Yahoo Finance FTSE 100 Live 7 August: Tech stocks boost Wall Street gains as banks and builders boost index recovery in London
A stronger session for the FTSE 100 index today boosted confidence after Monday’s turmoil.
WPP, Glencore and Legal & General are among the blue chips in the results spotlight.
Housebuilding stocks were also lifted by today’s rise in the Halifax house price index.
FTSE 100 Live Wednesday
House prices up in July
Novo Nordisk sales jump
Glencore to keep coal business
Airbnb shares slide on warning over cautious US consumers
14:57
Airbnb shares have fallen as much as 14% in the first minutes of trade on Wall Street after the bookings app warned on cautious US consumers.
CFO Ellie Mertz told investors: “Over the last couple of years, as we emerged from COVID, there were several periods where we saw some volatility in terms of overall lead times, and in particular, some hesitancy for consumers to book those longer lead time trips.
“I suspect that's what we're seeing right now, and I would say, the silver lining with regard to the trends that we see right now, it's not that consumers are not necessarily going to book that trip for Thanksgiving or Christmas, it just appears that they have not booked it yet.
“So, we're closely following all of the trends on lead times, but it is a factor that influence the outlook that we've provided.”
Wall Street stocks rebound
14:46 , Simon Hunt
Stocks made gains in the opening minutes of trade on Wall Street, led by a tech stock recovery in signs volatility that began last week was coming to an end.
The S&P 500 rose 53.1 points, or 1.01%, at the open to 5,293.13, while the Nasdaq Composite rose 255.5 points, or 1.56%, to 16,622.31 at the opening bell.
But the Nasdaq remains down 5.5% over the past week and the S&P 500 down 4%.
Apple shares reversed much of yesterday’s losses, rising 5% today, while chipmaker Nvidia was up more than 3%. The UK-based chip designer Arm rose more than 5%.
David Morrison, Senior Market Analyst at Trade Nation, said: “Today’s moves build on yesterday’s gains which saw all the majors add on around 1% each, to mark the first positive session since this time last week. This is an encouraging start.
“But it’s worth noting that there was a significant pullback in the last two hours of last night’s trading. This was led by the tech sector, and saw both the NASDAQ 100 and the S&P 500 give back around 2% of earlier gains. So there will be some relief that equity markets are on the front foot first thing. But will they be able to keep up the positive momentum into the US open and beyond?”
Improving mood holds across London stock market as New York heads for opening gains
13:19 , Michael Hunter
The rebound on global stock markets is taking firmer hold into the start of US trade, with New York’s main index on course for opening gains.
According to futures trade, the S&P 500 will rise by over 50 points when full business starts, enough to take it around 1% higher.
London’s FTSE 100 is up by over 1%, rising over 90 points to 8118.77, in line with the wider recovery as ripple effect of worries over a potential recession in the US eases.
David Morrison, senior market analyst art Trade Nation, said the pattern raised hopes that the turbulent sell off was now “in the rearview mirror”, before sounding a note of caution:
“It’s worth noting that there was a significant pullback in the last two hours of last night’s trading. This was led by the tech sector, and saw both the Nasdaq 100 and the S&P 500 give back around 2% of earlier gains.
“So there will be some relief that equity markets are on the front foot first thing. But will they be able to keep up the positive momentum into the US open and beyond?”
City Comment: Why Reeves' pension plan matters
12:19 , Jonathan Prynn
Rachel Reeves’s feet have hardly touched the ground since she became Britain’s first female Chancellor only just over a
month ago.
Today she is in Toronto meeting the so-called Maple 8 group of leading Canadian public sector retirement funds.
She is there to “learn lessons” from a Canadian model that concentrates huge investment firepower in the hands of just a few consolidated pension funds.
It is in stark contrast to Britain’s messy hodge podge of more than 200 public sector schemes, including those for local authorities, as well as national public service bodies such as the Army.
There is certainly a case for consolidation, both to save on massive duplication of administration costs, but perhaps even more importantly to give the funds the critical mass they need to make serious long-term investments in UK plc, including infrastructure and fast growth companies in fields such as tech and life science.
The Chancellor says she wants UK pension funds to “fire up the British economy” reversing a long-term trend of disinvestment that has seen pensions funds’ share of ownership of UK-listed shares plummet from 32% as recently as 1992, to just 1.6% now.
That is a shocking statistic and anything that can turn it around has to be welcomed.
Reform of Britain’s fractured public sector pension fund landscape is long overdue but will not be an easy task ... And even the Canadians do not get it right all the time.
It is worth bearing in mind that a Toronto-based constituent of the Maple 8, the Ontario Municipal Employees Retirement System — better known as OMERS — made one of its
biggest UK investments in what has turned out to be one of Britain’s most spectacular corporate basket cases: Thames Water.
Ibstock shares build gains as brightening prospects outshine drop in profit
11:59 , Michael Hunter
Shares in Ibstock, the bricks and buildings products maker, are higher as brighter hopes for the house house market outshine gloomier news on sales and profits.
Both of those fell. Sales were down by a fifth to £178 million, under the £204 million expected in the City. Profit was down two-fifths to £38 million.
