Yahoo Finance FTSE 100 Live: ‘Consumer confidence hit for six’; shares lower; record bank withdrawals; B&M sales up
The FTSE 100 index is struggling for direction today after the boss of the Federal Reserve signalled at least two more US rate hikes.
As well as the response to Jerome Powell’s latest guidance, US traders will be looking to see if Apple can close out a $3 trillion valuation for the first time after moving to the brink of the threshold yesterday.
Elsewhere, the Bank of England has published its money and credit statistics including mortgage approvals for May.
FTSE 100 Live Thursday
BoE mortgage stats fuel fixed rate worries
Serco upgrades guidance but FTSE struggles
B&M Q1 revenues top £1bn
Thursday 29 June 2023 23:39 , Daniel O'Boyle
End-of-day market snapshot
Thursday 29 June 2023 16:52 , Daniel O'Boyle
Here’s all the key market data at the end of the day
FTSE closes at 7,471.69
Thursday 29 June 2023 16:40 , Daniel O'Boyle
The FTSE 100 closed at 7,471.69 today, down 0.4% and erasing most of yesterday’s gains.
The index of London blue-chips fell as low as 7462 before a sight rally.
The biggest riser of the day was Barclays, while B&M was the biggest faller despite reporting UK sales beyond £1 billion.
ChatGPT maker OpenAI picks London for first offices outside the US
Thursday 29 June 2023 15:51 , Daniel O'Boyle
OpenAI, the startup behind the controversial ChatGPT chatbot, has chosen London to be the location for its first offices located outside the US.
Sam Altman, the chief executive of OpenAI, who has been increasingly more vocal about artificial intelligence (AI)’s potential harms to the US Congress and others, said he sees expanding to London as “an opportunity to attract world-class talent and drive innovation in artificial general intelligence (AGI) development and policy”.
“We’re excited about what the future holds and to see the contributions our London office will make towards building and deploying safe AI,” he added.
Troubled Thames Water brings in veteran City ‘fixer’ as chair
Thursday 29 June 2023 15:49 , Daniel O'Boyle
Thames Water is to turn to a veteran City “fixer” as its new chair as it struggles to raise the funds it needs to avoid being taken over by the Government.
It is poised to appoint Sir Adrian Montague, 75, to replace Ian Marchant, who has been chair since 2018, according to The Times. Montague is chair of insurance giant Aviva but is best known for his role running the Treasury’s Private Finance Initiative Taskforce in the late 1990s.
He was also one of the architects of Network Rail, the body that took over from privatised rail infrastructure body Railtrack when it collapsed in 2001. He later went on to rescue British Energy when it got into financial trouble in 2002.
Mixed start on Wall Street
Thursday 29 June 2023 15:34 , Daniel O'Boyle
The S&P 500 is up slightly, but the Dow Jones and Nasdaq are down in a mixed start on Wall Street.
Top risers include banking giant Wells Fargo, while Intel fell in another tough day for chip makers.
Take a look at all the key market data
Yet another gilt yield surge
Thursday 29 June 2023 15:08 , Daniel O'Boyle
Gilt yields at all maturity dates surged again this afternoon, bringing the two-year gilt’s yields back towards the record highs reached yesterday.
The two-year gilt is now yielding 5.23%, having hit 5.31% yesterday before a sharp fall.
Yields for longer-dated gilts jumped too.
Take a look at all the key market data
City Voices: Tarring all cryptos with the same brush is just nonsense
Thursday 29 June 2023 14:57 , Daniel O'Boyle
Cryptocurrency ownership in the UK jumped from 2.3 million in 2021 to 4.97 million in 2022/3, amounting to almost 10% of the adult population, according to the Financial Conduct Authority (FCA).
It is clear that with a $1.2 trillion market value and with volumes trading north of $30 billion a day, crypto is not going to fade away any time soon. The regulatory chaos surrounding the crypto markets is not going away either.
Gary Gensler, chair of US regulator the Securities and Exchange Commission (SEC), has declared war on Coinbase, accusing the Nasdaq-listed company of operating illegally as an unregistered national securities exchange.
If found in breach of these laws, Coinbase faces hefty fines and the closure of its business. Not great news for a company that floated 18 months ago with a market cap of $85billion (now $13 billion).
