Yahoo Finance FTSE 100 Live: FTSE 100 lower as US stocks open down, UK wage growth slows
Inflation takes centre stage as City braces for clues on Bank of England interest rate cut
Tuesday 16 January 2024 15:55 , Daniel O'Boyle
The City spotlight swings to a hotly anticipated set of economic data on Wednesday, which will help define expectations on the timing of an interest rate cut from the Bank of England.
Inflation will be back at centre stage, with the Consumer Price Index expected to carry on falling toward the BOE’s office target of 2%.
CPI is expected to come in at 3.8% for December, down from 3.9% in the previous month. It would ensure that the annual rate at which prices are rising is continuing to ease, heading away from the peak over 11% in 2022. Double-digit inflation stoked the cost-of-living crisis fuelled by high energy costs after Vladimir Putin’s invasion of Ukraine.
Nationwide 'out in the cold', brokers say, as it stays out of mortgage rate price war for now
Tuesday 16 January 2024 15:45 , Daniel O'Boyle
Brokers today said the country’s largest building society Nationwide now appears to be an outlier in the mortgage rate price war as a number of its rivals cut rates again.
Nationwide has reduced the prices of its mortgages eleven times in the last fourth months, but has held firm in recent weeks as rivals began the year with what many commentators called a “price war”. All five of the other “big six” lenders - HSBC, Santander, NatWest, Barclays and Halifax owner Lloyds Banking Group - have cut rates this year.
Today, Metro Bank and TSB - two major high-street lenders just outside of the “Big Six” - announced cuts, following reductions from lenders including HSBC yesterday.Read more here
Market snapshot: Dow Jones, S&P and Nasdaq all down
Tuesday 16 January 2024 14:54 , Daniel O'Boyle
Take a look at today's market snapshot as US stocks fall
Market snapshot: Oil rises back above $79
Tuesday 16 January 2024 13:20 , Daniel O'Boyle
Take a look at today's market snapshot as oil climbs on reports of Shell suspending Red Sea shipments.
Oil in focus amid report Shell suspending shipments
Tuesday 16 January 2024 13:12 , Daniel O'Boyle
The price of oil will be in further focus as energy supermajor Shell has suspended its shipments through the red sea.
Te Wall Street Journal reports that fears of further escalation in the crucial martime chokepoint led to the decision. The US and UK announced strikes on the Houthi rebels who have de facto control over most of Yemen at the weekend, after a number of ships were targeted.
Brent crude is currently at $78.65, up almost $1 a barrel today, but could climb further as markets react to the news.
Goldman profits grow
Tuesday 16 January 2024 12:56 , Daniel O'Boyle
US investment banking behemoth Goldman Sachs reported 51% profit growth in the fourth quarter to $ 2.01 billion in the fourth quarter.
The results will ease some of the pressure on boss David Solomon, who drew criticism for - among other things - the time he devoted to his DJing career. Solomon has since stepped away from DJing.
"This was a year of execution for Goldman Sachs," Solomon said today. "With everything we achieved in 2023 coupled with our clear and simplified strategy, we have a much stronger platform for 2024."
Shares rose in premarket trading.
THG boss likens himself to Beckham, Robbie Williams
Tuesday 16 January 2024 11:11 , Daniel O'Boyle
THG boss Matthew Moulding seemingly compared himself and his company to David Beckham and Robbie Williams today as the ecommerce firm’s shares soared after breaking even in 2023.
This morning, Moulding took to LinkedIn to offer more comment on the year, alongside a video review. The video was made up mostly of clips from recent documentaries about David Beckham and Robbie Williams, interspersed with news headlines about THG.
THG shares started slow but climbed by as much as 11% to 73.7p today.
Rolls-Royce and AstraZeneca shares struggle, Spirent up 7% in FTSE 250
Tuesday 16 January 2024 10:20 , Graeme Evans
A “sell” recommendation for Rolls-Royce shares today stalled the recovery story for the FTSE 100-listed engine giant.
The stock, which jumped 221% in 2023 and touched 310p last week, fell 3.8p to 296.2p following Berenberg's ratings switch and 240p target price.
Broker comment fuelled a number of other big moves in the FTSE 100, with AstraZeneca down 3% or 354p to 10,498p after UBS opted for a “sell” rating and said it now favoured rival GSK.
Property portal Rightmove also slid 5% or 26.4p to 538.4p after JPMorgan cut its price target to 493p with an “underweight” recommendation.
