shift the expectation of three to four rate cuts over the next year, but given the uniqueness of this economic cycle, I think we’ve all learnt that forecasts should come with a certain amount of humility. The relationship between macroeconomic factors and policy has been incredibly hard to predict – it’s unsurprising that people keep getting it wrong.”
US jobs power past forecasts - again
Friday 5 April 2024 13:32 , Daniel O'Boyle
The US added 303,000 jobs in March, as payroll figures continue to blow past expectations.
Economists had expected 214,000 new jobs.
The shocking resilience of the US labour market could encourage the Fed to keep interest rates higher for longer.
The unemployment rate ticked down to 3.8%, as expected.
‘It says a lot that zero growth is progress’ - housebuilding slump bottoms out
Friday 5 April 2024 13:24 , Daniel O'Boyle
The UK’s historic housebuilding slump - which at its worst reached levels only seen during the pandemic and global financial crisis - appears to be finally bottoming out, according to a key business report.
But the figures still only show a sector in stagnation, meaning the absolute level of housebuilding is still nowhere near where it stood 18 months ago.
The influential S&P Construction PMI survey showed that residential building was essentially flat in March. The housebuilding index for the month came to 49.9, with 50 representing no change.
Markets need a 'Goldilocks scenario' on US payrolls
Friday 5 April 2024 13:12 , Daniel O'Boyle
Russ Mould, investment director at AJ Bell, says there is a risk that overly hot or overly cold US jobs figures could be bad news for a market that appears to be in risk-off mode.
He said: “Jobs data later today will provide a clearer picture for how the Fed might be thinking. It will be looking for a Goldilocks scenario where the temperature has to be just right on non-farm payrolls and unemployment figures. If the jobs data is too hot it could spook markets as the Fed might feel under pressure to keep rates as they are. Too cold and it will see the market fret about a hard landing for the economy.”
Thames Water owner in default
Friday 5 April 2024 12:49 , Daniel O'Boyle
The holding company of Thames Water Ltd. says it defaulted after failing to make some interest payments due on its debt.
Kemble Water Finance Limited has sent a formal notice of default to the holders of its £400 million bonds due in 2026 as it didn’t pay interest due on Tuesday on some of its other debt, according to a statement.
US payrolls in focus after yesterday's sell-off
Friday 5 April 2024 12:13 , Daniel O'Boyle
US payrolls figures will be closely watched today, after the country’s big stock sell-off yesterday spooked markets around the globe.
The US is expected to add 214,000 jobs in March, but forecasts have regularly underestimated the resilience of the US jobs market. Unemployment is expected to dip to 3.8%.
A labour slowdown may encourage the Fed to cut rates soon, while if the market remains strong, it may keep interest rates higher for longer.
Kathleen Brooks at XTB says: “As always with payrolls, it is not just the payrolls figure that matters for the Fed. The unemployment rate and earnings data are also key.
“Overall, this data suggests that the labour market in the US is robust, jobs growth is strong and average earnings are rising at an annual rate double the Fed’s target rate for inflation. If we only analysed this data, then it would be hard to justify the Fed hiking rates. However, there is a wider ecosystem of labour market data that the Fed looks at, and this is worth investigating in more detail.”
Shell set to see gas trading fall after ‘exceptional’ end to 2023
Friday 5 April 2024 11:26 , Daniel O'Boyle
Shell has revealed that trading in its gas division in recent months is set to drop after an “exceptional” end to the year for the energy giant.
The company saw its annual profits fall in 2023 compared with the previous year when soaring oil prices drove profits to an all-time high.
But its performance picked up in the final quarter with underlying earnings, including taxes, boosted by 17% compared with the previous three months to more than 7 billion US dollars (£5.6 billion).
City Voices: Inflation’s disappearing act to help household finances
Friday 5 April 2024 11:06 , Daniel O'Boyle
Everyone knows that inflation has been too high. We all see it and feel its pinch every time we buy a coffee, complete the weekly food shop, fill up the car or pay the utility bill. But things are about to change. Inflation will soon be very low. It may even fall close to zero.
CPI inflation has been above the Bank of England’s 2.0% target since May 2021. At one point in October 2022 it reached a 41-year high of 11.1%. It has since fallen back to 3.4% in February of this year. Even so, over the past three years the average price of the goods and services we buy has risen by a whopping 21%.
What’s more, the UK has had a bigger inflation problem than the US and most of Europe. CPI inflation in the US peaked at a lower 9.0% and the high in the euro-zone was 10.6%. The total rises in prices over the past three years in the US and the euro-zone was smaller, both coming in at 18%.
