US inflation for October came in at 7.7% year-on-year, lower than the expected 7.9%. It’s down from the 8.2% rate recorded in September.
The Fed has unleashed a series of 0.75% rate rises in response to soaring prices, but Wall Street is looking for a more modest increase at next month’s meeting.
In London, major companies in today’s results spotlight include National Grid, WH Smith and B&M European Value Retail.
FTSE 100 Live Thursday
US inflation rate seen falling to 8%
Centrica surges on profits guidance
WH Smith boosted by US expansion
That’s all folks. Tomorrow: crucial GDP numbers
Thursday 10 November 2022 17:11 , Simon Hunt
That concludes our coverage today, on the day that US inflation data came in lower than analysts expected. The FTSE 100 closed up 73 points to 7,35, with real estate stocks climbing 7.2%.
Tomorrow we’ll report on the crucial UK GDP numbers being released -- they’ll shed light on whether the UK is entering a recession, and if so, how deep it may be.
The Evening Standard City desk will be back at 7am tomorrow.
FTSE 100 rallies after US stocks get a lift from easing inflation data
Thursday 10 November 2022 16:09 , Michael Hunter
London’s FTSE 100 was trading around its best levels of the day late in the session, after global stock markets took heart from a drop in the rate of US inflation, which sent Wall Street sharply higher.
The main UK share index was up almost 90- points at 7386.70, a rise of over 1%. The advance was led by financial stocks, with Schroders making the best single rise, of over 8% to 452.1p, a gain of 35p. St James’s Place rallied 7% to 1148p, up 75p.
Some of the sectors hit hardest in the recent sell-off sparked by fears about the outlook for aggressive rate rises rebounded. Fund manager Hargreaves Lansdown was up 7% to 885p, gaining 56p. Real estate investment trust British Land rose 24p to 406p, up over 6%. Housebuilder Persimmon rose 71p, or 6%, to 1354p.
But worries about the outlook for consumer spending proved stubborn, leaving retailers stuck at the bottom of the market ahead of closely watch economic data, due tomorrow, that could show the start of a recession in the UK.
Discount retailer B&M was the biggest single faller, down 5% at 356p, a loss of 18p. Sainsbury was down over 4%, or 32p, to 211p.
Musk’s plan for Twitter attacked by Slack boss
Thursday 10 November 2022 15:51 , Michael Hunter
Elon Musk’s plan to turn his Twitter into an “everything app” has not impressed the British-born co-founder of the corporate messaging platform Slack.
Slack’s chief technology officer Cal Henderson told the Standard that Musk “says a lot of things that are nuts and that are just a distraction from whatever’s happening to him in other channels,” adding his voice to the raging debate on the future of the social media site under the ownership of the world’s richest person.
“It would be great if Twitter can be really successful just in the market it’s in,” Henderson said. “I think that would be fantastic and a great outcome for Twitter so I’m sceptical that he can do that in a bunch of categories,” said Henderson
New York stocks surge after drop in US inflation stokes hopes for smaller Fed rate rises
Thursday 10 November 2022 14:43 , Michael Hunter
Wall Street’s S&P 500 strode higher after a drop in the rate of consumer price inflation in the US led to hopes that the Federal Reserve would adopt smaller rate rises.
The sign that the central bank’s fight against inflation could be kicking in to tame rising prices came in the run-up to the start of full stock trading. New York’s broad equities index opened up around 125 points higher, a rally of over 3% taking it to 3874.0, its highest level for the month.
As investors reacted to the data, the dollar eased from its strong rally and lost gains for the day it had notched up before the numbers came out. The index tracking the US currency was down 1.6% at 108.64. That limited its rally for the year to just over 17%.
US inflation comes in at 7.7%
Thursday 10 November 2022 13:37 , Simon Hunt
US inflation for October came in at 7.7% year-on-year, lower than the expected 7.9%. It’s down from the 8.2%. rate recorded in September.
The news has sent US stocks higher, with S&P futures up 2.5% and Nasdaq futures up 3.1%.
The dollar index dropped sharply after the inflation numbers came out, with the index tracking it a against a range of alternative currencies turning negative for the session, taking it down 1.4% for the day to 109.05.It had been climbing in the run-up to the data, reaching a session high of 110.99 before it came out.
US Jobless claims hit 225,000 last week, a 7,000 jump from the prior week and higher than market expectations of 220,000, according to Refinitiv data.
FTSE 100 down 7 points to 7,290: Lunchtime wrap
Thursday 10 November 2022 13:03 , Simon Hunt
Five hours into the trading session in London, here’s a look at some of the biggest stock moves.
The FTSE 100 is down 7 points to 7,290. Centrica is making the biggest gains today. Its shares are up almost 8% after it announced a £250m share buy back and it posted profits profits that beat City expectations.
Pressure mounts on energy giants as National Grid’s profits soar 50%
Thursday 10 November 2022 12:05 , Simon Hunt
Soaring profits at National Grid and plans for a major payday for shareholders at British Gas owner Centrica today piled pressure on the energy industry is do more to support vulnerable customers and avoid blackouts this winter.