The merry-go-round of ratings changes left the FTSE 100 index 0.6% or 43.42 points weaker at a one-month low of 7551.49, in line with trends seen in Europe and Asia.
On a brighter note, Taylor Wimpey shares rose half a penny to 145.25p after Jefferies backed the housebuilder with a new 172p price target.
The US bank also switched Persimmon to a “buy” stance, meaning the York-based builder marked its first day back in the FTSE 100 with an improvement of 29.5p to 1480p.
Other blue-chip risers included credit checking firm Experian, which lifted 3% or 82p to 3208p as third quarter revenues growth of 9% came in at the top end of expectations.
The FTSE 250 index slipped 19.88 points to 19,180.96, with price comparison site Moneysupermarket down 7% or 17.8p to 250.8p after Jefferies withdrew its “buy” recommendation.
Spirent Communications enjoyed a rare session as the best mid-cap stock, rising 7% or 7.9p to 123.7p as the equipment testing firm said it started the new year with a growing order book. The robust update followed last year’s 53% slide for shares.
Defence equipment firm Qinetiq also fared well after it announced plans for a £100 million share buyback alongside an in-line trading performance. Shares lifted 21.6p to 339.8p.
Insolvencies rise as taxman steps up enforcement
Tuesday 16 January 2024 09:59 , Daniel O'Boyle
UK insolvencies rose by 14% in 2023, as the taxman started chasing more unpaid bills.
There were a total of 25,159 corporate insolvencies, with high-profile casualties including Wilko, Paperchase and the holding company of the Telegraph.
Lindsay Hallam, senior managing director in the corporate finance & restructuring team at FTI Consulting, said: “2023 has been a year of tough economic conditions for businesses, resulting in an increase in corporate insolvencies across England and Wales. The latest insolvency statistics show a 14% rise in corporate insolvencies to 25,159 in 2023 compared to the previous year.
“Although largely driven by Creditor Voluntary Liquidations (“CVLs”), the number of compulsory liquidations has continued to increase suggesting not only rising levels of distress and business failure but also an uptick in enforcement action from previously passive creditor groups. This includes HMRC, with an increased number of winding up petitions presented to the court in respect of unpaid PAYE and VAT.”
Wise shares slip on customer volumes drop
Tuesday 16 January 2024 09:55 , Simon Hunt
London fintech Wise saw a 10% fall in the volume of personal customer transactions in the third quarter compared to the previous year amid fiercer competition from banking rivals.
The Shoreditch-based money transfer business, which does not have a banking license and does not pay interest on customer accounts, posted average personal customer volumes of £3,900 in the second quarter of its 2023 financial year, but that has since slipped back to £3,100.
But the firm has strengthened its business offering, partnering with UK business bank Allica Bank, digital travel platform Agoda and spend management firm Payhawk. Its overall revenues rose 23% to £277 million during the quarter.
Fintech firms have come under increased pressure from mature high street rivals looking to enhance their tech capabilities and who offer interest-bearing accounts.
Wise shares fell as much as 2.5% after markets opened before paring back losses later in the morning.
Wise co-founder Kristo Kaarman has returned to his role as CEO after taking several months off from the business to spend time with family.
Will BoE remain hawkish?
Tuesday 16 January 2024 09:48 , Daniel O'Boyle
Ashley Webb, UK economist at Capital Economics, says: "Another big drop in wage growth in November supports our view that domestic inflationary pressures are fading fast. But the tightness of the labour market will probably mean that the Bank of England maintains its hawkish bias at its policy meeting in February.
"Overall, the second bigger-than-expected fall in wage growth in as many months lends some support to our view that interest rates will be cut from 5.25% to 5.00% in June."
Market snapshot: FTSE 100 falls
Tuesday 16 January 2024 08:45 , Daniel O'Boyle
Take a look at today's market snapshot with the FTSE 100 lower,
Ocado and Experian lead FTSE 100, Rightmove down 4%
Tuesday 16 January 2024 08:40 , Graeme Evans
Ocado shares are up 6% after the company’s joint venture with Marks & Spencer reported “significant progress” in 2023, including a fourth quarter 10.9% jump in retail revenues.
The rise of 37p to 656p made Ocado the best performing stock in the FTSE 100 index, followed by a 3% or 91p improvement to 3217p for Experian after the credit checking firm’s latest robust trading update.