US shares set to tick up
Thursday 29 June 2023 14:19 , Daniel O'Boyle
Shares in US companies are set to open very slightly higher today amid stronger-than-expected GDP and jobs figures, according to futures markets.
Dow Jones futures are up 0.1% to 34138. S&P 500 futures are up by three points to 4425 and Nasdaq futures are up by seven points to 15135.
US jobless claims fall unexpectedly, GDP revised up
Thursday 29 June 2023 13:49 , Daniel O'Boyle
Initial unemployment claims in the US fell to 239,000, well below the expected figure of 265,000, while first-quarter GDP growth was revised up to 2%, in the latest sign that the US appears on course for a ‘soft landing’.
It was widely believed that the world’s largest economy would not be able to bring inflation back under control without putting millions out of work and sending the economy into an extended period of stagnation or decline. Yet jobs data has repeatedly defied expectations while inflation declines.
Commenting on US Initial Jobless Claims and latest GDP figures, Ryan Brandham, Head of Global Capital Markets, North America at Validus Risk Management, said: “US initial jobless claims came in better than expected at 239k vs 265k.
“Following two elevated prints, this figure is back within more normal ranges and is a reassuring sign for the US labour market. US GDP also came in much stronger than expected and highlights the continued resilience of the US consumer despite a long rate hiking cycle over the last 18 months. Combined, this data is hawkish for US rates and bullish for the USD for today’s session, and will have traders likely consider a greater likelihood of further interest rate hikes from the Fed.”
Policymakers in the UK will hope that the British jobs market can prove similarly resilient.
Spanish inflation falls to 2% target
Thursday 29 June 2023 13:41 , Daniel O'Boyle
The UK’s status as an outlier in the fight against fast-rising prices was highlighted today, as data this morning showed inflation in Spain fell to just 1.6%.
That figure, down from 2.9%, is roughly in line with the 2% target used by central banks the world over, including the European Central Bank as welll as the Bank of England.
However, it was not a true all-clear as core inflation remains higher, at 5.9%. That suggests thhe headline figure is likely to climb back up to an above-target level again.
Inflation in the UK came to 8.7% in May, unchanged from June. That is higher than every other G20 country except Turkey and Argentina.
Market snapshot at lunchtime
Thursday 29 June 2023 13:33 , Daniel O'Boyle
Take a look at all the key market data with our graphs
City comment: The cost of nationalising Thames Water? Nothing
Thursday 29 June 2023 13:13 , Daniel O'Boyle
A view from a passerby last night. “I’ve been a customer of Thames Water for 30 years. It has got worse every single year. It is a shambles.”
Since our commentator was wearing red trousers and a green shirt, I don’t think he was from Just Stop Oil — though they also managed to get tickets to Lord’s.
That such sentiments about Thames Water are so common suggests the Government would face few political objections if it renationalises the water utility, something it may have to do regardless of ideological preference.
The Government said AI firm Cervest could ‘transform lives’ — It was weeks from collapse
Thursday 29 June 2023 12:41 , Daniel O'Boyle
Cervest, a London ‘climate intelligence’ firm hailed by the Government as one of the UK’s 10 most “exciting” AI firms just three months ago has gone bust with staff left unpaid, the Standard can reveal.
All of Cervest’s more than 100 staff have lost their jobs. Its 71 UK employees haven’t been paid since April.
The collapse of a supposed AI champion is the latest dent in a London tech sector struggling with layoffs, falling valuations and dwindling investment. In particular, it’s a blow to Rishi Sunak’s vision of making London a world-leading artificial intelligence hub, laid out at London Tech Week just days before Cervest entered administration.
Tech giant Palantir sponsors tennis star Svitolina
Thursday 29 June 2023 12:21 , Daniel O'Boyle
Software and AI giant Palantir Technologies has signed a major sponsorship deal with the highest ever ranked Ukrainian women’s tennis player Elina Svitolina.
The US company, which has its European HQ on Soho Square, has been one of the most high profile corporate backers of Ukraine’s defence efforts against the Russian invasion.
The sponsorship will support the Elina Svitolina Foundation which helps young Ukrainian tennis players and their families relocate to tennis academies elsewhere in Europe.
