Yahoo Finance FTSE 100 Live: US inflation falls by more than expected; FTSE closes at 7825
The FTSE 100 has risen beyond 7800 today after shares continued their recovery into a fourth week yesterday.
Eyes will be on the US this afternoon, when the Bureau of Labor Statistics publishes the country’s latest inflation figures.
Economists expect the rate to fall from 6% to 5.2% in March as last year’s surge in energy prices after Russia’s invasion of Ukraine drops out of annual comparisons.
FTSE 100 Live Wednesday
US inflation and Federal Reserve minutes in focus
De La Rue shares slide after profit warning
Elon Musk fired 80% of Twitter workforce
GDP figures in focus tomorrow
17:33 , Daniel O'Boyle
The Office for National Statistics will release the latest UK GDP figures tomorrow morning.
These figures will cover February, a month in which inflation came in higher than expected.
After a stronger-than-expected expansion of 0.3% in January, the numbers will reveal if the trend for the UK to head away from recession continued. While the OBR and the Bank of England both no longer expect a decline, the IMF said this week that it expects the UK economy to contract by 0.3 per cent this year.
This time around, GDP is expected to show even more modest growth – of 0.1 per cent according to consensus forecasts – enough to keep City experts more positive than the bleaker predictions originally made for 2023.
LVMH revenue up 17%
17:12 , Daniel O'Boyle
Revenue at luxury fashion and alcohol conglomerate Moët Hennessy Louis Vuitton (LVMH) jumped by 17% to €21.04 billion in the first quarter of 2023 as the end of Covid-19 restrictions in Asia led to a rebound in demand.
Long lockdowns had led to a decline in revenue from wealthy Asian customers, but the company said it saw a “significant rebound” in Asia in Q1. Revenue in Japan jumped by 34%, while in the rest of Asia it was up by 14%.
Fashion continued to bring in the majority of the Paris-based giant’s revenue, at €10.73 billion, thanks to the success of brands including Louis Vuitton, Marc Jacobs and Loro Piana.
No ‘systemic banking crisis’, Bank of England governor says in Washington speech
16:07 , Daniel O'Boyle
The governor of the Bank of England has repeated that he does not think the world is facing a “systemic banking crisis” following a series of recent failures in the sector.
Speaking at an event in Washington, Andrew Bailey said the reforms that were put in place after the 2008 financial crisis “have worked”, and banks in the UK are in a good position.
“In recent weeks we have seen the crystallisation of problems in a few parts of the banking sector,” he said at an event hosted by the Institute of International Finance.
Inflation decline boosts US stocks
15:35 , Daniel O'Boyle
Shares in US companies are off to a strong start, thanks in part to a bigger-than-predicted drop in inflation.
The Bureau of Labor Statistics announced just before markets opened that headline inflation felll to 5 per cent, lower than the expected 5.2 per cent.
That sign that the Federal Reserve’s recent interest rate hikes are having an effect helped drive stocks up, with the S&P 500 rising by 0.5 per cent to 4129.55 and the Dow Jones gaining 0.3 per cent to 33788.81. The Nasdaq is up by 0.1%, to 12038.29.
Law firm the Ince Group to enter administration
14:39 , Daniel O'Boyle
150-year-old law firm the Ince Group is set to enter administration after a protracted auditng process meant it has still not published its financial results for the year ended 31 March 2022.
The firm - which has an office in Aldgate - said a major creditor had revealed it would no longer support the business, which left its board with “no choice but to place the company into administration”.
Quantuma is set to be appointed as administrator and will aim to sell the Ince Group’s business as soon as possible.
US inflation falls to 5%, but stubborn core reading means battle is far from over
14:09 , Daniel O'Boyle
US inflation fell by more than expected to 5 per cent in March, but fears that it will be difficult to bring prices fully under control remain as the core CPI figure remained steady.
A decline in the headline figure from February’s 6 per cent was widely expected, as oil price rises following Russia’s invasion of Ukraine are now accounted for in the comparisons. But the decline in the headline figure was more than expected, with economists predicting a drop to 5.2 per cent.
