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FTSE 100 Live 3 May: Index closes at another record as weak US jobs figures boost rate cut hopes

FTSE 100 Live 3 May: Index closes at another record as weak US jobs figures boost rate cut hopes

The FTSE 100 index continues to make progress after posting a new record ahead of key figures on the health of the US economy.

The non-farm payrolls report is one of the month’s most important releases for determining the next move on US interest rates.

In London, Trainline shares have surged on the ticketing firm’s annual results but Holiday Inn business IHG is trading lower despite robust quarterly figures.

Key Points

FTSE 100 closes at record again

Friday 3 May 2024 17:40 , Daniel O'Boyle

The FTSE 100 closed at 8,213.49 today, a record high.

It finished the week up another 0.9%, after last week’s huge performance.

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The index closed above 8200 for the first time, and hit an intraday high above 8240.

US cooling 'not extreme'

Friday 3 May 2024 14:33 , Daniel O'Boyle

Michael Brown Senior Research Strategist at Pepperstone, said: “The April US employment report pointed to a cooler labour market than expected, with headline payrolls growth sub-expectations, and unemployment ticking higher, as earnings pressures continued to ease.

“Nevertheless, this cooling is by no means extreme and, despite a dovish market reaction to the data, shan’t elicit any form of policy response for now.”

'US jobs figures may shift Fed's approach'

Friday 3 May 2024 13:43 , Daniel O'Boyle

Richard Flynn, managing director at Charles Schwab UK, said: “Investors will interpret today’s weak jobs report as a sign that demand is slowing in the labour market. Both markets and central bankers have been looking for evidence that disinflation may be ahead, and today’s figures could indicate that the economy is slowing down.

“In recent months, it has become clear that the Fed is happy to move slowly in the cutting part of the rate cycle, but unwanted and unexpected weakness in the economy, as we are seeing today, may cause a shift in this approach. A dive in the labour market may be what it takes to push the Fed from a stroll to a sprint.”

FTSE surges on weak US jobs numbers

Friday 3 May 2024 13:40 , Daniel O'Boyle

The FTSE 100 has surged on the back of that slack US jobs report, in the hope that the labour market cooling means interest rate cuts could be coming sooner than previously thought.

London’s top flight is now up 0.8% for the day at 8,240.16.

US jobs disappoint

Friday 3 May 2024 13:38 , Daniel O'Boyle

US payrolls missed expectations - breaking the trend of blowout jobs reports - in April.

The world’s biggest economy added 175,000 jobs, less than the expected 240,000, and well below the 303,000 in March.

Unemployment rose to 3.9%.

In comes after a surprising slowdown in GDP growth in the first quarter.

London falls out of top 20 in 2024 global IPO destination rankings — tied with Kazakhstan

Friday 3 May 2024 13:09 , Daniel O'Boyle

The London Stock Exchange has today fallen out of the top 20 global IPO destinations of 2024, having raised only as much money as Kazakhstan's stock market, the Standard can reveal.

Data compiled by Mergermarket for the Evening Standard shows the London Stock Exchange main market languishing in joint-20th position for money raised by new floats in the first four months of the year. The London Stock Exchange’s main market has had only one float, raising just $119 million (£95 million).

Read more here

City Voices: How British business could benefit from UK’s renewed defence focus

Friday 3 May 2024 12:39 , Daniel O'Boyle

Susannah Streeter explains why upping defence spending is important

There has been much speculation about what Rishi Sunak’s latest financial firepower pledge for our armed forces will mean for London-listed companies. Upping the defence spending commitment from 2.3% to 2.5% of GDP is clearly important on many levels.

It’s a rearguard action, in the event that Donald Trump returns to the White House, and renews threats to withdraw support for NATO if other members don’t increase military budgets. It’s a sign of the extent to which Russia is perceived as a chronic threat to Europe, and how allies needs to rally together, not just with rousing speeches, but hard and fast cash.

Read more here

City Spy: Does the PR industry have an AI problem?