Vodafone’s AI partnership with Microsoft helped shares to lift 0.2p to 67.4p but the wider FTSE 100 index fell by 0.4% or 32.56 points to 7562.35.
Stocks under pressure included Rolls-Royce, which retreated 5p to 295p after Berenberg analysts gave the engines giant a “sell” recommendation and 240p target price. Rightmove posted the biggest fall, down 4% or 24p to 540.8p.
The FTSE 250 index fell 32.20 points to 19,168.64, led by a decline of 5% or 13.4p to 255.2p for price comparison business Moneysupermarket.com.
Defence industry supplier Qinetiq rallied 7% or 21.8p to 340p after announcing plans for a £100 million share buyback alongside an in-line trading update.
THG rises on cashflow breakeven 2023
Tuesday 16 January 2024 08:10 , Daniel O'Boyle
Shares in ecommerce firm THG rose by 2.8% in early trading as it broke even in cashflow terms in 2023, despite revenue dipping.
Revenue came to £1.99 billion, as the business founded by Matt Moulding changed strategy to focus on higher-margin products. That meant underlying profit is set to rise to £117 million.
In cash terms, the business broke even.
CEO Matthew Moulding said: “2023 was a year that threw up many challenges for all businesses, and I'm delighted in how the Group not only responded to these challenges, but grew stronger through the year.”
Shares are up 2.8% to 68.8p.But that still leaves them down more than 90% from 2021’s IPO price.
Card Factory set for profit at top of forecast range after 'strong' Christmas
Tuesday 16 January 2024 07:53 , Michael Hunter
Candles and soft toys as well as greetings cards helped boost Christmas sales at Card Factory, leaving it on course for annual sales at the top end of forecast ranges.
The 1,000 store chain reported a rise in like-for-like sales of almost 8% in November and December. For the 11 months to the end of December, sales reached £476.9 million, up over 10%.
That leaves the company on course for annual earnings of around £62 million.
With customers spending more per basket, there was double digit growth for soft toys and candles. It was also helped by a new partnerships, including with fashion and homeware chain Matalan.
Darcy Willson-Rymer, CEO, said:
"Our value and quality proposition continues to resonate with customers at a time when value for money is as important as ever. Even during challenging times, consumers want to celebrate key life moments and this was reflected in the positive performance that we saw in the Christmas trading period and throughout the year to date."
Panmure Gordon and Liberum merger deal
Tuesday 16 January 2024 07:53 , Simon English
Panmure Gordon today confirmed its merger with rival Liberum as a long-expected shake up of the smaller broking firms in the City continued apace.
The two brokers will have around 300 staff and 250 UK corporate clients and will be based at the heart of the City.
The CEO will be Rich Ricci, who once called himself “the maddest F****” on the planet, a reference to his keen interest in horse racing. He is worth at least £100 million from his days at Barclays investment bank and once won £100,000 in a day’s racing at Cheltenham.
His horses include Gaelic Warrior and Lossiemouth.
Bidhi Bhoma, the Liberum chief, will become deputy chief executive.
Last year finnCap merged with Cavendish while Deutsche Bank bought Numis.
All of the smaller players have struggled for scale in a market where margins are tight.
Today’s all-share deal is unlikely to be the last.
Ricci said: ““In Panmure Liberum, we are combining two highly complementary and culturally aligned businesses and creating a new force in UK Investment Banking with an exciting long-term future.”
He added: “We have long admired the impressive track record that Liberum has built in its 16-year history and we now look forward to building on that momentum together.”
Vodafone to scrap its European data centres after $1.5 billion Microsoft deal
Tuesday 16 January 2024 07:28 , Simon Hunt
Vodafone plans to scrap its European data centres and replace them with 'virtual' ones after striking a $1.5 billion deal with Microsoft.
The 10-year agreement will see Vodafone migrate its cloud services to the Microsoft Azure platform and introduce a range of AI-powered services to customers, while Microsoft will invest in Vodafone's standalone Internet of Things platform and use Vodafone’s fixed and mobile connectivity services.
“This new generation of AI will unlock massive new opportunities for every organisation and every industry around the world,” said Satya Nadella, chairman and CEO, Microsoft.
“We are delighted that together with Vodafone we will apply the latest cloud and AI technology to enhance the customer experience of hundreds of millions of people and businesses across Africa and Europe, build new products and services, and accelerate the company’s transition to the cloud.”