But all this is about to change. When the data for April are released in mid-May, I suspect we’ll discover that inflation in the UK fell below the 2.0% target for the first time in three years. What’s more, my forecast is that inflation will fall below 1.0% in the summer and by the end of the year it may be just 0.5%. At that point, it wouldn’t take much of a further fall for inflation to disappear completely.
Majestic buys wine bar chain Vagabond from administration
Friday 5 April 2024 10:54 , Daniel O'Boyle
Majestic has completed a rescue deal to buy wine bar chain Vagabond from administration.
The UK’s largest specialist wine retailer confirmed talks over a potential move last month after Vagabond Wines went into insolvency.
On Friday, Majestic confirmed it has completed the acquisition, which will secure the future of nine Vagabond venues and 171 workers.
Will 'pent-up caution' hold back the economy?
Friday 5 April 2024 10:32 , Daniel O'Boyle
Panmure Gordon economist Simon French wonders whether the UK’s rebound from recession will continue this quarter, or if ‘pent up caution’ could hold the economy back.
Housebuilding doesn't decline for first time since 2022
Friday 5 April 2024 10:26 , Daniel O'Boyle
Housebuilding output was flat in March - meaning it didn’t decline for the first time since 2022 - according to the latest PMI survey.
It follows a huge slump in which building fell at rates only previously seen during the pandemic and global financial crisis.
Overall construction was very slightly up, ending six months of decline.
Tim Moore, Economics Director at S&P Global Market Intelligence, which compiles the survey said: "UK construction output returned to growth in March as a renewed expansion of civil engineering work was supported by more stable conditions in the housing and commercial building segments. The marginal overall rise in total construction activity ended a six-month period of contraction.”
FTSE down 1% but outperforming peers
Friday 5 April 2024 10:09 , Daniel O'Boyle
Kathleen Brooks at XTB says: “The inauspicious start to Q2 has continued, this time with a large decline in European shares at the end of this week. European stocks are a sea of red, with the heaviest declines for Italy’s FTSE MIB, the Eurostoxx index and the Dax. The move follows sharp declines for US stocks, as the rise in the oil price pushes Brent crude above $90 per barrel and WTI above $86 per barrel.
“Stocks look set to register a negative weekly performance, with the Dow Jones currently down 3% so far this week. The Nasdaq and S&P 500 are both down approximately 2% so far this week. In Europe, the losses have been less steep, notably for the FTSE 100, which is holding up the best in Europe so far on Friday and is down 0.6% so far this week.”
Travel stocks under pressure as FTSE 100 falls 1%, Shell higher
Friday 5 April 2024 10:07 , Graeme Evans
A bout of stock market turbulence after Brent Crude topped $90 a barrel today unsettled the recoveries of FTSE 100 airlines easyJet and IAG.
The risk of higher fuel costs triggered share price declines of about 3%, although IAG’s fall of 4.75p to 171.8p still left the BA owner a fifth higher over the past month.
Low-cost carrier easyJet shed 19p to 550.8p, while the FTSE 250-listed cruise ship operator Carnival fell 3%.
The setback for the travel sector came during a wider market sell-off as traders voiced their fears about longer-lasting price pressures.
Oil prices are at a five-month high, having risen by about 18% this year on a combination of increased geopolitical risk, lower OPEC+ output and robust economic growth.
The potential for a delay in interest rate cuts caused the FTSE 100 index to slide by almost 1% or 74.16 points to 7901.73, having been near a record on Thursday.
Rate-sensitive stocks including technology-focused Ocado were among the heavy fallers, down 12.2p to 405p. Its joint venture partner Marks & Spencer also lost 6.5p to 259.4p, alongside a decline of 6.7p to 242.8p for B&Q owner Kingfisher.
Shell was one of only two stocks on the FTSE 100 risers board, up 4.5p to 2768.5p as it benefited from the higher oil price and a positive reception to its first quarter update.
US bank Jefferies, which has a price target of 3000p, said volumes across all businesses were better than expected as Shell also reported improved margin trends.
The UK-focused FTSE 250 fell by 1% or 204.43 points to 19,668.76, with Aston Martin Lagonda down 4.6p to 162.9p and Watches of Switzerland off 10.6p to 345.2p.
Inflation could hit zero within months, defying Bank of England forecasts, City economists say
Friday 5 April 2024 09:27 , Daniel O'Boyle
CITY economists are increasingly convinced that inflation is falling more sharply than the Bank of England expects and could even hit zero within months.
That would open the path to much faster interest cuts than the market expects, a boost to family finances and to the Conservative Party ahead of a looming general election.
The experts now think inflation will be below the Bank’s 2% target as soon as May – and perhaps even lower than that.
Simon French at Panmure Gordon said: “With ongoing falls in wholesale gas prices there is now a decent chance that UK inflation dips below 2% in the Spring. This will pile on political pressure for the Bank to deliver some pre-election interest rate cuts”
Officially, central bank chiefs have been careful to say that inflation remains a problem.
This week Federal Reserve chair Jay Powell warned that the fight against inflation is “not done” and he needed “greater confidence” to start cutting borrowing costs.
Average UK house price fell by about £2,900 in March, says Halifax
Friday 5 April 2024 08:46 , Daniel O'Boyle
Speaking on the latest Halifax house price index data, Oliver Fish, Director at boutique Mayfair-based estate agency, Oliver & Co, said: "Affordability is a real issue at present. The cost of borrowing is making buyers think whether they should buy something smaller, in a cheaper area or wait to see if borrowing gets cheaper. We need to see the Bank of England reduce the base rate for conditions to improve, but that depends on inflation, as the Halifax observes.”
Read more on the latest figures here
Oil stocks buck negativity, Ocado and Entain fall
Friday 5 April 2024 08:43 , Daniel O'Boyle
Victoria Scholar, Head of Investment, interactive investor says, “European markets are suffering today, taking their cues from a sell-off on Wall Street and weakness overnight in Asia. On the FTSE 100, oil stocks BP and Shell are bucking the negativity, trading in the green while Ocado, easyJet and Entain are languishing at the bottom of the basket.
The Dow suffered its worst day in over a year with the three US major averages all shedding over 1% each. All eyes are on the latest US jobs report with consensus for 200,000 job additions and a reduction in the unemployment rate to 3.8% in March.
Precious metals are taking a pause for breath after gold hit an all-time high on Thursday, breaking above $2,300, rounding off an impressive three-week rally partly thanks to strong central bank buying. Oil is trading higher, on track for its second weekly gain buoyed by geopolitical uncertainty and the potential for stronger demand on the back of improving economic data.”
FTSE 100 down 1% as airline stocks weaken, BAE Systems higher
Friday 5 April 2024 08:30 , Graeme Evans
A risk-averse session triggered by Brent Crude’s rise above $90 a barrel today left the FTSE 100 index about 1% lower, down 86.07 points at 7889.82.
Rate-sensitive stocks were among the big fallers, with Ocado 3% or 12p lower at 405.2p and Scottish Mortgage Investment Trust off 20.8p at 863.2p.
Fears of higher fuel costs meant airlines easyJet and IAG weakened 2%, while Barclays dropped 4.3p to 192.8p and Anglo American slipped 56.5p to 2104.5p.
A shortened risers board included the defensively positioned BAE Systems, which lifted 6.5p to 1320p, and the oil giants BP and Shell. The latter rose 11p to 2775p after it also published a first quarter trading update.
The FTSE 250 index fell 0.9% or 179.49 points to 19,693.70, with travel-focused stocks Carnival and TUI among those marked down by more than 2%.
Worst run for the high street since Covid capped by more falling sales in March
Friday 5 April 2024 07:49 , Michael Hunter
There were more bleak times for the retailers in March, when sales continued to fall across the UK’s beleaguered high street.
A long-standing industry tracker compiled by BDO dropped for the sixth consecutive months, making this the worst run for the data since the Covid-19 pandemic.
Total like-for-like sales fell by 2.2%. In-store sales were down 1.8% and there was no relief from the internet, with online sales down 2.3%.
BDO’s Sophie Michael said:
“These results continue to paint a bleak picture for retailers. Despite both the Easter bank holiday weekend and Mother’s Day falling in March this year, these results serve as a stark reminder of the pressure the sector is under.”
BDO is an international tax and audit firm with 17 UK offices.
Its high street sales tracker compiles weekly like-for-like sales data from 80 mid-tier retailers with running around 10,000 individual stores.
Millions of workers to enjoy national insurance cut as new tax year starts
Friday 5 April 2024 07:42 , Daniel O'Boyle
Millions of workers will receive a national insurance cut as the new tax year gets underway, helping to ease some of the strain on household budgets.
The main rate of employee national insurance will be cut from 10% to 8% from April 6 – the first day of the 2024-25 tax year.
When combined with a cut previously announced in the autumn statement, this will save the average worker on £35,400 more than £900 a year, the Government has said. About 27 million workers will benefit from the reduction.