Friday 3 May 2024 12:10

The Standard City Desk scribes have detected a strange phenomenon in recent weeks: a surge in emails from PRs containing the word ‘delve’.

This curious trend doesn’t seem confined to us. The word is popping up everywhere. As one academic observed, for example, the proportion of articles using ‘delve’ on research site PubMed is up 10 to 100 times this year on a couple of years ago.

And it seems to be because of AI.

How bad has its adoption got in the PR world? Spy delved into the data.

Read more here

UK services sector grows at fastest pace for nearly a year after spending boost

Friday 3 May 2024 11:27 , Daniel O'Boyle

Activity in the UK’s services sector increased at the fastest rate in nearly a year in April, strengthening hopes that the economy is pulling itself out of a shallow recession, according to new data.

The S&P Global UK services PMI survey scored 55.0 in April, up from 53.1 in March and the highest level since May last year.

It came in ahead of the reading of 54.0 that economists were expecting.

Read more here

Pennon’s south-east England water firm deal could harm regulation, says watchdog

Friday 3 May 2024 11:00 , Daniel O'Boyle

Britain’s competition watchdog has said Pennon’s buyout of Sutton and East Surrey Water (SES) could hurt the regulator’s ability to compare water companies.

The Competition and Markets Authority (CMA) said the deal could undermine Ofwat’s authority as water regulator, by wiping SES from its dataset.

This would reduce the number of comparators available for it to estimate cost allowances and set service quality targets, it said in a May 3 notice.

Read more here

Asda refinances £3.2 billion debt at higher interest rates

Friday 3 May 2024 10:29 , Daniel O'Boyle

Asda has refinanced its billion-pound debt pile as the supermarket seeks to put its finances on a stronger footing after the billionaire Issa brothers and private equity firm TDR saddled the firm with loans when they bought it from Walmart in 2021.

The firm said it successfully raised £1.75 billion of senior secured notes at a rate of 8.1%, up from a previous senior secured notes rate of 3.25%, and refinanced its £900 million Term Loan B, which was secured at a EURIBOR+4.25% interest rate, an increase on the previous loan of EURIBOR+2.75%. The new senior secured notes and term loan are set to mature in 2030 and 2031, respectively. Asda also used £300 million of balance sheet cash to reduce gross debt.

Read more here

Trainline profits double on European success

Friday 3 May 2024 09:09 , Daniel O'Boyle

Shares in the Trainline surged today as the rail ticket selling platform’s mainland European success continued , and helped the business double its profits.

The company said it has reaped the benefit of greater competition in the European railway market, as it has become the price comparison platform of choice for most customers.

Profits rose from £22.1 million in the year to February 2023 to £48.1 million in 2023-24.

Jody Ford, CEO of Trainline said: "New entrant carrier competition is revolutionising rail in Europe as more customers benefit from greater choice, lower prices and the opportunity to choose greener travel. We are becoming the aggregator of choice in the UK and internationally and are delivering strong growth, particularly in those markets liberalising fastest such as Spain.”

The business said it could get a boost from competition on the London-to-Paris route, where companies like Evolyn and Virgin Trains hope to rival the Eurostar..

Anglo American leads stronger FTSE 100, Trainline shares up 7%

Friday 3 May 2024 08:32 , Graeme Evans

Takeover speculation has given another lift to Anglo American shares, up 3% or 78.5p to 2740p as the best performing stock in the FTSE 100 index.

Interest in the BHP bid target was fuelled by reports that Glencore is weighing up its options over a possible approach. Glencore shares fell 9p to 449.7p at the bottom of the FTSE 100.

London’s top flight rose 25.96 points to the brink of a new record at 8198.11, with gambling stocks Flutter Entertainment and Entain among other risers.

InterContinental Hotels and packaging group Mondi were about 1% lower following their first quarter updates.

The FTSE 250 index improved 14.82 points to 20,067.15, boosted by Trainline surging 7% or 22p to 323p after the ticketing firm’s annual results.

Brent Crude price set for 5% weekly decline

Friday 3 May 2024 07:56 , Graeme Evans

Brent Crude today traded at $83.79 a barrel, representing a fall of more than 5% this week.