Ocado hits one million customers in January
Tuesday 16 January 2024 07:24 , Daniel O'Boyle
Grocery delivery firm Ocado Retail passed the one million customer mark after it sold a record number of items in December.
Retail revenue came to £609.4 million in the fourth quarter for the joint venture between Ocado and M&S, up by 10.9% on last year. While some of that was driven by price, sales volumes were still up by 4.8%. On January
Ocado ended the year just short of one million customers, but crossed the threshold in early January.
Hannah Gibson, Ocado Retail's chief executive officer, said: "We made significant progress in 2023. We have focused first and foremost on being a great shopkeeper, improving our unbeatable range, great value and unrivalled experience - all underpinned by improved cost efficiencies.
“Thank you to everyone at Ocado Retail, M&S and Ocado Group who've worked so hard to deliver the first year of our strategy and these encouraging results.”
Ocado expects mid-high single digit revenue growth this year.
Nikkei's strong run comes to a halt, FTSE 100 seen lower
Tuesday 16 January 2024 07:19 , Graeme Evans
Asia markets have endured a tough session, with the Hang Seng index in Hong Kong down by 1.8% and Tokyo’s Nikkei 225 off 0.8%.
The end of the strong run for Japan’s leading benchmark came after producer prices came in flat in December compared with expectations for a 0.3% fall.
The Nikkei has rallied to a 34-year high in recent sessions, buoyed by signs that the country’s ultra-loose interest rate policy is set to continue.
European markets also struggled yesterday after several ECB policymakers pushed back on the possibility of interest rate cuts this year.
The FTSE 100 index fell 0.4% and is forecast by CMC Markets to open another 25 points lower at 7570 this morning. US traders start their shortened week with quarterly results by Morgan Stanley and Goldman Sachs.
DWP secretary: Jobs figures are sign economy is 'turning corner'
Tuesday 16 January 2024 07:15 , Daniel O'Boyle
Secretary of State for Work and Pensions Mel Stride said the latest jobs figures are a sign the economy is getting back on trac.
Stride said: “Today’s figures are yet more evidence the economy is turning a corner with the numbers of jobs hitting a record high and inactivity falling by nearly 270,000 last year.
“Our £2.5 billion Back to Work plan will open up the benefits of employment for thousands more people, while we continue to make work pay by cutting taxes and boosting the national living wage.”
UK unemployment at 4.2%, wage growth slows to 6.6%.
Tuesday 16 January 2024 07:06 , Daniel O'Boyle
The UK unemployment rate remained unchanged at 4.2%, while wage growth continued to slow to 6.6%.
Wages including bonuses were up by 6.5%. Both wage growth figures close to expectations and are moving further away from the record highs hit last year, but still at a level the Bank of England sees as unsustainable with its 2% target.
Recap: Yesterday's top stories
Tuesday 16 January 2024 06:39 , Simon Hunt
Good morning from the Standard City desk.
A poll out yesterday suggests the Tories are heading for an electoral wipeout similar to the defeat of 1997. YouGov says they will be left with less than 170 seats – 11 Cabinet ministers will be among those signing on.
Things can change, of course. But one worrying factor for the Tories must be the job market.
Going back to when George Osborne, once of this parish, was Chancellor – though that seems like an age ago – jobs have been a strength for the Conservative Party.
No one who wanted work could reasonably argue that there was none.
Official unemployment figures for December are out this morning and will be watched keenly for signs of wobble.
Today we have enough evidence already to suggest all is not well. PageGroup is just the latest recruiter to warn of a lack of jobs confidence among recruiters and clients.
Fewer people want to risk jumping jobs, even if there were one to jump to.
The London labour market looks weakest of all amidst a cull of bankers who don’t have enough deals to keep them busy.
Here's a summary of our other top stories from yesterday:
Another Profit warning from Crest Nicholson - developer now expects to make £41 million for 2023, down from £45 million to £50 million - more spiralling costs at a problem project in Farnham and a claim over a fire at a block of flats
Defence contractor Avon Protection is banging the drum about a contract with the German Navy for diving gear
Pawnbroker Ramsdens says revenues climb 27% on high gold prices
Chinese military bodies, state-run artificial intelligence research institutes and universities have over the past year purchased small batches of Nvidia semiconductors banned by the U.S. from export to China, a Reuters review of tender documents show.
And: Top-level City executives expect London dealmaking rebound according to KPMG survey
