Yahoo Finance FTSE 100 Live: Amazon shares plunge, gas prices plummet 60%, Euro dips
The European Central Bank has confirmed that it will raise interest rates by a bumper 0.75%. The Euro once again lost parity with the dollar, falling 1% to $0.99.
Lloyds, the UK’s biggest mortgage lender, reported a 17% decline in third quarter underlying profits to £1.73 billion as it increased bad debt provisions compared with a year earlier.
Shell’s adjusted earnings figure of $9.45 billion (£8.1 billion) was more than double a year earlier but down 18% on the previous quarter.
Average gas price decreased by 60% in the week to 23 October 2022, according to economic activity data published by the ONS. However, prices remain 152% above the level of the pre-coronavirus baseline in February 2020, the ONS said.
FTSE 100 Live Thursday
Lloyds reveals £668m bad debts provision
Shell reveals more bumper shareholder returns
Shares in Meta Platforms dive after Q3 results
Amazon shares plunge 19% after profit forecasts fall short
Thursday 27 October 2022 22:00 , Simon Hunt
Shares in Amazon plunged 19% in after-hours trading after the tech giant said profits were set to dip amid increased labour and delivery expenses.
The firm has forecast fourth-quarter net sales of between $140 billion and $148 billion, significantly below analyst expectations of $155 billion according to Refinitiv data.
Net sales for the third quarter of $127 billion also came in slightly lower than the market consensus.
Matt Britzman, Equity Analyst at Hargreaves Lansdown, said: “Q3 results for Amazon disappointed largely across the board, with the biggest worry for investors likely coming from the guidance for the fourth quarter, traditionally the most important period of the year for e-commerce.
‘The core e-commerce business has come under pressure from changing shopping habits from the boom seen over the pandemic and a consumer with less disposable income. Clearly, Amazon went too big too soon on its expansion plans and it’s had to put the brakes on and then some to try and get costs back under control.’
Euro loses parity with dollar again after ECB conference
Thursday 27 October 2022 17:38 , Simon Hunt
The Euro once again lost parity with the dollar, falling 1% after the European Central Bank raised interest rates and ECB chief Christine Lagarde sounded the alarm on the health of the European economy.
Matthew Ryan, Head of Market Strategy at global financial services firm Ebury, said: “ Lagarde’s press conference was once again rather pessimistic, saying that the economy is expected to slow down substantially during the rest of the year. She did, however, warn that risks to inflation remain on the upside, and we think that bringing down inflation will remain the bank’s number one priority above all else.
“Perhaps the biggest change in the communications was the removal of the phrase ‘next several meetings’, in favour of noting that rates would need to be raised ‘further’. This dovish tweak looks to be largely behind the sell-off in the common currency, which fell back below parity on the US dollar in the immediate aftermath of the announcement.”
FTSE 100 closes up 17 points to 7,073: Evening wrap
Thursday 27 October 2022 16:50 , Simon Hunt
The FTSE 100 finished up 17 points to 7,073 today, led by energy stocks whichrose 4.73% on the back of earnings figures from Shell, which sent its shares up 5.46%.
Real estate stocks went up 1.73%. Technology stocks fell 1.24%, while raw materials stocks went down 2.33%.
Airtel Africa was the biggest loser of the day. Its shares plunged over 15% after it reported a 9.1% drop in pretax profits.
The pound lost around 0.5% against the dollar to $1.1575 after upbeat GDP figures in the US strengthened the value of the greenback.
Wall Street opens higher despite Meta gloom: US markets wrap
Thursday 27 October 2022 15:10 , Simon Hunt
US stocks opened higher after a release of GDP data showed the US economy grew in the third quarter, quelling fears of an imminent recession.
The S&P opened up 0.1% while the Dow gained 0.7%. The Nasdaq stayed flat.
Shares in Meta tanked a whopping 20%, trading around their lowest in six years and wiping almost $70 billion from its value after the company posted its second consecutive quarterly drop in revenue.
Meanwhile, shares in McDonalds rose 2.7% after its earnings beat analyst expectations, driven by higher revenues and margins as a result of burger price increases.
ECB confirms rate hike of 0.75%
Thursday 27 October 2022 14:36 , Simon Hunt
The European Central Bank has confirmed that it will raise interest rates by a bumper 0.75%, the top end of market expectations.
In a statement the ECB said: “The Governing Council took today’s decision, and expects to raise interest rates further, to ensure the timely return of inflation to its 2% medium-term inflation target.”
“Everyone has to do their job. Our job is price stability,” ECB president Christine Lagarde said at the bank’s news conference. “We have to do what we have to do. A central bank has to focus on its mandate.”
FTSE 100 up 9 points to 7,063: Lunchtime update
Thursday 27 October 2022 12:39 , Simon Hunt
Five hours into the trading session in London, the FTSE 100 is up 9 points to 7,063. Shell shares have risen the most so far today, on the back of their third quarter results.
Here’s a look at the day’s biggest movers.
Small cap spotlight: Inspecs shares fall 24%
Thursday 27 October 2022 11:52 , Simon Hunt
Shares in Inspecs, the Bath-based eyewear specialist, have fallen 24% after it said tough trading conditions in France and Germany resulted in a 13% year-on-year drop in its order book.
The performance means it will delay the expansion of its Vietnamese factory and investment in a new site in Portugal until at least the middle of next year.
The company, which makes Savile Row frames and Norville lenses, continues to improve market share as revenues for the first nine months of the year rose 9.8% on a constant currency basis to $203 million (£175 million).Its AIM-listed shares fell 27.5p to 87.5p.
Gas prices fall 60%
Thursday 27 October 2022 10:55 , Simon Hunt
Average gas price decreased by 60% in the week to 23 October 2022, according to economic activity data published by the ONS.
However, prices remain 152% above the level of the pre-coronavirus (COVID-19) baseline in February 2020, the ONS said.
Oil stocks lead FTSE 100 higher, Anglo American struggles
Thursday 27 October 2022 10:21 , Graeme Evans
Wall Street’s worries over the big tech outlook failed to derail London’s performance today as investors showed their appreciation of stocks in more traditional sectors.
Oil majors Shell and BP, property firm Land Securities and banking group Standard Chartered were among the blue-chip risers as the FTSE 100 index held its own in a session when other leading benchmarks struggled.
London’s resilience is in contrast to the mood in New York, where five companies accounting for a fifth of the total value of the S&P 500 index are reporting this week.
Updates from Microsoft and Google parent Alphabet have already sent their shares down 7% and 9% respectively, while Meta Platforms skidded 20% after last night’s closing bell.
Chief executive Mark Zuckerberg said the Facebook, Instagram and WhatsApp business approached 2023 with a focus on efficiency after declining rates of ad spend fuelled a weaker-than-expected 52% drop in quarterly net income to $4.4 billion (£3.8 billion).
Hargreaves Lansdown analyst Susannah Streeter said: ”Hopes that resilience would burn brightly through this US earnings season have dimmed.”
London’s tech sector exposure is limited to just a handful of stocks, with the Tesla backer Scottish Mortgage Investment Trust down 1% or 7.6p to 749.2p today.
In a busy session for corporate results, the FTSE 100 index rallied 0.5% or 35.30 points to 7091.37 as the oil sector offered considerable support following Shell’s big increase in quarterly dividend.
Anglo American moved in the opposite direction, declining 57p to 2715.5p after its third quarter production update.
It said output from steelmaking coal operations jumped 28%, but copper and platinum group metals both declined 6% alongside a 5% fall in iron ore production. Other mining stocks were also under pressure, with Rio Tinto down 116p to 4727p.
The UK-focused FTSE 250, which has recovered losses seen since the mini-Budget following sterling’s rebound to $1.16, added another 64.76 points to 18,170.65.
Drugs company Indivior rose 4% or 58p to 1665p after its results included improved full-year guidance, reflecting a stronger outlook for its Sublocade treatment for moderate to severe opioid use disorder.
Shell profits lower than expected
Thursday 27 October 2022 10:14 , Simon English
SHELL profits disappointed the City today, as lower market costs of liquefied natural gas hit returns.
A dividend of $0.25 per share will be paid –a $6.8 billion payout in all.
Shell shares jumped 73p to 2372p, a boost to the many pension funds that hold its stock and rely on its dividends.
The third quarter profit of $9.5 billion (£8.2 billion), while leading to fresh calls for a windfall tax on the energy giants, was actually lower than analysts in the Square Mile had pencilled in.
Shell is under fire for spending money on share buybacks. It said today it only wants to increase them.
CEO Ben van Beurden, who is on his way to retirement, says he is in “continuous dialogue with the Treasury” on possible tax rises. He has earlier indicated that taxes on gas and oil giants are “inevitable” to help the poorest.
Oil prices down by about $30 a barrel to $90 since the summer – a sign of recession fears rising across Europe.
Van Beurden said: “We are delivering robust results at a time of ongoing volatility in global energy markets.”
Neil Wilson at markets.com said: “Shell is delivering stunning results this year, but the question is one of sustainability and tax. How long can it keep up this kind of performance?”
House price crash fears grow
Thursday 27 October 2022 09:44 , Simon English
FRESH fears about the UK economy emerged today when Lloyds Bank set aside more than half a billion pounds to deal with bad debts and warned on a “deteriorating” outlook.
Since it dominates the mortgage and savings market, Lloyds is regarded as a close proxy for the wider UK economy – 98% of its business is in Britain.
Today it said profits in the last three months tumbled by 26% to £1.5 billion, and it put £670 million aside as an “impairment” charge against possible loan defaults.
That is a worrying call for the UK economy and bad news for new PM Rishi Sunak, hoping for signs that the winter may not be as tough as many fear.
Yesterday, Barclays set aside £380 million for expected bad debts. Tomorrow NatWest will unveil more of the same as banks fret that customers cannot cope with rising costs of everything, particularly energy bills and mortgages.
Shell shares up 3%, FTSE 100 steady
Thursday 27 October 2022 08:29 , Graeme Evans
Unilever and Shell shares have risen on the back of their third quarter results, adding 0.5% or 10.5p to 3880.5p and 3% or 79.7p to 2379.2p respectively.
But Lloyds fell 5p to 42p, leaving the widely-held stock 16% cheaper than at the start of the year. The FTSE 100 index is 14.73 points higher at 7070.8, supported by the oil sector after gains for BP and Harbour Energy.
Other fallers included Anglo American, which dropped 74p to 2698.5p in the wake of its third quarter production update. The rest of the mining sector was under pressure, with Rio Tinto off 101.5p to 4741.5p.
The UK-focused FTSE 250, which has improved recently on the back of sterling’s rebound to $1.16, slipped 52.99 points to 18,052.90.
Lloyds bad debts provision hits profits, shares lower
Thursday 27 October 2022 08:11 , Graeme Evans
Lloyds said its credit performance had been resilient in the third quarter, with arrears, defaults and write-offs at low levels and below pre-pandemic levels.
Shares fell 1%, however, as the owner of mortgage lender Halifax revealed an impairment provision of £668 million to cover future bad debts. Its underlying profits fell 17% to £1.7 billion.
Chief executive Charlie Nunn added: “The current environment is concerning for many people and we are committed to maintaining support for our customers.”
He said the group’s business model and prudent approach meant Lloyds was well placed to face the uncertainties “while generating enhanced returns for our shareholders."
Higher interest rates and increased customer activity resulted in Lloyds reporting net income growth of 13% to £4.6 billion in the quarter. It now expects its net interest margin for 2022 to be greater than 290 basis points, compared with 280 forecast in July.
Richard Hunter, head of markets at Interactive Investor, said “Despite being labelled as something of a barometer for the struggling UK economy, Lloyds has had a strong quarter which underlines its strength and prudent planning.”
Made.com abandons search for buyer
Thursday 27 October 2022 07:58 , Simon Hunt
Embattled furniture retailer Made has said it has abandoned it search for a buyer to rescue the firm after admitting that “there is no reasonable prospect that an offer for the issued and to be issued share capital of the Company will be forthcoming.”
Yesterday the business said it had suspended taking new orders from customers as it edges a step closer to collapse. Made shares have fallen 99% over the past year.
Unilever posts biggest-ever quarterly jump in price rises as inflation bites
Thursday 27 October 2022 07:53 , Simon Hunt
Unilever has said it saw the biggest-ever quarterly rise in prices in the third quarter, up a whopping 12.5%. That breaks down to 9.5% price rises in developed markets and 15% in emerging markets.
Unilever CFO Graeme Pitkethly told the Standard the company also reduced pack size in a number of products in order to better manage prices.
Sales grew 10.6% in the third quarter, but sales volumes fell 1.6%. Pitkethly said he expects sales volumes to fall yet further in the following quarter.
ECB rates decision due, FTSE 100 seen lower
Thursday 27 October 2022 07:41 , Graeme Evans
Alongside blue-chip results, investors will have interest rates in mind as the European Central Bank announces its latest decision later.
Economists expect another 0.75% hike, which would take the deposit rate to 1.5%.
Hopes that the Federal Reserve will slow the pace of interest rate hikes have helped to support US markets in recent sessions, but this ended after Europe’s close yesterday as the S&P 500 finished 0.7% lower.
Disappointment over the results of Microsoft and Alphabet meant the Nasdaq lost 2%. After tonight’s closing bell, Amazon and the world’s most valuable public company Apple are due to post quarterly results.
The FTSE 100 index closed 0.6% higher last night, but CMC Markets expects a fall of 20 points to 7036 when trading resumes this morning.
Meta hit by weaker ad spending, shares slide
Thursday 27 October 2022 07:29 , Graeme Evans
Shares in Meta Platforms, the owner of Facebook, Instagram and WhatsApp, tumbled 20% in trading after Wall Street’s closing bell as investors reacted with disappointment to a 52% drop in net income to $4.4 billion (£3.8 billion) in the quarter to 30 September.
Revenues of $27.71 billion (£23.8 billion) fell 4% year-over-year, reflecting the impact of a strong dollar and an 18% decrease in the average price per ad.
Hargreaves Lansdown analyst Sophie Lund-Yates said: This isn’t the first time the social media giant has lagged, and that reflects the fact that competition is fierce, with younger entrants like TikTok a serious opponent.
“In such uncertain and difficult times, all the big names are struggling, but Meta’s inability to keep hold of its customers’ share of wallet is concerning.”
Meta’s total costs and expenses rose 19% to $22.1 billion (£19 billion), largely reflecting higher research and development spending.
Founder and chief executive Mark Zuckerberg said "While we face near-term challenges on revenue, the fundamentals are there for a return to stronger revenue growth.
“We're approaching 2023 with a focus on prioritisation and efficiency that will help us navigate the current environment and emerge an even stronger company."