The 28 year old, who was ranked third in the world at the peak of her career in 2017, said: “Palantir has been a friend to Ukraine since the Russian aggression began,
“I am thankful for the work they are doing in helping my government continue its fight to peacefully exist within our own borders. Palantir is helping that cause and my decision to partner with them helps advance our humanitarian missions.”
Troubled Thames Water brings in veteran City ‘fixer’ as chair
Thursday 29 June 2023 11:47 , Daniel O'Boyle
Thames Water is to turn to a veteran City “fixer” as its new chair as it struggles to raise the funds it needs to avoid being taken over by the Government.
It is poised to appoint Sir Adrian Montague, 75, to replace Ian Marchant, who has been chair since 2018, according to The Times. Montague is chair of insurance giant Aviva but is best known for his role running the Treasury’s Private Finance Initiative Taskforce in the late 1990s.
He was also one of the architects of Network Rail, the body that took over from privatised rail infrastructure body Railtrack when it collapsed in 2001. He later went on to rescue British Energy when it got into financial trouble in 2002.
Decline in mortgage approvals still to come
Thursday 29 June 2023 11:36 , Daniel O'Boyle
Mortgage approvals rose in May to 50,500, today’s Bank of England data showed, but the period only covers the very beginning of the latest round of mortgage mayhem.
Ranald Mitchell director of independent mortgage broker, Charwin Private Clients said things could be very different in June.
He said: “Mortgage approvals for house purchases may have increased slightly in May but we have definitely seen signs of a slowdown in June. There may be seasonality in this but the more likely cause is consumer confidence being hit for six by all the base rate increases. First-time buyers will be worst affected as their confidence is shaken but there are plenty of experienced landlords and cash investors out there ready to snap up the right opportunities.
Squeezed households raid bank and building society accounts by record £4.6bn
Thursday 29 June 2023 11:00 , Daniel O'Boyle
Under-pressure households raided their accounts in May, withdrawing a record £4.6 billion from banks and building societies.
The net withdrawal figure was the highest figure since monthly records started in October 1997, according to the Bank of England’s Money and Credit report.
This was a sharp contraction compared with net deposits of £3.7 billion flowing into bank and building society accounts in April.
Serco and Morgan Sindall shares rally, De La Rue rebounds
Thursday 29 June 2023 10:23 , Graeme Evans
Serco shares jumped 10% or 15p to 157.3p after the FTSE 250-listed outsourcer forecast annual revenues £200 million higher than originally expected at £4.8 billion or more.
Demand for its immigration and defence services fuelled the upgrade, with Serco now guiding towards underlying profits £10 million stronger at £245 million.
Today’s rally returns Serco’s valuation to where it was in March, although brokers Liberum and Peel Hunt reckon the shares should be at 200p or higher.
Morgan Sindall provided the other mid-cap highlight as the construction and fit-out business rose 3% or 48p to 1788p on the back of incresaed full-year profit guidance.
Elsewhere, the stock market mood wasn’t helped by Federal Reserve chair Jerome Powell’s warning yesterday that at least two more US interest rate rises are on the table.
The FTSE 100 index drifted by 8.25 points to 7492.24 and the UK-focused FTSE 250 index fell 86.87 points to 18,325.94.
In the FTSE All-Share, De La Rue rallied 3.5p to 40p amid relief that the bank notes and ID security products business had delivered on guidance in April’s profit warning.
A downturn in activity as central banks used stocks built up during the Covid pandemic contributed to an annual loss of £29.6 million, but there are now “encouraging signs” that the currency market is in recovery.
Chief executive Cilve Vacher added that 2023 results no longer included a 'material uncertainty' line over De La Rue as a going concern. “This gives us a stable platform for future trading,” he said.
Bank of England stats show huge ‘mortgage time bomb'
Thursday 29 June 2023 10:20 , Daniel O'Boyle
The scale of the ‘time bomb’ set to detonate on the property market became clear today, as new data showed an alarming difference between interest rates currently being paid by mortgage holders and those that will be paid when fixed deals expire.
Statistics from the Bank of England show the average rate on outstanding mortgages grew to 2.82% in May. But that was still nowhere near the typical rates for a new deal.