The decline accelerated after figures showed bigger-than-expected US crude oil stockpiles, while geopolitical pressures responsible for last month’s price surge have eased.

The demand outlook has also been impacted by the increased likelihood of US interest rates staying higher for longer.

The developments mean Brent Crude is at a seven-week low, having risen from $72 a barrel to above $90 between December and last month.

Apple shares surge on strong results and buyback

Friday 3 May 2024 07:41 , Graeme Evans

Apple shares are set for a strong session on Wall Street after the iPhone maker declared its biggest share buyback alongside second quarter results.

The company posted quarterly revenues of $90.8 billion (£72.4 billion), down 4% from a year ago but ahead of Wall Street forecasts after a record Services performance offset a 10% decline in iPhone sales.

Net income of $23.6 billion (£18.8 billion) was 2% lower but extended the company’s run of beating expectations to a fifth quarter.

It is paying a dividend of 25 US cents a share, up 4%, and will also spend $110 billion (£87.7 billion) on its largest ever repurchase of shares. Apple rose 6% in after-hours dealings last night.

AJ Bell analyst Dan Coatsworth said: “The results give the tech giant some breathing space after the market started to question if it had lost its way.

“However, many of the core problems remain and it has simply bought itself some time rather than found a full solution.”

He highlighted slowing momentum with iPhone sales, particularly in China where competition has been fierce for handsets, and pressure on the company to show how it intends to deploy AI.

IHG to get big profit boost as it devotes less to system fund

Friday 3 May 2024 07:21 , Daniel O'Boyle

Holiday Inn owner IHG says it will get a $25m profit boost this year, and $50m after that, as it devotes less money to its fund to support franchisees.

The business will make changes to its system fund, which is used for marketing its franchised hotels and delivering its loyalty programme for them.

The changes include reducing the amount of revenue from the sale of its loyalty points that are paid in.

Revenue per available room up 2.6% globally, 2.4% in UK as prices remain "robust".

CEO Elie Maalouf said: “The combined power of our platform and efficiency of our operating model will continue to drive IHG forward. We are excited about the future and our ability to capitalise further on our strengths, scale and leading positions, and on the attractive, long-term demand drivers for our markets.”

FTSE 100 seen near record, US jobs report and Apple results in focus

Friday 3 May 2024 07:17 , Graeme Evans

The FTSE 100 index is in position for another intraday record after IG Index forecast that London’s top flight will open about 18 points higher at 8190.

That’s within ten points of the all-time high set this week and follows yesterday’s latest session of outperformance, when the FTSE 100 added 0.6% to set a record close.

Today’s improvement comes amid an improved mood on Wall Street after the S&P 500 index last night rose 0.9% and the Nasdaq finished 1.5% higher.

Apple shares added 2% before lifting 6% In post-bell dealings as traders reacted to its biggest ever buyback of shares alongside second quarter results.

US futures are pointing higher ahead of this afternoon’s monthly non-farm payrolls report, which is expected to show the addition of 232,000 jobs compared with 303,000 in March.

Recap: Yesterday's top stories

Friday 3 May 2024 06:49 , Simon Hunt

Good morning from the Standard City desk.

Yesterday, Coutts, a blue blooded bank with royal connections going back more than 300 years, is to drastically reduce its fund’s exposure to UK equities and bonds from around 20% to a typical 3% or 4%.

Coutts chief investment officer Fahad Kamal is refreshingly frank in his assessment, pointing out that the British market has not really moved on in 100 years, while the US exchanges are full of companies “not existing 20 years ago”.

A little harsh perhaps but there is something in it. But if the investment allocation logic is impeccable, the optics are terrible.

If a financial institution at the heart of the British establishment for centuries is giving up on UK equities what hope is there for turning around the disinvestment flood that is draining London?

The Coutts decision will not be the last. London should have a stock market the country can be proud of, attracting investment that can rev up the UK economy. It is not fulfilling that role.

~

Here’s a summary of our top headlines from yesterday: