Yahoo Finance FTSE 100 Live: ‘Central banks could end up overtightening’; five-year mortgage rates hit 6%; shares flat
The FTSE 100 started flat today, as housebuilders declined while the travel sector performed well.
Ever-increasing peak interest rate expectations upped the pressure on building stocks, while travel was boosted by optimistic updates from two of Europe’s leading low-cost airlines.
Meanwhile Sainsbury’s insisted it was leading on the fight against inflation, having cut prices for products like spaghetti bolognese and toilet paper.
Key market data as FTSE 100 closes at 7519
Tuesday 4 July 2023 16:54 , Daniel O'Boyle
Take a look at today’s market data as the FTSE 100 closed slightly down
West End Final: The economic indicator that says we’re headed for recession
Tuesday 4 July 2023 16:07 , Daniel O'Boyle
“At roughly $3 trillion, the UK economy is large and contains multitudes,” Jack Kessler writes. “Not as massive as it might have been as a result of Brexit, Covid-19 and Russia's invasion of Ukraine, but enough to rank sixth in the world.
“As such, there is no one indicator that will tell you everything you need to know about it. We're sometimes not even aware we're in a recession until we're out of it, or that we never entered it at all (see: the double-dip recession that never was).
“Still, there's one data point that is sure to set the heart racing a little faster amongst policymakers in Whitehall and Threadneedle Street as well as traders and bankers: the inverted yield curve. Not to be confused with inverted fullbacks, something Pep Guardiola does to lose knock-out matches to teams not backed by sovereign wealth funds.”
Read the full West End Final newsletter from Jack Kessler here
Le Pain Quotidien closes all but one of its stores after falling into administration
Tuesday 4 July 2023 15:57 , Daniel O'Boyle
Bakery chain Le Pain Quotidien has been forced to close all but one of its branches after collapsing into administration.
The chain, which has eight branches across London, has closed all of its sites except for a cafe in St Pancras station, reported City AM.
The business said its other stores had closed on June 30 and that it had “explored every possible option" to save the business but it had “not been possible to rescue it".
Late-morning gains erased
Tuesday 4 July 2023 15:55 , Daniel O'Boyle
The FTSE 100 is close to flat again today, after its gains in the late morning disappeared.
The FTSE 100 is down seven points to 7520.
IMI and Rolls Royce have joined major banks among the fallers. Segro and AstraZeneca are the biggest risers.
Burberry backs London with new flagship
Tuesday 4 July 2023 15:19 , Daniel O'Boyle
Burberry’s open-plan, three-storey New Bond Street building has been converted into a luxuriously minimal space, all the better for showcasing the brand — and store’s — vast product offering.
Nods to the house’s globally recognised heritage are present, albeit given a modern reinterpretation (the ceiling lights recall the brand’s signature check, taupe carpets echo those iconic trenches). But there is a new-era presence felt throughout, as seen in pops of the electric “Burberry blue” found throughout and chief creative officer Daniel Lee’s redesigned logo above the door.
Naked Wines warns over weak sales and delays annual results
Tuesday 4 July 2023 14:35 , Daniel O'Boyle
Naked Wines has revealed that sales were worse than expected over the past three months and its founder has returned to help steer the firm’s turnaround.
The drinks retailer saw shares slide after it also told investors that its full-year financial results for the year to April 3, which were due for release on Thursday, will now be delayed.
It revealed that sales over the three months since April 3 have been “below expectations”, as it blamed “reduced levels of new customer recruitment”.
Threads: Everything we know so far about the new Twitter rival
Tuesday 4 July 2023 13:59 , Daniel O'Boyle
Threads is a Twitter alternative from Meta, the parent company of Facebook and Instagram.
It’s not out yet, but soon will be and could represent the most serious rival to Twitter. Forget Mastodon and Bluesky, Threads could be the new text-led social network we should all jump to next.
Read everything we know about Threads so far.
Thames Water fined £3.3 million for ‘reckless’ pollution incident near Gatwick
Tuesday 4 July 2023 13:52 , Daniel O'Boyle
Thames Water has been handed a £3.3 million fine for a “reckless” incident in which “millions of litres” of undiluted sewage was pumped into rivers near Gatwick Airport in 2017.
A two-day sentencing hearing at Lewes Crown Court was told there was a “significant and lengthy” period of polluting the Gatwick Stream and River Mole between Crawley in West Sussex and Horley in Surrey on October 11 2017.
Judge Christine Laing KC said on Tuesday that said she believed Thames Water had shown a “deliberate attempt” to mislead the Environment Agency over the incident, such as by omitting water readings and submitting a report to the regulator denying responsibility.