Latest data from financial analysts Moneyfacts showed the average rate on a two-year fixed loan rising from 6.3% to 6.37%. The average fixed rate on a five-year deal was up from 5.91% to 5.94%.
EssilorLuxottica to make Jimmy Choo sunglasses
Thursday 29 June 2023 09:31 , Daniel O'Boyle
Glasses and sunglasses maker EssilorLuxottica today announced a deal with Jimmy Choo that will allow it to license, make and sell eyewear for the iconic shoe brand.
The deal is the latest sign of a growing focus on accessories for Jimmy Choo. Sales of items like glasses and bags jumped 20% last year as the fashion house aims to complement its shoes that have been modelled by superstars like Kendal Jenner and Gisele Bündchen.
Francesco Milleri, chairman and CEO of EssilorLuxottica said: “We are excited to embark on this new journey with Jimmy Choo, a pioneer in the art of celebrity styling and the global luxury business.”
Jimmy Choo-branded glasses and sunglasses are currently made and sold by Safilo, but that deal expires at the end of the year. The sunglasses sell for up to £369.
Key market data as FTSE 100 opens close to flat
Thursday 29 June 2023 08:39 , Daniel O'Boyle
Take a look at today’s market snapshot as the FTSE 100 ticked slightly downwards.
Two-year mortgage prices jump againn
Thursday 29 June 2023 08:37 , Daniel O'Boyle
The average two-year fixed mortgage rate jumped to 6.37% today, while five-year fixes got ever-closer to 6%.
Stats from Moneyfacts show that two-year fixed rates were up from 6.30%. Five-year rates rose from 5.91% to 5.94%.
The number of products on the market ticked slightly up to 4,430. But that’s still more than 600 less than in late May, suggesting that the upward march in prices is not finished.
Yesterday, a number of top lenders including Halifax and HSBC raised their prices.
FTSE 100 flat after Fed guidance, Serco shares jump 6%
Thursday 29 June 2023 08:23 , Graeme Evans
Federal Reserve chair Jerome Powell’s warning that at least two more US interest rate rises are on the table continued to limit the progress of European markets today.
The FTSE 100 index was broadly unchanged at 7500, mirroring Wall Street’s reaction to the comments of the Fed boss at yesterday’s ECB conference.
His guidance raised the prospect of rate rises in July and September, with Powell’s caution about how long it will take for inflation to fall back towards 2% also clouding the longer term picture for rate cuts.
In London’s top flight, B&M lost 3% or 17.4p to 573.2p as investors used the discount retailer’s latest sales update as the moment to consolidate a 20% rise this month.
The stock also began trading without its latest dividend award, the same factor that meant Burberry shares fell 58p to 2080p.
Top performers in the FTSE 250 included outsourcing giant Serco, which jumped 6% or 8.9p to 151.2p after its latest upgrade to guidance.
There was also a rise of 5% or 86.5p to 1826.5p for Morgan Sindall as the construction and fit-out group raised full-year expectations. The FTSE 250 stood 27.18 points lower at 18,385.63.
Direct Line says review of five year’s worth of claims will not hit its finances
Thursday 29 June 2023 07:53 , Michael Hunter
FTSE 250 insurer Direct Line said today that there will be “no material impact” to its finances from a watchdog-mandated review of five year’s worth of payouts.
The Financial Conduct Authority told the company to take the action covering vehicles which were written off between September 2017 and mid-August 2022 to find underpaid claimants.
A string of profit warnings at the firm led to the departure of its CEO, Penny James, in January. It said today that it “does not expect the review to have a material financial impact in 2023” on its financial performance.
Scandal-hit Wandisco reveals sales growth slowed in ‘wasted’ 2022
Thursday 29 June 2023 07:53 , Daniel O'Boyle
Scandal-hit Wandisco has published unaudited financial results for what its boss called a “wasted year”, after the firm discovered that almost all its profits were fraudulent.
The firm was once seen as a champion of UK tech and had set its sights on moving its listing to the US. But just days later, it announced its shares would be suspended as it investigated “potentially fraudulent” activity. It eventually discovered that bookings had been overstated by almost $115 million.
Today, Wandisco revealed that its losses grew to $30.3 million as sales growth slowed. Interim CEO Stephen Kelly said the firm believed it had “passed an inflexion point” and that there was “complacency” in sales because the firm thought it had secured a large number of lucrative contracts.
