Oil prices have remained near to a six-month low, despite Friday’s US jobs report easing fears about an imminent global recession.
The US economy added 528,000 jobs last month, a figure more than double Wall Street estimates. Brent crude, which fell by 9% last week to its lowest level in almost six months, has remained near to $95 a barrel.
Expectations that the US Federal Reserve will need another big interest rate rise in September to control rising prices boosted the dollar, with attention now focused on July’s inflation reading due on Wednesday.
FTSE 100 Live Monday
Markets hold firm after robust US jobs report
Joules shares jump 50% on Next investment plan
Tech stocks leap but oil remains low: US markets open
Monday 8 August 2022 15:03 , Simon Hunt
Stock’s made gains in the opening minutes of trading on Wall Street after robust US jobs numbers released on Friday placated investor concerns that a recession was imminent.
US tech giants led the gains with the likes of Amazon and Apple up 2% and 1.3% respectively, while US Treasury yields pulled back.
Oil prices remained near multi-month lows going into Monday afternoon amid continued fears about a drop-off in demand as countries brace for the prospect of an economic downturn.
Bordeaux Index rises as investors take to fine wine and whisky
Monday 8 August 2022 14:32 , Simon Hunt
Consumers and wealthy collectors are lining up to beat the global economic squeeze by investing in fine wines and single malts as inflationary pressures take their toll.
Wine merchant Bordeaux Index upped sales by 37% in the first half of the year as group revenues reached £80 million to the end of June.
Bordeaux Index’s online trading platform LiveTrade contributed to growth, with trading by value up 55% as “wealthy collectors” added more wine and spirits to their portfolios.
Sales of champagne and Italian wines on the platform rose 80% and 60% respectively. Bordeaux Index founder and boss Gary Boom said “interest in wine and whisky as asset classes has never been higher”.
Veolia confirms £2bn sell-off of waste giant Suez to Macquarie
Monday 8 August 2022 14:09 , Simon Hunt
The fate of the UK operations of waste management giant Suez was decided today after French utility business Veolia confirmed it would sell the unit to Australian investors Macquarie in a £2 billion deal.
The announcement is seen as a bid to placate concerns raised by the Competition and Markets Authority over the £11.2 billion merger of Veolia and Suez announced last year.
In a statement in June Veolia said: “This drastic decision is an effective response to the intransigence of the CMA. Veolia strongly disagrees with their analysis of the concerned markets and deplores the lack of shared understanding of the issues related to our sectors of activity.”
Veolia shares rose 2% in Paris.
Fleet supply shortages buoy Clarkson
Monday 8 August 2022 13:38 , Simon Hunt
Shipbroker Clarkson today said it was being boosted from a “supply shortage in the global shipping fleet” as many international ports face long periods of inaction from conflict, economic instability and coronavirus.
The firm said trading across the sector had slowed due to a rise in “macro-economic headwinds” and “inflation pressures”, but that its “international footprint” and market position had let it to benefit from the changes.
In the first half of the year, revenue grew to £266.7 million from £190.1 million from the previous year. It also steered a pre-tax profit of £42.2 million during the period, up from £27.5 million, an increase of 53.5%.
Underlying earnings per share increased by 54.5% to 98.9p, compared with 64p in 2021.
CEO Andi Case said the business would continue to benefit from its “international footprint, leading market position, diverse offering and a deep understanding of the energy transition”.
Page turns up first signs of red hot jobs market slowing down
Monday 8 August 2022 12:19 , Simon Hunt
Recruitment group Page today flagged up the first signs of a cooling in the red hot jobs market with a slight slowing in the time taken to hire personnel in some of its markets
CEO Steve Ingham said: “In July, we noted a slight slowing in time to hire in some of our markets, and we continue to closely monitor our forward-looking key-performance indicators.
“Looking forward, we recognise the heightened degree of global macro-economic and geo-political uncertainty, particularly with regards to increasing inflation around the world,” he added.
However, the FTSE 250 firm reported a record £538.9 million in gross profit for the six months to June 30, up by a third while pre-tax profit was up 80% to £114.5m. Page said it “continued to benefit from favourable trading conditions, including wage inflation and increased fee rates resulting from the high demand and short supply of candidates”.
It helped the company lift its interim dividend to shareholders to £15.6 million, a 4.5% rise to 4.91p per share. It also said it would pay a special dividend of 26.7p per share, totalling £84.9 million. It stood by its existing profit guidance for the full year.
Shares were down almost 6% at 425p in early trading in London.
SoftBank posts record £19bn loss as tech investments flop
Monday 8 August 2022 11:45 , Simon Hunt
Japanese technology investment firm SoftBank posted a staggering
$23 billion (£19 billion) net loss this morning, the largest in the company’s history as it became the latest victim of inflation and global recession fears.