Elon Musk takes fresh swipe at Mark Zuckerberg after Meta boss launches rival to Twitter
Tuesday 4 July 2023 12:26 , Daniel O'Boyle
Mark Zuckerberg’s Meta is set to launch a rival to Elon Musk’s Twitter within days in an epic “battle of the billionaires” social media showdown.
The Facebook, Instagram and WhatsApp giant on Tuesday trailed its own app called Threads — immediately dubbed a “Twitter Killer” — in Apple’s App Store ahead of a launch on Thursday when it will be available to download.
Tech commentators said the app appeared to have many similar features and functions to Twitter and reflects a long held ambition of Mr Zuckerberg to supplant the platform known for its millions of users’ “tweets”.
New mortgages blow as five-year fixed rates top 6%
Tuesday 4 July 2023 11:47 , Daniel O'Boyle
Homeowners were dealt another huge blow today when the average cost of a five-year fixed rate mortgage rose above the six per cent mark for the first time since November.
Latest data from analysts Moneyfacts show the average five-year fixed rate up from 5.97 per cent to 6.01 per cent.
Meanwhile the average two-year rate was on the brink of surging past the 6.5 per cent barrier after rising from 6.42 per cent to 6.47 per cent.
City A.M. managing director backs paywall option after sale
Tuesday 4 July 2023 10:58 , Daniel O'Boyle
The co-founder and managing director of City A.M. hopes to use the sale of the London freesheet as an opportunity to put some content behind a paywall, having revealed the paper was up for sale yesterday.
However, he added that the newspaper itself will “always” be free, though a paid subscription delivery option could be introduced.
Managing director and co-founder Lawson Muncaster owns a 25% stake in City A.M. and said he hoped to still be involved after a sale. Fellow co-founder Jens Torpe also owns 25%, while a Dutch group owns 50%
Beckham’s Guild Esports lines up for F4 Championship
Tuesday 4 July 2023 10:30 , Daniel O'Boyle
Guild Esports, the professional video game outfit part-owned by David Beckham, is entering the world of simulated motor racing.
The company announced today that it will take part in the British F4 Esports Championship this year. Guild is the first E-sports firm to be publicly traded in the UK and also fields professional teams across Fortnite, Rocket League, FIFA, Valorant and Counter-Strike: Global Offensive.
It said today that it would field two professional drivers in the British F4 contest, which takes place in September and November.
There will be eight rounds held at digital replications of real-world racetracks and Guild said it would reveal the identity of its racers “in due course”. Shares ticked up 0.1p to 0.74p early today
Investor activists target climate policies more than ever before, report finds
Tuesday 4 July 2023 09:46 , Daniel O'Boyle
Investors have launched more environmental campaigns than ever before this year, as more companies are coming under pressures from a wave of shareholder activism, a new report has found.
The UK is a top target for activist investors as major firms like Shell, BP, HSBC and The Restaurant Group have faced shareholder rebellions this year.
The number of activist campaigns has grown steadily each month since January, resulting in 25 launched across Europe in May, according to professional services firm Alvarez & Marsal (A&M).
Five-year mortgage rates hit 6%
Tuesday 4 July 2023 08:58 , Daniel O'Boyle
The average five-year fixed-rate mortgage has crossed the 6% threshold, after two-year mortgages did the same last month.
The average five-year rate rose from 5.97% to 6.01%.
Two-year rates also kept climbing, rising to 6.47%.
The number of mortgage products available ticked up slightly to 4,404, but remained well below typical levels, indicating further repricing is still on the way. Five-year gilt yields, used by lenders to price mortgages, crossed the high water mark hit just after last year’s mini-Budget yesterday, sending them to the highest level in 15 years. Two-year yields have repeatedly hit 15-year highs in recent weeks.
Market snapshot with FTSE 100 flat
Tuesday 4 July 2023 08:35 , Daniel O'Boyle
Take a look at all the key market data, as the FTSE 100 holds steady this morning.
FTSE 100 slips back with house builders taking a hit
Tuesday 4 July 2023 08:29 , Michael Hunter
London’s main stock market fell back in opening trade, with housebuilders exposed to a fresh wave of selling, as the outlook for rising interest rates and higher mortgage costs keeping the sector under pressure.
Taylor Wimpey was among the biggest fallers, down 2p, or almost 2% to 102p. Persimmon fell 18p, or 1.8% to 1110p. Barratt Developments was 6p lower at 411p, a drop of 1.4%.
