Yahoo Finance FTSE 100 Live: Share rally fades, City IPO warning, strong pound hits Burberry bottom line
Burberry has revealed a strong start to its financial year as the luxury goods group sees a surge in demand from Chinese consumers.
Other corporate developments include broadcaster ITV’s decision to drop plans to buy Gogglebox maker All3Media.
Wall Street’s results season also gets underway, with JP Morgan and Citigroup among those reporting second quarter figures.
FTSE 100 Live Friday
Burberry sales boosted by China recovery
JP Morgan launches Q2 results season
Zoo Digital shares plunge on writers strike
FTSE 100 closes flat as rally fades
16:35 , Daniel O'Boyle
The FTSE 100 closed flat today at 7,434.57 as a rally faded as US markets opened.
The index of London blue-chips hit a high of 7480, having all but erased the losses of recent weeks. But when trading began in Wall Street, London shares fell, leading the FSTE to close five points below where it started.
Top risers included Spirax-Sarco and LSEG. Croda and the ever-volatile Ocado were among the biggest fallers.
Arsenal star Jorginho blasts ‘wasteful’ spending of teammates as he reveals investment in trading app Gather
16:02 , Daniel O'Boyle
When he’s off the pitch, 31 year-old Arsenal player Jorginho spends time sitting down with his younger teammates, quizzing them on their long-term plans.
“I ask them what their projects are, are they investing into financial markets or into property,” the midfielder tells the Standard.
“But then sometimes at training I see them pull up with one car, and then next week another car and then a month later another car, and I go up to that player and ask him, ‘Why are you putting all your money into cars? What are you going to do after football? How long is the money going to last?”
William Hill owner 888 warns its licence could be at stake as watchdog probes new investors
15:09 , Daniel O'Boyle
Shares in WIlliam Hill owner 888 plunged as the gambling watchdog launched another review into the firm, which it warned could lead to its British gambling licence being revoked, over the involvement of ousted Entain boss Kenny Alexander after he led a group that bought a stake in the firm.
FS Gaming, a group led by Alexander and involving a number of other former Entain executives, took a stake in 888 in June, prompting the William Hill owner’s share price to surge. FS reportedly aimed to place Alexander in the CEO’s seat at 888, which had been empty since Itai Pazner left in January as it launched an internal investigation into the firm’s money laundering checks for Middle Eastern high-rollers. 888 confirmed today that FS had presented such a plan to its board.
Alexander built a small gambling business named GVC into the multi-billion-pound firm that is now known as Entain, purchasing household names like Ladbrokes and Coral as well as “local heroes” abroad. He is widely seen as one of the most influential executives in modern gambling, and investors hoped his involvement would spark a turnaround for 888.
JPMorgan Chase revenue at record $41.3 billion in Q2
13:53 , Daniel O'Boyle
US banking behemoth JPMorgan Chase brought in $41.3 billio in revenue for the three months to 30 June, a record for the firm.
The total included $21.8 billion in net interest income, plus a gain of $2.7 billion on the emergency purchase of First Republic Bank.
CEO Jamie Dimon said: “The US economy continues to be resilient. Consumer balance sheets remain healthy and consumers are spending, albeit more slowly.”
Other top banks including Wells Fargo and Citigroup will also report results today.
MPs to grill top City firms on sexism in finance sector
13:31 , Daniel O'Boyle
MPs are set to grill top City firms on their lacklustre efforts towards gender equality, launching a new inquiry into sexism in the UK finance sector.
The committee is today calling for evidence “on the barriers faced by women in financial services”.
Among the topics to be covered will be the gender pay gap, sexual harassment and the roles of the Government and regulators in acting as “gender equality role models”.
City voices: Brands investing in Britain deserve London at its most competitive
12:39 , Daniel O'Boyle
“The West End is back,” Dee Corsi writes.
“The arrival of the Elizabeth Line, recent Pride celebrations and sunshine are just some of the factors which have stabilised footfall and brought much needed certainty back for retailers.