Given the expected headline fall, the Bureau of Labor Statistics’ core inflation reading may gain more attention. Unlike the headline figure, core CPI - which excludes more volatile food and energycosts - was close to unchanged at 5.6 per cent.
The £100 million cold snap
13:27 , Michael Hunter
December’s cold snap cost the taxpayer over £100 million in cold weather payments to help hard-pressed Brits keep warm in the run up to Christmas during a cost-of-living crisis.
Figures out today from the Department for Work and Pensions show that around 80% of the winter’s total payments of £130 million came during the festive season freeze, meaning a payout of around £104 million in the last month of 2022.
US shares seen slightly higher
12:48 , Daniel O'Boyle
US shares are set to make tentative gains as investors await the Bureau of Labor Statistics’ latest inflation reading.
The Dow Jones is set to rise by 0.2% to 33921, while the S&P 500 is expected to rise bby 0.1% to 4141.50, according to futures markets.
The BLS will publlish inflation statistics at 1:30pm, with a fall in the headline figure widely expected as energy price rises related to Russia’s invasion of Ukraine drop of of the year-on-year comparisons.
No jobs cuts as plans for logistics overhaul affect 7,000 Sainsbury’s staff
12:05
Sainsbury’s has announced a major restructuring of how its logistics operations work, affecting around 7,000 staff throughout the country.
The retail giant said that no one would lose their job or get moved to worse contractual terms and that the move would mean service and availability are better for customers.
The plan is to stitch together a patchwork of different logistics contracts up and down the country into just three, each dealing with a different type of product.
UK GDP: Set-piece moment looms for economy from latest growth readout
11:14 , Daniel O'Boyle
There is another major set-piece moment for the UK economy this week, when the latest growth readout will test the trend for a more robust performance in the face of high inflation and the cost-of-living crisis.
Gross domestic product data for February will track the size of the economy via all the goods and services produced in the month. After a stronger-than-expected expansion of 0.3% in January, the numbers will reveal if the trend for the UK to head away from recession continued.
FTSE 100 higher, Petrofac shares down 16%
10:30 , Graeme Evans
Anglo American today fell 24p to 2685p following the release of the mining giant’s latest rough diamond sales figure.
De Beers, which is 85% owned by Anglo American, generated $540 million (£435 million) in the third sales cycle of 2023, up on the previous period but still lower than a year ago.
New De Beers boss Al Cook said the result met expectations amid strengthening consumer demand for diamond jewellery, particularly among China tourists.
However, shares fell to leave Anglo near the top of the FTSE 100 fallers board alongside Ocado and Flutter Entertainment.
The performance bucked an otherwise strong London session as the top flight maintained its recent momentum by adding another 48.44 points to 7,834.16.
The FTSE 250 index drifted 16.51 points to 18,939.54, with Tullow Oil down 0.7p to 31.65p after analysts at Jefferies cut their target on the Africa-based oil explorer by 15p to 25p.
Great Portland Estates moved in the opposite direction, lifting 1% or 5.5p to 519.5p as it reassured investors by reporting a record leasing year and “sustained demand” for high quality office space in central London.
Oil and gas infrastructure firm Petrofac slid 16% in the FTSE All-Share as a portfolio review revealed higher costs on legacy contracts, including a refinery project in Thailand.
The company now expects an underlying loss of up to $170 million (£137 million) for 2022, causing shares to fall 11.8p to 60.85p. New chief executive Tareq Kawash told investors: “Petrofac’s focus is on completing legacy contracts as quickly, efficiently and safely as possible.”
On a brighter note, AIM-listed Marks Electrical jumped 7% as the online white goods retailer said strong recent trading pushed revenues 21.5% higher to a record £97.8 million in the year to 31 March.
It now expects to beat full-year targets on profit and cash conversion, with positive trading in April adding to share price momentum as the Leicester-based firm rose 6p to 89.5p.