National Grid, which operates the electricity network, pledged to raise spending on critical infrastructure to £40 billion by 2026, up from previous plans for £30 billion to £35 billion. It came as profit soared 50% to £1.6 billion.
CEO John Pettigrew told the Standard that it was a “critical time” with “investment in the energy industry absolutely essential”.
He said the company expected “sufficient generation to meet demand” and he was not expecting limits on household electricity supply, although it has well-practised emergency procedures that have been in place for “the last 20 or 30 years,” pointing out “it was not something new” to prepare for such measures, while there were “thousands of engineers” focused on preparing the grid for the winter.
Rishi Sunak’s wife Akshata Murty lands £7 million payout
Thursday 10 November 2022 11:26 , Simon Hunt
The Sunak family finances received a £7 million boost today as dividend payments go out from the Prime Minister’s father-in-law’s IT business.
Since 2020 she has now collected £35 million in dividends. Her stake in Infosys, co-founded by her father NR Narayana Murthy in 1981, is worth £594 million, according Refinitiv data.
Healthcare stocks support FTSE 100, Domino’s Pizza sales cheer
Thursday 10 November 2022 10:21 , Graeme Evans
Haleon shares were in favour today after a strong start to the cold and flu season helped lift the consumer healthcare firm’s outlook.
The GSK spin-off company, whose brands include Sensodyne and Centrum, rallied 3.25p to 289.5p after it forecast revenues growth above 8% in this financial year.
It has been boosted by strong performances in oral health and in its respiratory division, where cold and flu sales added 3% to group revenue growth in the third quarter.
Haleon has endured a difficult start to life in the FTSE 100 index, reflecting fears that consumers will trade down and uncertainty over potential exposure to Zantac litigation in the United States.
Hargreaves Lansdown fund manager Steve Clayton said investors will need clarity on the Zantac issue before the stock can display its true potential.
He added: “We like Haleon for the strength of its brand portfolio and the defensive, cash generative nature of the business.”
Haleon shares were joined on the risers board by fellow consumer healthcare stock Reckitt Benckiser, which lifted 68p to 5750p. AstraZeneca also improved 140p to 10,986p after an increase in its full-year earnings guidance.
The performance by defensive stocks from the healthcare sector ensured the FTSE 100 stayed close to its opening mark, down 12.97 points at 7,283.28.
The FTSE 250 index drifted 67.72 points to 18,581.28, with Marks & Spencer losing 4% or 4.65p to 108.45p in the aftermath of yesterday’s results. Domino’s Pizza rallied 6.8p to 251p after it revealed a strong start to the fourth quarter, with system sales up 10.4%.
WH Smith on the up in the UK -- and the US
Thursday 10 November 2022 10:05 , Simon English
WH Smith today looked on track to be one of the few UK retailers to crack America as its travel arm looks to expand across the globe and it resumed dividend payments to investors.
Under new-ish CEO Carl Cowling the retailer dubbed the worst on the high street for two years running in Which? polls in 2018 and 2019 is now looking at world expansion.
In particular the US airport arm, including the tech shops InMotion, are booming. Profits from this business will overtake those from the UK high street this year.
The company saw revenues for the year jump from £886 million to £1.4 billion, with profits of £73 million compared to a loss last time of £55 million.
Cowling says the business is in “its strongest ever position as a global travel retailer with multiple growth opportunities across the world”.
WH Smith still has 530 stores on the high street, but analysts say the company will focus investment on the travel arm. In the UK, the health and beauty offer will expand at London train stations such as Paddington. That offers serious competition to Boots.
The statement today said: “We will be trialling our one-stop-shop for travel essentials format in Rail across a further eight major Network Rail locations, including London Paddington, London Victoria and London Liverpool Street stations. Across these stores, we will be investing in new store layouts and enhancing the space afforded to categories such as health and beauty.”
In the US, its localised airport stores are now a serious rival to the main brand Hudson News, increasingly seen as outdated by retail watchers.
Tesco and M&S are among the litany of UK retailers who have made bold moves into the US market and failed.
WH Smith is confident enough to resume dividend payments, suspended during the Covid crisis that saw travel severely curtailed.
A final divi of 9.1p a share will be paid.
The strength of the American business and the weakness of the pound does flatter the results somewhat.
Broker Peel Hunt upped its forecasts, saying: “The upgrade is currency-driven but it should please the market short term: longer term we think this is a top quality business that warrants a much higher multiple as contracts are won.”
The shares rose 27p to 1314p, which leaves the business valued at £1.7 billion.
Young’s pubs tops pre-pandemic sales thanks to return to the office
Thursday 10 November 2022 09:31 , Simon Hunt
A return to office work and the arrival of a wave of new tourists in London has helped pub chain Young’s exceed pre-pandemic sales for the first time.
The Wandsworth-based firm saw revenues in Central London and the City rise 22% and 11% respectively.