But Ibstock added its voice to predictions that the industry may have turned a corner.
“The new government's focus on accelerating the delivery of new housing and infrastructure is expected to form a more positive backdrop for housing industry supply chains and effective demand over the medium term,” it said.
Shares in the firm added 9p, or 5%, to 181p.
FTSE 100 higher as bank and housebuilding shares improve
10:13 , Graeme Evans
The FTSE 100 index today rose 50.10 points to 8076.79, still some way off the 8391 seen before US recession fears and a 12% slump for the Nikkei 225 rocked confidence.
Tokyo’s leading benchmark today recovered another 1% after multinational stocks benefited from a weaker yen, while Wall Street markets finished in positive territory last night.
NatWest rallied 7.9p to 330.9p among today’s blue-chip frontrunners, having fallen sharply since last Thursday.
Barclays also ended its post-results sell-off by putting back 4.75p to 212.95p and Lloyds Banking Group cheered 1.1p to 56.2p. Asia-focused Standard Chartered led the top flight, up 3% or 18.8p to 705.8p.
Housebuilders Vistry and Persimmon also occupied the leading positions in the FTSE 100, rising 33p to 1303p and 35p to 1535.6p respectively after the latest Halifax house price index showed a 0.8% monthly rise.
The FTSE 250 index rose 126.27 points to 20,493.97, led by a 8% jump for TP ICAP after the interdealer broker reported a 10% rise in adjusted profits to a record £160 million. Its shares lifted 17p to 228p.
A half-year profits milestone for Quilter also fuelled a rise of 3.4p to 130.9p, with sentiment towards the wealth manager further helped by a 164% uplift in core net inflows to £1.7 billion.
FTSE 100 adds 0.7%, banking stocks recover lost ground
08:25 , Graeme Evans
Banking stocks are enjoying a stronger session as the FTSE 100 index continues to show signs of recovery after Monday’s heavy sell-off.
NatWest rose 8p to 331p, Lloyds Banking Group lifted 1.1p to 56.3p and Barclays rallied 4p to 212.2p as the sector recovers some of the ground lost since last week.
The FTSE 100 index is 0.7% or 57.59 points higher at 8084.28, still some way short of the 8391 seen last Thursday.
Among companies reporting today, Legal & General shares were flat at 217p, Glencore fell 2p to 391.1p and WPP dipped 12.2p to 704.8p.
The FTSE 250 index rose 132.47 points to 20,500.17, although half-year results left building materials firm Ibstock and corporate merchandise business 4imprint down 1% and 2% respectively.
Glencore to keep coal business while group earnings drop by a third as commodity prices retreat
07:57 , Michael Hunter
FTSE 100 mining giant Glencore said it would keep its coal business today, as it revealed the impact of lower commodity prices today, reporting a drop of a third in profit.
Adjusted earnings fell to $6.3 billion, down 33%.
Gary Nagle, its chief executive officer, said the drop came “against the backdrop of lower average prices for many of our key commodities during the period, particularly thermal coal”.
The £47 billion firm’s decision not to sell its coal business came after what Nagle called the “overwhelming majority” of shareholders backed retaining it.
“This was primarily on the basis that retention should enhance Glencore's cash-generating capacity to fund opportunities in our transition metals portfolio, such as our copper growth project pipeline, as well as accelerate and optimise the return of excess cash flows to shareholders,” he said.
Group-wide revenue rose 9% to $117 billion.
L&G's assets under management slip but it ups payout and hails 'stable' performance
07:41 , Michael Hunter
Legal & General has reported a slip in assets under management and profit after tax for the first half of 2024, with parts of its annuity portfolio taking a hit from rising interest rates.
But the insurer hailed what it called a “stable” performance and its “strong solvency” and increased its payout for investors.
One of the best-known names in the City – and one of its biggest asset managers – L&G has around 10 million customers with savings, life insurance and and retirement plans. It was founded by six lawyers in 1836.
Today, it reported that assets under management of £1.136 trillion, down from £1,170 trillion. Within that, its “Private Markets” assets rose to £52 billion from £48 billion.
Profit after tax fell to £223 million from £377 million in the same period a year ago. Its “core operating profit” ticked higher, to £849 million from £844 million.
Its move into corporate pensions continued at pace, with £5 billion’s worth of business in from “pension risk transfers”, or PRTs, where the firm takes on responsibility company retirement schemes. L&G said there was also £24 billion in “active UK PRT deals” .
A key industry safety measure, the “solvency II coverage ratio” came in at 223% for L&G, with a surplus of £8.8 billion.
It upped its payout for investors, lifting its dividend by 5% to 6p per share. It also said it would return £200 million to them via a share buyback this year, which it said would be followed by “similar” schemes.
“The board intends to return more to shareholders over the period 2024-27 through a combination of dividends ... and buybacks”, it said.
António Simões, L&G’s chief executive, added:
“These results reflect the ongoing strength of our business, with core operating profit slightly ahead of the prior year and a solvency coverage ratio of 223%. We continue to expect 2024 core operating profit to grow by mid-single digits year-on-year.”