“It is an environment ripe for growth, and the district has done well, post-pandemic, to remain on track for a £10 billion turnover by 2025.
“But with the ‘tourist tax’ acting as an effective handbrake on momentum, reaching our full growth potential remains just out of reach.”
Market snapshot as FTSE 100 edges up
12:23 , Daniel O'Boyle
The FTSE 100 has started to creep up after its steady start to the day. Take a look at all the key data in our market snapshot,
Dealmaking dearth and UK stock slowdown stokes fears over the City
11:51 , Daniel O'Boyle
A desolate report into flotations and a plunge in assets at a brace of big-name funds rang alarm bells across the City today over the dearth of dealmaking and stagnating demand for UK stocks.
London slumped to third place in the league table for initial public offerings in Europe – falling behind Istanbul and Milan – according to rankings compiled by PwC, the global accounting giant.
IPOs are a vital part of the City’s ecosystem, with jobs at its range of law firms and banks depending on them. PwC found that London’s seven flotations raised £561 million in the first half of 2023. That put it in third place. The overall leader was Istanbul, where 21 IPOs raised the equivalent of £1 billion. Milan’s Borsa Italiana, was second, with £940 million raised by 9 IPOs.
Wembley events a winner for London designer outlet
11:09 , Maya Richards
The London Designer Outlet (LDO) today revealed a first half sales jump, as buyers sought bargains and Wembley Stadium events such as the Harry Styles concert attracted more visitors to the area.
The shopping centre, owned by developer Quintain, experienced footfall rises on the days when the popstar performed and when the FA Cup final between Manchester City and Manchester United took place.
That helped contribute to the best sales performance of any first and second quarter in the LDO’s ten-year history.
Total sales in the six month to June rose 10.5% from last year, and there was an increase of 3.4% compared to 2019.
Brands at the outlet include Tommy Hilfiger and Calvin Klein. General manager Daniel Tomkinson said: “With cost-of-living pressures on families, our customers are finding the benefit of outlet shopping in making their money go further.”
Chaos for holidaymakers as 950 Gatwick staff to strike for eight days
10:49 , Daniel O'Boyle
Almost 1,000 workers at Gatwick Airport including baggage handlers and check-in staff will stage eight days of strikes beginning later this month, a union announced on Friday.
Unite said the action would inevitably disrupt flights at the height of the summer holiday season.
It is set to bring further chaos for passengers, after budget airline easyJet this week cancelled around 1,700 summer flights, primarily to and from Gatwick.
McBride shares jump on profits upgrade, AstraZeneca higher
10:15 , Graeme Evans
Demand for own-label products as households make savings in the cost of living crisis helped McBride shares jump by a fifth today.
The supplier of cleaning and hygiene products to many of Europe’s major supermarkets reported a 12.7% jump in quarterly volumes and said operating profits for the June financial year will be materially ahead of City forecasts.
The shares rallied by 5.8p to 31.8p, but the stock is still only a third of where it was in 2021 as its own performance has been squeezed by inflation pressures.
Some of these costs are now starting to ease, with analysts at Peel Hunt sufficiently encouraged by today’s update to move their recommendation to “add”.
The strong update provided one of the highlights in a session when the views of City brokers prompted some interesting share price moves.
The most significant came in the pharmaceuticals sector after HSBC swung behind AstraZeneca but gave rival GSK a “reduce” rating.
Astra shares rose 142p to 10,472p in reaction to the City firm’s target price of 13,250p, whereas GSK was unchanged at 1330p.
Vodafone was also in the spotlight, having recently seen its valuation fall to a three decade low. The stock today rallied a penny to 73p as Deutsche Bank kept its “buy” stance and gave the mobile phone giant a lower but still robust price target of 155p.
The only stock above Voda in the FTSE 100 was engineering firm Spirax-Sarco, which was marked 3% or 265p higher at 10,405p.
Despite the upgrades for heavyweight stocks such as Astra, the FTSE 100 index only managed a rise of 11.29 points to 7,451.50 as investors appeared content to consolidate the big rise of 1.8% seen on Wednesday.
The FTSE 250 index dipped 51.13 points to 18,580.58, with emerging markets fund manager Ashmore the biggest faller.
Its shares fell 7% or 14.8p to 202p after reporting a 3% drop in assets under management for the June quarter. Chief executive Mark Coombs said: "There remains some global macro uncertainty and certain investors have therefore reduced risk during the quarter.”
City comment: Don’t be so afraid of the long-term debt apocalypse
10:11 , Daniel O'Boyle
‘Apocolypse Later’ says the Office for Budget Responsibility, which offers some truly scary forecasts.
Now, predicting is difficult, especially for the future. And the track record of economists is like mine for the 3.30 at Ascot, but still, brace yourself.
Debt is on an unsustainable path and the public finances are in a “very risky” condition.
The Works pushes back results over audit delays
10:04 , Daniel O'Boyle
Discount retailer The Works pushed back the publication of its financial results today, as auditors at KPMG asked for more time to review the accounts months after being fined for failings in its audit of The Works’ 2020 results.
Results were initially set to be published on 21 July, but have now been pushed back 12 days to 2 August.
The Works, which has 525 shops across the UK and Ireland, said the delay is related to KPMG taking longer to complete “standard audit procedures”, rather than flagging question marks in its accounts. It still expects adjusted earnings of £9 million, as it forecasted in May, but did not mention any other figures.
In April, City watchdog the FCA fined KPMG £1 million over its audit of the Works’ 2020 accounts. It said the failings, related to how the retailer’s inventory was counted, “were rudimentary and should not have occurred”. The fine would have been £1.7 million if not for the accountancy giant cooperating with the investigation.
Shares in The Works are up 0.9p, or 2.9%, to 33.9p today.
Zoo Digital shares plunge on writers strike and streaming cuts
09:47 , Daniel O'Boyle
Shares in subtitling firm Zoo Digital dived today as streaming cuts and the US writers’ strike mean the business now expects an even faster fall in revenue than previously thought.
Zoo said that “two short-term factors” had hit revenue “in a quarter that the Board already expected to be weaker than the previous year”.
First, streaming giants have drastically cut costs, cancelling programmes and removing existing works from their catalogues. Netflix alone plans to cut $300 million in costs this year.
At the same time, the Writers Guild of America’s strike “is now having an impact on the levels of localisation and media services work on new titles”.
However, Zoo insisted that it will remain in a strong position going forward as top streaming firms will reduce the number of suppliers in order to cut costs, “with Zoo selected as one of a smaller number of vendors”. As a result, it expects to return to revenue growth in the second half of the year.
Shares are down 30.5p, or 29%, to 74p. They are down 60% for the year.
Residential mortgage prices keep climbing, but two-year buy-to-let rates decline
08:56 , Daniel O'Boyle
Mortgage rates for homeowners climbed further today, but there was an easing in two-year buy-to-let rates.
According to Moneyfacts, the average 2-year fixed residential mortgage rate today is now 6.78%, up from 6.78% yesterday. The average five-year fixed-rate deal now brings a 6.30% interst rate, up from 6.27%.
Two-year buy-to-let rates eased though, falling back to 6.93% after rocketeding to 6.97% in recent days.
The number of products on the market declined again, to a new five-month low.
Contrasting fortunes for pharma stocks, Ashmore down 6%
08:41 , Graeme Evans
The FTSE 100 index is barely changed at 7440.16, having risen 1.8% on Wednesday and a more modest 24 points yesterday.
Engineering firm Spirax-Sarco is the best performing blue-chip after being marked 220p higher at 10,360p, while struggling Vodafone shares also improved 0.7p to 72.6p.
Deutsche Bank downgraded the mobile phone giant, but kept its “buy” recommendation and still sees a big upside to 155p.
A note on the pharmaceuticals sector by HSBC meant AstraZeneca shares rose 132p to 10,462p based on a target price of 13,250p. In contrast, GSK was unchanged at 1330p after the City bank gave the firm a “reduce” rating and 1190p target.
The FTSE 250 index dipped 55.43 points to 18,576.28, led by emerging markets fund manager Ashmore after it reported a 3% drop in assets under management for the June quarter. Shares fell 6% or 13.8p to 203p.
Market snapshot as FTSE opens flat
08:23 , Daniel O'Boyle
Take a look at the key market data as the FTSE 100 is steady upon opening.
JP Morgan results to give insight on US economy
07:50 , Graeme Evans
JP Morgan is regarded as a bellwether for the US economy, meaning the comments of chair and chief executive Jamie Dimon will be as significant as the banking giant’s second quarter results later today.
The figures should show a big jump in revenues and earnings as the impact of sharply higher interest rates outweighs the subdued climate for dealmaking.
The last time Dimon reported results in April he said the US economy continued to be on “generally healthy footings”, with consumers still spending and their balance sheets strong.
On the regional banking turmoil during March, he said the situation was distinct from the 2008 financial crisis as it involved far fewer financial players and fewer issues that needed to be resolved.
However, he predicted that financial conditions were likely to tighten as lenders become more conservative, “and we do not know if this will slow consumer spending”.
Tourist surge to boost Johnson Service Group profits beyond expectations
07:48 , Daniel O'Boyle
Hotel linen provider Johnson Service Group expects to beat market expectations for profit this year thanks to a surge in tourist volume over the coming months.
For the first six months of the year, JSG reported revenue of £215 million, up 22.2%, with £144 million coming from its hotel linens arm and the remainder from workwear.
It said hotel linens volumes have “continued to build” in recent weeks, with encouraging signs of more sales on the way.
At the same time, it has agreed fixed prices for most of its gas and electricity costs, reducing the uncertainty that inflation had created.
“This more predictable cost base, together with current anticipated volume over the busy summer months, gives us confidence that, assuming the trading environment remains unchanged, we will report full year adjusted operating profit slightly ahead of current market expectations,” the group said.
Sales jump at Burberry after huge recovery in Chinese market
07:27 , Simon Hunt
Retail sales at fashion retailer Burberry rose 17% in the three months to the end of June after a big bounceback in the Chinese market.
The luxury fashion brand, known for its iconic Check coats, said sales in mainland China had risen by 46% as it confirmed its full-year guidance.
But the firm warned it expected to take a £150 million knock to revenues from currency fluctuations, as the pound rose to its highest level in 15 months.
Burberry said: “All regions outside of the Americas saw growth with Mainland China recovering from COVID-19 related lockdowns in the previous year.”
Dollar weakness continues, FTSE 100 set for subdued session
07:26 , Graeme Evans
The views of JPMorgan, Citigroup and Wells Fargo on the health of the US economy will be in focus when Wall Street’s earnings season gets going later today.
In the run up to this afternoon’s second quarter results, US markets have been on a four-day winning streak as hopes build for an imminent pause in interest rate rises.
At the end of yesterday’s session, the S&P 500 index rose 0.85% and the Nasdaq Composite by 1.6% as technology stocks extended their strong run.
The weakness of the US dollar also continued amid this week’s evidence of softening US inflation pressures. The dollar index against six major currencies remains at a 15-month low, while sterling is above $1.31 for the first time since April 2022.
Asia shares this morning posted a mixed performance while CMC Markets expects the FTSE 100 index to open 12 points lower at 7428 after closing 24 points higher yesterday.
Recap: Yesterday’s top stories
06:49 , Simon Hunt
Good morning. Here’s a summary of our top stories from Thursday:
The pound hit a 15-month high of $1.30 after UK GDP contracted by 0.1% in May.
The former boss of bankrupt crypto lender Celsius was charged with fraud by US authorities following an investigation into the company’s collapse.
The Office for Budget Responsibility has warned the state of the UK’s public finances are now in a very risky position after a string of economic shocks.
The estimated value of homes in London owned by foreign buyers now stands at £55 billion, research finds.