Elon Musk fired 80% of Twitter workforce but insists ‘we’re headed to a good place’
09:48 , Simon Hunt
Elon Musk said he has fired as much as 80% of the Twitter workforce since buying the company last year after confessing he only agreed to the takeover because a judge would have forced him to do so.
In a twisting and wide-ranging two-hour interview with the BBC, arranged just minutes in advance, the billionaire Tesla boss said staff numbers at the social media site had been slashed from just shy of 8,000 to around 1,500 in a bid to accelerate the firm’s drive to profitability, a move which he described as “painful” and “not fun at all.”
LadBible publisher turns to US as rising costs hit bottom line
08:58 , Daniel O'Boyle
LadBible publisher LBG Media will look to the US for growth after rising costs meant profit dipped in 2022.
Revenue was up 15% but all categories of costs rose too, prompting the company to lay off 43 employees in October. As a result, profit was down to £15.7 million.
CEO Solly Solomou said that while there was still a “big opportunity” in the UK, the publisher was eyeing expansion abroad, especially in the US where it has set up a new office.
Solomou told the Standard the US arm would aim less for the young male audience that LBG targeted in its initial growth. Instead, he cited Vox Media as a firm to replicate, noting the group’s audience is now close to a 50/50 gender split. However, he added that there wasn’t one direct competitor.
The firm is the top news publisher on TikTok, but said the platform had no significant impact on either revenue or costs at the moment, as the short-form video app has not yet set up a monetisation system.
LBG Media shares are down 5% today to 73.1p.
Everyman profits up as customers seek upmarket film experience
08:23 , Daniel O'Boyle
The CEO of upmarket cinema chain Everyman said the firm’s proposition was “as relevant as ever” as post-pandemic filmgoers seek an enhanced experience.
Revenue was up 60.8% to £78.8 million, while profit grew by 64.8% to £14.5 million. The growth was thanks in part to increased spending on Everyman’s food and beverage menu - including items like pizza, hot honey halloumi and a selection of wines - to £9.34 per head.
“We were encouraged by strong growth in admissions in the year, marking a return to business as usual,” CEO Alex Scrimgeour said. “Everyman remains a popular and affordable choice for consumers, combining great film, hospitality and atmosphere to provide an exceptional cinema experience.”
Scrimgeour added that the business - which already has 38 sites - would aim to epand further by resuming its organic expansion plans while also looking to acquire.
Everyman’s success comes in stark contrast to market leader Cineworld’s recent struggles. That brand filed for bankruptcy protection last year, eventually agreeing to a restructuring deal in which creditors take full control of the business.
FTSE 100 edges higher, Anglo American lower despite De Beers boost
08:20 , Graeme Evans
The FTSE 100 index is back at the 7800 mark after adding 13.66 points in early dealings.
Despite this latest improvement, the mood is cautious as traders await US inflation figures and this evening’s minutes of the Federal Reserve’s March meeting.
Anglo American shares reflected the mood, dropping 28p to 2681p despite some encouraging figures from its diamonds business De Beers.
De Beers CEO Al Cook said: "We continue to see some encouraging positive trends in consumer demand for diamond jewellery, not least in China where we're beginning to see some signs of recovery in consumer confidence following the relaxation of travel restrictions.”
The FTSE 250 index rose 28.22 points to 18,984.27, while All-Share listed banknote printer De La Rue slumped 26% or 13p to 37p following its profits warning. The company has lost 55% of its value so far this year.
De La Rue drops 30% on profit warning
08:15 , Simon Hunt
Shares in De La Rue have plunged 30% in the opening minutes of trade in London after the firm sounded the alarm on its profits and said it is seeking to amend the terms of its loans and defer pension contributions.
The Basingstoke-based banknote printer said its expected profits would be below market expectations as it warned: “the demand for banknotes has been at the lowest levels for over 20 years.”
Gold above $2,000 an ounce, oil higher
07:57 , Graeme Evans
The gold price is holding its position above $2,000 an ounce as the precious metal continues to provide shelter against high inflation and heightened economic uncertainty.