The results add further pain on top of the
$26 billion loss its Vision Fund posted in May. The firm’s Vision Fund 2 spent £40 billion investing in 269 firms now only worth a combined £31 billion.
The company said the loss reflected “growing concerns over economic recession driven by inflation and rising interest rates.”
The Nasdaq-100 index of US-listed technology companies has dropped 24% since January.
SoftBank CEO Masayoshi Son admitted it had invested in too many start-ups with valuations in a bubble. “The world is in great confusion,” he said at a results briefing.
It is not the first time the company has had to write down the value of its investments. It lost more than £1 billion from its stake in failed supply chain finance business Greensill that once had David Cameron as an adviser, as well as around £750 million on its holding in bust German payments business Wirecard.
FTSE 100 higher, Joules surges on Next talks
Monday 8 August 2022 10:17 , Graeme Evans
Shares in lifestyle brand Joules surged today as investors welcomed a potential £15 million investment from retail giant Next.
Joules, whose valuation has slumped this year as it grapples with rising costs, supply chain challenges and weaker consumer demand, confirmed talks over an investment that would result in Next becoming a strategic minority shareholder.
The potential partnership would also see Joules gain access to Next’s Total Platform system, which enables third party retailers to grow their sales without large capital costs.
The AIM-listed shares jumped more than 50%, up 17p to 50p after Joules issued a statement responding to weekend speculation. Next shares edged up 6p to 6450p.
AJ Bell financial analyst Danni Hewson said: “Next doesn’t typically buy companies outright so it seems unlikely that an initial investment in Joules will lead to a full takeover.
“Instead, expect to see it become an influential shareholder and for more of Joules’ products to appear on Next’s website.”
Elsewhere, investors were focused on a potential major deal in the mining sector after former FTSE 100-listed stock BHP revealed a £5 billion approach to Sydney-based Oz Minerals.
The move has the potential to add more copper and nickel to BHP’s portfolio, but its hopes of success have been dealt a blow after the Oz board rejected the interest.
BHP shares were 16p lower at 2230.5p in a session when mining stocks were generally higher on the back of China’s better-than-expected export figures.
Friday’s bumper US jobs report also helped lift the demand outlook, given that the world’s largest economy added 528,000 jobs last month compared with the forecast 250,000.
The FTSE 100 index maintained its recent momentum by adding another 28.34 points to 7468.08. Investment platform Hargreaves Lansdown led the risers board as shares improved by another 7% or 66.2p to 952p, having added 5% following results on Friday.
The UK-focused FTSE 250 added 27.47 points to 20,078.95, with defence technology firm Qinetiq among the risers following Friday evening’s £483 million deal to buy US-based cyber, data analytics and software development firm Avantus Federal.
Chief executive Steve Wadey called the proposed acquisition an “important step” in Qinetiq’s five-year plan to expand its presence in the world’s largest security and defence market. Shares rose 4.6p to 380.6p.
FTSE 100 higher, Hargreaves Lansdown up 6%
Monday 8 August 2022 08:53 , Graeme Evans
European stock markets have opened the week on the front foot, with the FTSE 100 index up 0.4% or 30.95 points to 7470.69.
Investment platform Hargreaves Lansdown led the risers board as shares improved by another 6% or 54p to 940.2p, having added 5% following results on Friday.
Mining stocks including Anglo American and Antofagasta rallied by 2% after sentiment was boosted by a stronger-than-expected jobs report in the United States and robust exports data from China.
The FTSE 250 cheered 59.41 points to 20,110.89, with defence technology firm Qinetiq among the risers following Friday evening’s £483 million deal to buy US-based cyber, data analytics and software development firm Avantus Federal.
Chief executive Steve Wadey called the acquisition an “important step” in Qinetiq’s five-year plan to expand its presence in the world’s largest security and defence market.
Jobs report lifts dollar, inflation in focus
Monday 8 August 2022 08:00 , Graeme Evans
Expectations for another big hike in US interest rates were fuelled on Friday following a surprisingly strong non-farm payrolls report.
The addition of 528,000 jobs was double the 260,000 forecast and helped to push back against claims that the US economy is already in recession.
But it also served to reinforce Wall Street speculation that the Federal Reserve is poised to hike interest rates by another 75 basis points in September.
The dollar, which has weakened recently on hopes that the Fed is ready to soften its monetary policy approach, has firmed to leave sterling back below $1.21.
US inflation is at 9.1%, with Wednesday’s reading for July likely to be a key factor in determining the next stage of the Fed’s approach.
Futures trading points to a slightly weaker session on Wall Street later, while CMC Markets has forecast that the FTSE 100 index will open 10 points higher at 7458.