Yahoo Finance FTSE 100 Live: Share rally fades; gilt yields surge yet again; JD Sports and Boots offer high street boost
An initial boost for the FTSE 100 has faded, losing gains seen earlier after positive comments on China’s economy by Premier Li Qiang.
Fintech unicorn Wise reported a tripling of profits before its top two executives step aside, while JD Sports reported strong performance on the UK high street but disappointing North American sales.
Short-dated gilt yields hit yet another 15-year high, with the two-year gilt yielding 5.18%.
FTSE 100 Live Tuesday
More Odey funds suspended
JD Sports targets £1bn profit
Two-year mortgage rates exceed 6.25%
FTSE closes at 7,461.46
Tuesday 27 June 2023 16:53 , Daniel O'Boyle
The FTSE 100 closed at 7,461.46 today, up 0.1%, after early gains faded.
Two-year gilt yields, meanwhile, surged further to new 15-year highs.
Gilt yields surge again
Tuesday 27 June 2023 15:46 , Daniel O'Boyle
Short-dated gilt yields have surged even further, with the two-year gilt now yielding 5.22%.
Yields had already broked 15-year highs again this morning, but the latest rise comes as markets see the chances of interest rates hitting 6.25% as increasingly likely.
The rise is likely to mean more pain for mortgage-holders as fixed deals will increase in price even further.
Boots adds lipstick and eyeliner to UK’s monster inflation
Tuesday 27 June 2023 14:53 , Michael Hunter
Rising sales at Boots, the high street chemist, came as the latest sign of sustained consumer spending in the UK as the Bank of England struggles to tame inflation with interest rate hikes.
Retail sales were up by over 13% in the third quarter to the end of May across the chain. It has around 2,200 shops across the country and claims that means around 85% of the population live within a 10 minure walk of a Boots. Its Everyday Essentials range drove the trend, up 40% . Boots launched a Future Renew range from its No7 brand, which sold one product every two seconds on its launch day.
There are several branches within easy reach of the Bank of England’s Threadneedle Street headquarters, with Boots located on Bishopsgate, Cheapside and Cannon Street.
The update may make for uneasy reading for the BOE’s embattled governor, Andrew Bailey, and the Monetary Policy Committee. They are having trouble taming inflation after 13 consecutive interest rate hikes took base rates to 5%, up by a supersized half a percentage point last time.
Manchester United eyes record revenue as sale talks stay stalled
Tuesday 27 June 2023 14:20 , Michael Hunter
Manchester United has lifted its profit outlook for the year, as the Premier League football club continues to keep its fans waiting on the potential sale of the club.
Current owners, the Glazer family, have been looking through rival offers for weeks. There are thought to be two names on the shortlist: the billionaire founder of Ineos Chemicals and lifelong fan Jim Ratcliffe and Sheikh Jassim Bin Hamad Al Thani of Qatar.
The commercial fortunes of the club are on the up as the sale looms. United is on course for a record revenue year, upping its forecasts to range between £630 million and £640 million from a £590 million to £ 610 million range previously. Earnings are now expected at between £140 million and £150 million.
Its third-quarter operating loss narrowed to £4.7 million from £22 million
Market snapshot as FTSE 100 falls
Tuesday 27 June 2023 14:03 , Daniel O'Boyle
Take a look at all the key market data
London property giants secure West End office pre-let deals
Tuesday 27 June 2023 11:46 , Daniel O'Boyle
Two London property giants have pointed to good demand for prime central London offices as they revealed pre-let deals, including one for space behind the world famous Piccadilly Lights.
FTSE 100 company Landsec and West End landlord Grosvenor gave the updates on lettings at their respective developments: Lucent by Piccadilly station and 65 Davies Street above the Bond Street Elizabeth Line station.
A St James’s based hedge fund is upsizing its UK headquarters and has signed for 50,000 square feet across two floors at Lucent.
BT shares fall 4%, China optimism lifts FTSE 100
Tuesday 27 June 2023 10:27 , Graeme Evans
BT shares have fallen 4% or 5.35p to 122.3p after UBS switched its recommendation to “sell” with a lower price target of 120p.
The City firm said it assumed BT will need to halve its dividend to 3.85p as higher interest rates increase pressure on cash flows.
UBS forecast that BT’s annual borrowing costs will be more than £900 million over the next three years without a dividend cut.
A reduction would deal another blow to BT’s army of retail shareholders, who saw the payout ditched completely during the pandemic. It returned in February 2022, with 5.39p a share next due in accounts in September after an earlier interim award of 2.31p.