The price has jumped from $1,800 over the past month and is within sight of the August 2020 record of around $2,075 as traders increasingly worry about the health of the US economy.
Oanda’s senior market analyst Edward Moya said today: “Gold demand should remain healthy as a plethora of risks remain on the table this week.”
Elsewhere in commodities, the price of Brent crude stood above $85 a barrel after a rise of 2% in yesterday’s session.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said the increase followed another decline in US crude stockpiles.
She added: “There is also upward pressure coming from supply side concerns, with the effects of the announcement last week from OPEC+ countries of a reduction in output to bolster prices still lingering while exports from Kurdistan through a key pipeline remain suspended.”
Major landlord Unite Students warns on under supply of accommodation as reservations soar
07:50 , Michael Hunter
Unite Students, which provides homes for almost 75,000 people at college in 23 cities in the UK, warned today that the supply of multiple-occupancy housing in the country is being outstripped by demand as private landlords desert the market.
The London-listed company said bookings for next academic year were at 90%, with “reservations significantly ahead of recent sales cycles”, leaving it on track for rental growth of 6% to 7%. This time last year, bookings were at 78%.
Unite, which runs the Stratford ONE accommodation in the capital as well as St Pancras Way and Hayloft Point in Aldgate, also said it was committed to four development schemes totalling £339 million in costs.
Its portfolio was valued at £1.9 billion, down 0.1% on a like-for-like basis during the quarter ended on March 31.
Richard Smith, chief executive officer, said: “The supply of purpose-built student accommodation cannot keep pace with growing student demand at the same time as ... landlords are leaving the sector.”
US inflation and Fed minutes in focus, FTSE 100 seen flat
07:38 , Graeme Evans
Any cheer over an expected drop in the headline US inflation rate to 5.2% for March is today expected to be offset by the latest reading for core prices.
This is likely to have crept up to 5.6% on an annual basis, adding pressure on the Federal Reserve to hike interest rates by another 0.25% next month.
As well as this afternoon’s inflation print, US traders will be studying tonight’s release of minutes from the Fed’s most recent policy meeting.
The decision to hike rates by another 0.25% was made as the US banking system went through major turbulence due to the troubles of the Silicon Valley and Signature banks.
The increased expectations for another rate hike in three weeks’ time meant Wall Street technology stock came under pressure yesterday, with the Nasdaq Composite down 0.4% and the FANG+ index of mega-cap stocks 1.45% lower.
The S&P 500 index closed flat as investors held their positions ahead of today’s inflation reading, which is expected to show the lowest headline figure since May 2021. The rate currently stands at 6%.
CMC Markets sees the FTSE 100 index opening five points lower at 7780 this morning, having risen by 0.6% in yesterday’s session.
De La Rue seeks to amend lending arrangements and defer pension contributions amid profit warning
07:21 , Simon Hunt
De La Rue is seeking to amend the terms of its loans and defer pension contributions after it sounded the alarm on its expected profits.
The Basingstoke-based banknote printer said its expected profits would be below market expectations as it warned: “the demand for banknotes has been at the lowest levels for over 20 years.”
De La Rue said: “The Company is in discussions with its lending banks in relation to seeking an amendment to its banking covenants, reflecting the revised outlook and also reflecting the increase in the Company’s funding costs resulting from higher Bank of England base rates.
“The Company is also in conversations with the Trustee of the De La Rue Pension Scheme and has officially requested a deferral of the next £18.75m of deficit repair contributions.”
Recap: Yesterday’s top stories
06:59 , Daniel O'Boyle
Good morning. Here are yesterday’s top stories:
City figures warned that London is in danger of becoming a stock market backwater, with big floats now almost certainly heading to rival financial centres such as New York.
New Cineworld court documents reveal that it may not remain in business long enough to make it out of Chapter 11 bankruptcy protection.
Central London office lettings have stalled in the first quarter of the year despite strong demand as deals take longer to get over the line.