He said: “What I can say is that 2022 in many respects turned out to be a wasted year. Having got off to a bad start, FY23 will be different. I am determined that it will serve as a real transition year towards a sustainable, growth-focused future for our business.”
Tinybuild blames distribution platforms in profit warning
Thursday 29 June 2023 07:42 , Daniel O'Boyle
Video game maker Tinybuild’s CFO has stepped down “for personal reasons” as the developer warned its profits will be lower than expected.
The company said that distribution platforms were increasingly focusing their effort on promoting AAA games, the biggest and most expensive releases in the industry, leaving little room for games made by independent studios like TinyBuild.
“As witnessed across the industry, distribution platforms have been significantly downsizing the amount of investments in non-AAA games. Platform deals have been an important driver of tinyBuild’s growth and profitability over the past few years, and the Board expects this downward trend to materially impact revenues.”
The firm now expects to have between $10 million and $20 million left in cash at the end of the year, down from the previously expected $26.5 million.
Alex Nichiporchik (pictured), chief executive officer of tinyBuild, said: “As CEO and a major shareholder, I am disappointed with the H1 performance. What fills me with confidence is that we have an incredibly strong pipeline of new games under development with the potential to create multiple new long-lasting franchises.
“Our diverse portfolio, strong back catalogue and financial position will allow us to reposition the Company for growth and capture advantageous opportunities when peers may be forced to retrench. We are transforming the Company at speed to adapt to new industry trends.”
Finance boss Tony Assenza announced his resignation, to be replaced by Jaz Salati.
B&M UK revenue tops £1bn in first quarter
Thursday 29 June 2023 07:28 , Daniel O'Boyle
B&M UK revenue exceeded £1 billion for the three months to 26 June, up 9.2%, as the discount retailer’s boss hailed the firm’s “relentless focus on price, product and excellence in retail standards”.
Overall revenue for the group, which also includes Heron Foods and the French B&M business, was up 13.2% to £1.3 billion.
Alex Russo, Chief Executive, said: “Our strong trading momentum demonstrates the strength of our unchanged strategy to relentlessly focus on price, product and excellence in retail standards. The business is well positioned as we start to transition to our autumn winter season. We will continue to work hard to help all our customers manage the cost-of-living crisis.”
Apple nears $3 trillion as US banks pass stress tests, FTSE 100 flat
Thursday 29 June 2023 07:26 , Graeme Evans
Apple’s valuation is on the brink of $3 trillion after shares in the iPhone giant closed at a fresh record high last night.
The 0.6% rise to $189.25 took the world’s most valuable company to $2.98 trillion, with after hours dealings suggesting the threshold could be broken today.
The shares are up more than 45% this year as hopes that the US is near the peak for interest rates fuels demand for a host of Wall Street technology stocks. Apple’s momentum also reflects its better-than-expected performance in results posted last month.
The tech-focused Nasdaq finished in positive territory last night to stand 30% higher this year, in contrast to the 2% rise for the Dow Jones Industrial Average after a small loss yesterday.
Shares in JP Morgan, Bank of America and Goldman Sachs were 1% higher in after-hours trading as it emerged the banking heavyweights had passed the Federal Reserve’s annual stress test.
On Asia markets, the Hang Seng has fallen 1.3% whereas the Nikkei is marginally higher after yesterday’s dovish comments from the Bank of Japan governor put further downward pressure on the yen.
CMC Markets expects the FTSE 100 index to open two points higher at 7502, having closed up 0.5% or 39 points in yesterday’s session.
Yesterday’s top stories
Thursday 29 June 2023 06:50 , Daniel O'Boyle
Good morning. Here is a selection of yesterday’s top stories:
The Government is reportedly drawing up plans to put London water supplier Thames Water into special administration, amid fears that it could collapse
Halifax, HSBC. Nationwide and TSB all raised the interest rates for their fixed-rate mortgages yet again, as trhe average five-year fix approaches 6%
Shares in Revolution Beauty jumped after they were freed from suspension, despite an escalation in the make-up retailer’s dispute with top shareholder Boohoo
Today, we’re expecting results or updates from:
B&M
Hunting
Serco
H&M
De La Rue
Moonpig