The shares touched 160p in April but support from the stake building of French billionaire Patrick Drahi has been offset by rising debt costs and ultra-competitive conditions in a slower UK economy.
The selling for BT shares came in a better session for the FTSE 100 index, which added 12.63 points to 7466.21 following comments on China’s economy by Premier Li Qiang.
He forecast stronger growth in the second quarter and boosted hopes for further policy stimulus. That lifted a range of Asia-focused stocks, with Prudential 17p higher at 1093.5p and Standard Chartered up 9.6p to 667.6p.
The FTSE 250 index rose 46.05 points to 18,020.72, led by a return to form for Telecom Plus as it posted record results showing a 55% jump in profits to £96.2 million.
The Utility Warehouse company, which helps households to save on bills through bundled utility services, jumped 10% or 150p to 1660p after also forecasting double-digit percentage customer growth in the current year.
The shares are still a long way from the 2,500p seen last November, having been one of 2022’s best performing mid-cap companies. Other FTSE 250 risers included cruise ship operator Carnival, which reversed yesterday’s big fall with a gain of 40.2p to 1015p.
More Odey funds suspended
Tuesday 27 June 2023 10:15 , Simon English
ODEY Asset Management is suspending its flagship hedge fund as investors pull money out of the firm in the wake of the assault allegations against founder Crispin Odey.
Odey, once a big wheel in the City and perhaps the best-known fund manager, is facing claims that he sexually assaulted 13 women over 25 years of misconduct.
The Financial Conduct Authority is investigating the claims, which Odey, a prominent donor to the Conservative Party, denies.
Today Bloomberg reported that the Odey European Inc hedge fund and also the OEI Mac have received hefty demands from investors looking to get their money out.
The firm, which is breaking itself up and will certainly be renamed if not disbanded, said in a note to clients: “Given the level of requested redemptions, investor concentration and liquidity profile of the fund, the fund board has determined that it would not be in the best interests of the fund and its shareholders as a whole to continue to permit issues and redemptions of shares.”
Odey European is Crispin Odey’s best-known vehicle. At times its performance has been stellar, at others returning far below the stock market.
Last year it made a return of more than 150% as Odey bet against UK government bonds which he thought would be eroded by inflation.
He successfully bet against the high street banks in the run up to the 2008 financial crash.
JD Sports set for £1 billion in profits
Tuesday 27 June 2023 09:59 , Daniel O'Boyle
JD Sports today said it is on track for £1 billion in profits this year, the latest strong news from the high street.
That follows firm updates from Primark and Next, which are good for retailers in general but increase concern that inflation is unlikely to fall any time soon. Next said people had spent pay rises on new clothes. Today JD, ahead of its AGM, said sales in May rose at 8%. There is a slowdown in the US.
The statement said: “The positive trends have continued through June in the Group’s businesses in the UK, Europe and Asia Pacific although the growth from these regions is partially offset by the businesses in North America which are experiencing some softening in trade consistent with other businesses in the sector.”
It added that profits for the year should be about £1.04 billion.
The shares lost 7p to 139p early today as City hopes of even higher profits were dashed
Two-year mortgage rates exceed 6.25% with more products pulled
Tuesday 27 June 2023 09:34 , Daniel O'Boyle
The number of mortgage products on offer fell to another three-month low as two-year fixed rates rose further to 6.26% today, according to new data from Moneyfacts.
The average two-year fixed rate was up from 6.23% yesterday, while the average five-year rate ticked slightly up to 5.87%.
The total number of products on offer fell to 4,426, the lowest since March.
Buy-to-let rates were also up, with a two-year buy-to-let fix breaking the 6.5% barrier while five-year buy-to-let rates are 6.41%.
Supermarkets to be quizzed by MPs amid pressure to pass on wholesale cuts
Tuesday 27 June 2023 09:28 , Daniel O'Boyle
Supermarket senior executives are being questioned by MPs on Tuesday over eye-watering food inflation as the latest figures add to hopes that price hikes have passed the peak.
Food bosses at four of the UK’s biggest supermarket chains – Tesco, Sainsbury’s, Asda and Morrisons – are appearing in front of the Business and Trade Committee on Tuesday to discuss food price inflation and why prices are still rising when commodity and wholesale costs are dropping.
Miners lead FTSE 100 higher, BT and JD Sports under pressure
Tuesday 27 June 2023 08:46 , Graeme Evans
Stronger mining stocks Glencore, Antofagasta and Anglo American are leading the recovery for the FTSE 100 index, which stands 24.84 points higher at 7478.42.