US sell-off 'has people scratching their heads'
Friday 5 April 2024 07:21 , Daniel O'Boyle
Kyle Rodda, senior market analyst at Capital.com, says the plunge in US stocks had more to do with global geopolitical risks than interest rates.
Rodda said: “The overnight price action has people scratching their heads. It was a classic risk-off move, however one that hasn’t been seen in quite some time. The catalyst appears to be fears of a broadening conflict in the Middle East amidst fears of an Iranian reprisal for the assassination by Israel of one of its key military leaders.
“Stocks fell, and bonds rallied, so did the US Dollar and gold is near record highs, suggesting that, contrary to one narrative floating around the markets, the move wasn’t associated with hawkish Fed-speak—in particular, from Minnesota Fed’s Neel Kashkari. The dead giveaway was the spike in oil prices. It’s closing in on six-month highs, driven by the risk of supply shocks.”
FTSE 100 seen 1.2% lower after US markets slide, crude oil above $90
Friday 5 April 2024 07:19 , Graeme Evans
London’s FTSE 100 index is set to fall by about 1.2% after Wall Street shares last night slumped on fears that US interest rates will stay elevated for longer.
The sight of Brent Crude above $90 a barrel contributed to the worries that persistent inflation pressures will delay the hoped-for summer cut in rates.
The Dow Jones Industrial Average fell 1.4% and the S&P 500 index by 1.2%, leaving US markets on course for their worst week since October. The VIX index of volatility also jumped to a five-month high.
IG Index is reporting that futures markets expect the FTSE 100 index to decline by almost 100 points to 7878. The top flight yesterday finished within sight of a record high, having risen 0.5%.
The selling comes ahead of today’s release of US non-farm payrolls, which will offer fresh clues about the interest rate outlook.
Deutsche Bank economists are forecasting growth in payrolls of 200,000, which compares with the previous month’s reading of 275,000. The unemployment rate is seen ticking down a tenth to 3.8%.
Halifax: UK house prices slip in March, but up from last year
Friday 5 April 2024 07:09 , Daniel O'Boyle
UK house prices declined y 1% during March, but are still slightly up year-on-year, according to Halifax.
The latest Halifax House Price Index showed the average price was £288,430. That’s down 1% from February but up 0.3% from last March.
In London, prices grew slightly faster year-on-year, by 0.4% to £539,917.
Kim Kinnaird, Director, Halifax Mortgages, said: ““That a monthly fall should occur following five consecutive months of growth is not entirely unexpected, particularly in view of the reset the market has been going through since interest rates began to rise sharply in 2022. Despite this house prices have shown surprising resilience in the face of significantly higher borrowing costs.”
Recap: Yesterday's top stories
Friday 5 April 2024 06:36 , Simon Hunt
Good morning from the Standard City desk.
For the unfashionable over-50 crowd who like Superdry clobber the idea that it might disappear altogether seems more than a shame.
No one is mistaking me for a clothes horse, but it does nice fitting chinos and jackets that are smart enough to work anywhere.
When Superdry floated on the stock market in 2010 at 500p it was valued at £395 million, it had no debt, and co-founder Julian Dunkerton banked £80 million and had stock then worth another £130 million.
Since the stock is now about 10p and the company is worth £10 million that valuation now looks absurd.This never was Dunkerton’s fault – he hired bankers to get him a price, that’s the one they got. Then he handed over to other management, who vastly exaggerated the possibilities Superdry had of becoming some sort of global lifestyle brand. (The price point is different, but see also: Aston Martin.)
The pity about brands like Superdry is that they are stuck in the squeezed middle.
At the cheap end, Primark soars. At the top end, Burberry does well.
In the middle, Superdry, Ted Baker and the rest have a really rough game to play.
Their best bet is to be bought out by (shudders) Sports Direct, now Frasers Group, with the kit downgraded and sold for cheap.
~
Here’s a summary of our top headlines from yesterday:
Co-op shows faith in mutual model with target for 8 million members by 2030 as the total passes 5 million, amid a doubling in the number of sign-ups.
Bet365 fined £582,000 - less than a day’s pay for CEO Denise Coates - after gambling watchdog found insufficient player protection and money laundering checks
Country Life publisher Future says its revenue is growing again, driven by Go Compare, which offset effects of “challenging" digital advertising market
Markets: Gold at record $2300 an ounce as Fed boss sticks to line that rates likely to fall this year. FTSE 100 up 9.7 points at 7947.
CAB payments gets a payments license to operate in the EU, raising hopes it can turn around its fortunes after a catastrophic IPO last year
And...why it’s too early to judge the success of the Future Fund