Young’s boss Simon Dodd said: “Central London, the West End and the City continues to bounce back. Tourists are back, corporate bookings are back and people are working from home less.
“Whereas people were working from home two days a week and office three, we’re seeing more like four [in the office] now. We’re really cautiously optimistic.”
The firm posted a 25% jump in sales to £187 million for the six months to September, while pre-tax profits swelled 15% to £25 million.
Young’s shares rose 1.2% to 1,050p.
Centrica shares up 7%, FTSE 100 lower
Thursday 10 November 2022 08:45 , Graeme Evans
A flurry of blue-chip results and trading updates has left the FTSE 100 index 0.2% or 12.41 points lower at 7283.84.
The biggest fall came from B&M European Value Retail, whose shares dropped 6% or 22.8p to 351.3p despite its interim results pointing to unchanged full-year profits guidance.
It said trading has been good in the first six weeks of its “Golden Quarter” trading period, with like-for-like sales up 2.5% in B&M UK stores. However, it also revealed a two percentage point hit to UK margins in the first half of the financial year.
British Gas owner Centrica posted the biggest rise in the FTSE 100 after it announced plans for a £225 million buyback of shares, alongside an update showing full year earnings will be towards the top end of City forecasts.
Its shares lifted 7% or 5.5p to 83.1p, having fallen to 67p in mid-October due to speculation over a potential windfall tax on power generators. National Grid shares rose 3.8p to 990.4p after its half-year results.
Autotrader says EV sales fell after customers put off by soaring electricity prices
Thursday 10 November 2022 08:28 , Simon Hunt
Sales of electric vehicles have fallen in the last few months, the boss of Autotrader has said, as cash-strapped Brits put off by soaring electricity prices snubbed eco-friendly cars in favour of petrol and diesel motors.
Nathan Coe, CEO of Auto Trader, told the Standard: “We have seen a slow down in EVs in recent months – which we’d put down to EVs are more expensive cars and everyone is facing cost of living pressures and electricity prices have gone up.”
Autotrader saw an 11% uptick in sales over the six months to September, while profits contracted 2% to £149 million.
Autotrader shares fell 3.4% to 535p.
National Grid ups infrastructure spending target
Thursday 10 November 2022 07:58 , Graeme Evans
National Grid chief executive John Pettigrew today revealed the transmission and distribution company is planning to increase its investment in critical infrastructure to as much as £40 billion between 2022 and 2026.
This figure compares with previous guidance of £30-£35 billion and will include £29 billion to be spent directly in the decarbonisation of energy networks.
The pledge came as National Grid revealed a 50% rise in half-year underlying operating profit to £2.1 billion, driven by UK electricity distribution and higher property sales. The interim dividend is 4% higher at 17.84p a share.
Pettigrew said the company was playing its part mitigating the affordability challenges of customers, having achieved £225 million of operating cost efficiency savings.
He added: “Ensuring security of supply and affordability, while delivering net zero goals, can only be achieved with clear and stable regulatory frameworks that incentivise the timely delivery of the investment required.”
US inflation reading seen lower, core prices in focus
Thursday 10 November 2022 07:34 , Graeme Evans
The annual rate of the US consumer price index (CPI) is set to fall to 8% from 8.2% the previous month, but the biggest concern remains the stubbornness of core inflation.
While CPI has been slowly coming down from its summer peak of 9.1%, the trend for core prices continues to be upward after hitting a 40 year high of 6.6% in September.
The latest core reading prompted speculation that the Federal Reserve might hike rates by 0.75% in both November and December.
A more modest move of 0.5% is now expected next month, but Fed chair Jerome Powell has since changed Wall Street’s focus towards the duration of rate rises and the final destination of the headline interest rate.
MIchael Hewson, chief market analyst at CMC Markets, said the current earnings season showed companies are passing on increases in costs to consumers with varying degrees of success.
The question now is whether this trend is starting to embed itself in underlying core prices, squeezing consumer incomes further.
Hewson added: “Markets will be looking for evidence of a slowdown in core prices if the narrative of slowing inflation is to take hold. The rise in the US dollar does offer cause for optimism, given it acts as a brake on higher prices.”
US markets have fallen in advance of today’s figures, with declines of around 2% for the Dow Jones Industrial Average and S&P 500 also reflecting the impact of the closer-than-expected result of midterm elections.
The FTSE 100 index posted a small fall yesterday, with Hewson expecting the top flight to open 33 points lower at 7263.
Over a million customer crypto accounts at risk as Binance abandons FTX acquisition
Thursday 10 November 2022 07:28 , Simon Hunt
Over a million customer crypto accounts are at risk after crypto exchange Binance said it was abandoning its rescue takeover of rival exchange FTX.
As of Wednesday evening, the FTX website was down, making it impossible for customers to access their crypto accounts. FTX had previously suspended customer withdrawals and advised against making further deposits.
It comes just hours after reports the US finance watchdog, the Securities and Exchange Commission, was expanding its investigation into FTX amid concerns of potential securities law violations, and comes just a day after Binance said it planned to acquire the ailing company.