The trio improved 2%, alongside gains of 9.6p to 540.2p for online grocer Ocado and 21p to 1097.5p for Asia-focused insurer Prudential.
JD Sports Fashion led the fallers board, dropping 5.7p to 140.9p after its AGM trading update. The retailer stuck by full-year guidance but added that trading conditions in North America have become tougher.
BT Group shares were 3.6p cheaper at 124.05p after analysts at UBS gave the telecoms group a “sell” recommendation and a new lower target price of 120p.
The FTSE 250 index improved 101.46 points to 18,076.13, led by a turnaround for Utility Warehouse company Telecom Plus on the back of another set of record annual results. The shares were 6% or 98p higher at 1608p but had been near to 2500p last November.
Grainger reports properties almost 99% occupied in rental market squeeze
Tuesday 27 June 2023 08:23 , Daniel O'Boyle
There was a further sign of the impact of low supply on the UK’s rental market today as build-to-rent landlord Grainger said its occupancy rate had hit a new high, just short of 99%.
The landlord - whose CEO last month told the Standard the firm would benefit from high inflation thanks in part to the low levels of supply in the market - reported that its properties were now 98.7% occupied, up from what were already record levels earlier in the year.
It also reported a further 7.1% rental growth for the year to date.
Helen Gordon, Chief Executive of Grainger, said: “Momentum in the business is continuing as we move into the peak summer lettings season and the launch of 7 new schemes in the remainder of 2023.
“Occupancy remains at record levels at over 98% and like-for-like rental growth across our national portfolio is continuing to build whilst remaining mindful of overall customer affordability levels.”
Profits soar at Utility Warehouse, powered by household scramble to control bills
Tuesday 27 June 2023 07:47 , Michael Hunter
The owner of the Utility Warehouse, which bundles energy, mobile broadband and insurance services into one monthly bill, reported a surge in annual revenue and profit today as households sought savings during the cost-of-living crisis.
Telecom Plus reported a 55% rise in pre-tax profit of £96.2 million for the year to the end of March, from revenue of almost £2.5 billion, up over 155%.
Its customer base rose by over a fifth to almost 887,000.
Alongside the result, Telecom Plus’ co-CEOs, Andrew Lindsay & Stuart Burnett said: “With reduced government support, rising mortgage costs and continuing high inflation, the need for households to make savings across all their essential utilities has never assumed such high importance.”
Wise bosses leave firm in good shape as they prepare exit
Tuesday 27 June 2023 07:40 , Daniel O'Boyle
The two leading executives of top London fintech Wise appear to be leaving the firm in good condition as profits jumped another 73%, while more than £11 billion was deposited with the unicorn’s new bank account offering.
The group made £146.5 million in profit, as total revenue from transfers and interest came to £964.2 million. That included £118.2 million in account interest income, after bank accounts were launched late last year. The group has started paying interest on its bank accounts.
“This is particularly relevant today, given how the interest rate environment has changed over the last year,” CEO Kristo Käärmann said.
Both Käärmann and CFO Matt Briers are set to exit, as founder Käärmanntakes a temporary sabbatical while Briers will leave as he recovers from a bicycle accident that occured last year.
FTSE 100 seen higher, Wall Street tech stocks under pressure
Tuesday 27 June 2023 07:15 , Graeme Evans
Technology stocks were hit by heavy selling on Wall Street yesterday, with Facebook owner Meta Platforms and semiconductor giant Nvidia finishing down 4%.
The wider Nasdaq Composite lost 1.1% as investors banked profits after a recent strong run for tech and high growth stocks.
The S&P 500 index fell 0.4% and the Dow Jones Industrial Average was broadly unchanged as the threat of more interest rate rises continues to impact sentiment across global markets.
The FTSE 100 finished 8.29 points lower last night but that represented a recovery from the 60 point fall seen earlier in the session. CMC Markets expects London’s top flight to open 22 points higher at 7475 today.
The improvement reflects a decent session for most Asian markets, although weaker technology stocks left Japan’s Nikkei 225 about 0.3% lower.
Yesterday’s top stories
Tuesday 27 June 2023 06:57 , Daniel O'Boyle
Good morning, here are some of yesterday’s top stories:
Sales at Primark were up, in a boost to the high street but also a potentially worrying sign on inflation
Aston Martin will change the supplier of powertrain components for its electric vehicles from Mercedes to Lucid, ending a deal with Mercedes where it would have issued the German titan shares
HSBC is the latest business that is set to leave Canary Whharf for the City, exiting its iconic tower in 2027