Sales soar for Ozempic maker Novo Nordisk
07:37
A surge in demand for weight loss drug has helped Novo Nordisk post a 25% jump in revenues in the first half of the year, the Danish company said today.
The Bagsværd-based pharma giant said it had seen a 48% rise in sales of its Ozempic treatment in the US, and a near one-third rise in sales worldwide, to hit 56 billion Danish Krone (£6.5 billion).
Lars Fruergaard Jørgensen, president and CEO, said: "We are pleased with the sales growth in the first half of 2024, which has enabled us to raise the outlook for the full year. The growth is driven by the increased demand for our GLP-1-based diabetes and obesity treatments, and we continue to reach more patients with our innovative treatments.”
House prices rise 2.3% says Halifax
07:37 , Jonathan Prynn
The property market picked up last month after the decisive election result cleared political uncertainty with prices rising at their fastest pace since January.
Latest figures from Halifax show the average price of a home in the UK rose 2.3% in the year to July to reach £291,268.
Average London prices went up only 1.2% to £536,032.
Halifax head of mortgages Amanda Bryden, said: “Last week’s Bank of England’s base rate cut, which follows recent reductions in mortgage rates, is encouraging for those looking to remortgage, purchase a first home or move along the housing ladder. However, affordability constraints and the lack of available properties continue to pose challenges for prospective homeowners.
“Against the backdrop of lower mortgage rates and potential further base rate reductions, we anticipate house prices to continue a modest upward trend throughout the remainder of this year.”
China export figure disappoints, imports surge
07:36 , Graeme Evans
China’s economy continues to deliver a mixed performance after trade figures today showed export growth slowed to 7% in July.
This compares with the 9.7% forecast and follows a rise of 8.6% the previous month. However, the figure has beaten expectations in 11 out of the last 13 months.
Imports rose 7.2% from a year earlier, much more than expected after June’s 2.3% decline.
July’s trade surplus stood at $84.65 billion, down from $99 billion in June.
WPP offloads FGS stake for £611 million
07:16 , Simon Hunt
Marketing giant WPP has sold its stake in PR firm FGS in a £611 million deal.
Private equity business KKR has acquired WPP’s 50% stake in the company in a deal which values it at £1.3 billion. KKR had already acquired a minority interest in the business in July last year.
Mark Read, CEO of WPP, said: " have achieved an attractive price, enabling WPP to accelerate the crystallisation of the significant value created. This also provides WPP with greater financial and management flexibility.”
The deal is set to conclude before the end of the year.
Wall Street recovery set to boost FTSE 100, Airbnb shares slide
07:09 , Graeme Evans
A recovery for Wall Street shares means the FTSE 100 index is forecast to open more than 1% higher, having finished up by 0.2% yesterday.
The stronger session in the US left the S&P 500 and the Nasdaq up by 1% at the close, alongside a rise of 0.8% for the Dow Jones Industrial Average.
Nvidia put back 4% after recent heavy losses, while Facebook owner Meta Platforms also improved 4% and Tesla by 1%.
Airbnb rose in 4% regular hours, only to fall 16% in post-bell dealings after third quarter revenues guidance disappointed amid shortening booking lead times.
In Asia, a strong performance by financial stocks helped the Nikkei 225 to rise 3% in a second stronger session since Monday’s 12.4% reverse.
Recap: Yesterday's top headlines
06:53 , Simon Hunt
Good morning from the Standard City desk.
The line up of potential culprits for this week’s markets squall is a long one: sticky interest rates, the weakening US economy, the AI tech boom, the yen carry trade, the beaches that have kept older wiser desk heads away from their screens.
As so often it was probably a self-reinforcing combination of these and many other factors that set off the stampede rather than a single trigger.
Yesterday was a quieter but, once out of the bottle, that gnawing feeling of near panic is difficult to contain. I would expect markets to remain jittery over the coming months with events in the Middle-East capable of ratcheting up the volatility index to new heights.
It is, of course, pure coincidence that the Bank of England produced its latest report on so called “resolvability” in the very week when the markets demonstrated how fine the margin can be between apparent stability and uncontrolled financial fission.
It seems the Bank has been learning the lessons of the fallout from last year’s scare involving institutions as diverse as Silicon Valley Bank, Credit Suisse, and First Republic. How close that cluster came to another run on the entire system we may never know. Fortunately, the reaction from authorities and the industry was quick and decisive enough to put out all the fires.
But it was a warning, perhaps the last one we will get before the next “big one.”
~
Here’s a summary of our top headlines from yesterday:
Thames Water hit by £104 million fine from Ofwat over failings at waste water plants and storm outfalls
Profits collapse and dividend slashed at builders merchants Travis Perkins
Domino’s says Euros helped pizza orders grow again over the summer after 10 consecutive quarters of post-pandemic decline
Holiday Inn owner IHG said it hoped for calm to be restored as soon as possible after weekend riots in which its hotels were attacked
Pet spending is still growing even after big jump during the pandemic says Nationwide, with spending on petcare among its customers at £51.8 million, more than on childcare, at £37.1 million