The FTSE 100 fell almost 7points overall to 7520.76, easing back by 0.1%. The overall decline was offset by a rally for travel stocks after more strong numbers from the sector into the peak summer getaway season. Ryanair broke records for the number of passengers it flew in June, at over 17 million.
Tui, the tour operator, topped the London leaderboard, up 10p or 1.7% at 595p. Carnival, the cruise line, added 6p to 1349p.
Office moves expert Restore tumbles on profit warning
Tuesday 4 July 2023 08:14 , Daniel O'Boyle
Shares in office moves expert Restore have tumbled by more than a quarter after a profit warning this morning.
The group said its digital record management business was still performing well. But its shredding business slowed as it had been unable to sell shredded paper for recycling at the same costs as before, while revenue from its IT recycling arm was down, after a “unique and significant increase” during the pandemic.
After having closed one of its processing sites, Restore said there are “further actions planned to reduce costs across the business”.
Meta to launch Twitter rival on Thursday
Tuesday 4 July 2023 07:46 , Daniel O'Boyle
Facebook and Instagram owner Meta is set to launch Threads, widely seen as a direct attempt to siphon users away from Twitter, on Thursday.
The app, linked to Instagram, will be launched amid chaos at Elon Musk’s social media site. Last weekend, Twitter users found themselves unable to load more Tweets. Musk has also attempted to push a subscription service, Twitter Blue.
Like twitter, Threads is built around short, text-based posts. The business has had a history of success with features first popularised by other sites, with Instagram’s popular stories having been seen as a clone of Snapchat’s and Reels as a TikTok imitator.
Summer travel returns as low-cost airlines see jump in passengers
Tuesday 4 July 2023 07:29 , Daniel O'Boyle
The rebound of summer travel continued into June, as two of Europe’s leading low-cost airlines reported a jump in passengers.
Ryanair flew 17.4 million passengers during the month, up 9.4%, despite 900 flights being cancelled, mostly due to air traffic controller strikes in France. The Irish carrier has now flown 173.4 million passengers over the last 12 months.
Wizz Air flew 5.3 million passengers, up 22.5% from last year, as it announced new flights to Albania.
Sainsbury cuts price of toilet roll and bolognese
Tuesday 4 July 2023 07:24 , Simon English
SAINSBURY’S today claimed to be leading the way on leading food prices as the sector tries to fend off allegations of “greedflation”.
Yesterday it cut the cost of its own brand toilet paper by 11%. Today it said it had invested £60 million in price cuts on other essentials such as pasta and chicken.
The cost increases on one popular family meal – Spaghetti Bolognese – have been absorbed by the company, it said by example.
In the 16 weeks to June 24, sales rose by 9.8%, though clothing sales were down 3.7%, a sign that customers are cutting back on non-essentials.
For the full year, Sainsbury expects to make profits of between £640 million and £700 million, unchanged since the last time it updated the City.
Simon Roberts, the CEO under pay for a near £5 million pay deal, said: “We are putting all of our energy and focus into battling inflation so that customers get the very best prices when they shop with us, particularly now as household budgets are under more pressure than ever. Food inflation is starting to fall and we are fully committed to passing on savings to our customers.”
FTSE 100 set for steady start
Tuesday 4 July 2023 07:24 , Michael Hunter
The FTSE 100 is expected to make a steady start today, with action on European equities markets likely to be constrained with the US closed for the Indepence Day holiday.
Overall, London’s main stock index slipped over the the previous session, as falls for healthcare stocks outweighed a gain for resource stocks, led by miners. It inched 0.1% lower overall .
A lack of set-piece data on the economic calendar left traders looking ahead past the lack of Wall Street trade to the next session, when forward-looking purchasing managers’ index data for the services sector is due across Europe. The numbers will play into perceptions about whether rising interest rates are starting to bite in the fight against inflation.
Michael Hewson at CMC Markets said that there were signs from “ falling input costs due to lower fuel costs, commodity price decreases, and improvements in supply chains” that “ a wave of disinflation is working its way through the global economy.
He warns that “for all the hawkish narrative coming from central bankers ... if they aren’t careful, they could end up over tightening at a time when inflation is already on a downward path.”
Yesterday’s top stories
Tuesday 4 July 2023 06:59 , Daniel O'Boyle
Good morning, here is a selection of yesterday’s top stories:
The boss of the International Energy Agency warned the public that energy prices could rise again this winter
The cost of a litre of petrol is set to fall below £1.40, after the Comptetion and Markets Authority cracked down on supermarkets overcharging
the owners of City A.M. are ‘open’ to selling the free newspaper
Investor spending on office buildings is down by 50% amid high interest rates
