- FTSE 100 lifts 2 points to 8448
- Chevron to quit North Sea
- Reality stars charged for finance scam
13.45pm: Tesco recalls product as it may contain glass
Tesco shares have slipped more than 1.5% today after it went ex-dividend, however, a share price slide may be the least of management's worries.
The UK's largest supermarket has been forced to recall its sandwich pickle over the possibility it may contain glass in it.
The 295g jars of Tesco Sandwich Pickle part of batch 3254 and with a best-before date of 11 September 2025 were recalled due to concerns over traces of glass.
"This product may contain pieces of glass which makes it unsafe to eat," the Food Standards Agency warned.
Last year, the group was forced to recall sausage rolls and steak pies after it was warned they may contain pieces of metal and/or plastic.
13.26pm: Wall Street to hold at record highs
US stocks are expected to open flat on Thursday, coming off a strong Wednesday which saw both the Nasdaq and S&P 500 reach record highs as inflation data came in lighter than expected.
Now, futures for both indexes are indicating they will open higher, with the S&P 500 at 5,335 and the Nasdaq at 18,709.
In equities, Walmart pushed 6.5% higher in premarket trading after it posted its largest earnings beat in three years.
Both sales and profits soared at the retailer after a strong turnaround from its advertising operations and a rise in demand from high-income consumers.
13.06pm: UK business minister to meet with Royal Mail boss
Britian's business minister Kemi Badenoch is set to meet the chief executive of Royal Mail's owner IDS to discuss the takeover offer from Czech billionaire Daniel Kretinsky.
"[Badenoch] is meeting the chief executive officer of Royal Mail’s parent company to discuss this and other matters,” a spokesperson for Rishi Sunak explained.
Reports this morning revealed the UK government had not planned to intervene in the sale.
However, the government may be able to block the deal under the National Security and Investment Act, which a Whitehall representative said was being monitored “very closely”.
12.45pm: Oil prices slip as supply grows
Oil prices have slipped on Thursday as stockpiles across the world continue to grow.
Brent crude oil fell as much as 0.4% to US$82 per barrel, writing off much of the 0.5% gains experienced on Wednesday.
It comes after data revealed global oil stockpiles rose by 34.6 million barrels in March, according to the International Energy Agency.
Additional data from the Opec cartel identified that several countries which are supposed to reduce their oil outputs have actually increased production ahead of quotas.
Middle East supply chain concerns have also eased as hopes grow that the conflict in the region can move closer to a resolution.
12.23pm: Chevron to sell last assets in North Sea
Oil giant Chevron says it is preparing to sell the last of its assets in the North Sea, leaving the region for the first time in 55 years.
A sale will involve the group's divestment of its 19.4% stake in the Cair oilfield, the BP-operated site located to the west of the Shetland region.
It is the largest oilfield in the North Sea, producing an average of 120,000 barrels per day.
Chevron is currently preparing for its US$53 billion acquisition of rival Hess and has pencilled in the sale of US$20 billion worth of its assets to support the move.
12.05pm: Bitcoin holds onto yesterday's stellar gains
Bitcoin (BTC) soared more than 7.5% against the US on Wednesday, making for the strongest single-day session for the world’s largest cryptocurrency in nearly two months.
The rally brought the BTC/USD pair to its strongest point in three weeks and the bulls have managed to hold onto these gains in early Thursday trades.
Bitcoin’s solid performance follows a softer-than-expected consumer inflation read for April which “lit a fire under equities once again”, said IG analysts.
Bret Kenwell, analyst at eToro, equated the consumer inflation print to a “Goldilocks report” for equities, with the optimist evidently filtering through to the cryptocurrency markets.
11.45am: Reality stars charged for promoting sham trading scheme
A horde of reality TV stars have been charged by the Financial Conduct Authority (FCA) for promoting an unauthorised foreign exchange trading scheme via Instagram.
Geordie Shore's Scott Timlin, multiple The Only Way is Essex stars and Love Island contestants such as Rebecca Gormley and Eva Zapico were all found to have been involved in the scheme.
The FCA charged Emmanuel Nwanze for running an unauthorised investment programme which saw advice given on buying and selling contracts for difference, which it was not permitted to do.
The 'fiinfluencers' were accused of promoting the Instagram account which issued the unauthorised advice and will stand before Westminster's Magistrate Court in June.
11.27am: Thames Water shareholder quits board
Thames Water's largest shareholder has withdrawn its representative from the embattled water provider's board as the company continues to struggle with its £18 billion debt pile.
Michael McNicholas, the managing director at Omers Infrastructure, the Canadian pension fund, confirmed he will no longer be a non-executive director for Thames Water.
Kemble, the parent company of Thames Water, is expected to see several other resignations in the coming days from board members who represent connected companies.
It comes after an equity funding round was shelved after Ofcom refused to allow the swingeing price increases that the shareholders demanded in return for their participation.
11am: Japan economy shrinks, but weightloss drugs boost Denmark GDP
Some gross domestic product figures were reported today for two notable economics.
Japan’s economy shrank faster than expected in the first quarter, with GDP contracting 2% compared to the same quarter last year, worse than the 1.5% drop in forecast.
Compared to the fourth quarter, GDP was down 0.5%, as households and companies cut back.
Denmark meanwhile nearly doubled its growth forecast for this year to 2.7% thanks to weight-loss drugmaker Novo Nordisk (NYSE:NVO) boosting the economy.
The economy ministry in Copenhagen raised its forecast from 1.4% in December as Novo Nordisk (NYSE:NVO) ramps up production of its blockbuster drug, which is branded Ozempic for diabetes and Wegovy for weight loss, resulting in forecast export growth of 7% from 4.2% previously.
"It’s an absolute rarity that the government makes such a significant upward adjustment of the forecast," Tore Stramer, chief economist at the Danish Chamber of Commerce, told media.
10.43am: European markets subdued, but Roche jumps on weightloss drug news
The FTSE 100 is not the only European benchmark in the red this morning, not able to sustain the upbeat vibes from the record setting session yesterday.
While London's leading index is down 0.33%, Germany's DAX has dropped 0.22%, France's CAC 40 is 0.54% lower and Spain's IBEX 35 has slipped 0.23%.
One exception is Italy's FTSE MIB, up 0.11%, led by banks BPER and Banca Monte Paschi Siena, with Ferrari (NYSE:RACE) in the green too.
The wider Euro Stoxx 600 index is down 0.17% and the blue-chip Euro Stoxx 50 is down 0.38%.
"After a sparkling session on Wall Street last night amid hopes that the latest inflation data raises the chances of a US interest rate cut, European markets didn’t share the joy," says Russ Mould, investment director at AJ Bell.
Swiss drug giant Roche is under the Mould microscope, having jumped 4%.
"Weight-loss drugs remain a hot topic and investors are latching on to any positive news in the broader space. Roche is the latest name to turn heads after reporting positive early-stage trial data for an obesity drug. Big share price gains have already been recorded with weight-loss champions Novo Nordisk (NYSE:NVO) and Eli Lilly so investors are keen to find new ways to play the theme."
10.15am: Royal Mail - analysts sceptical, government 'looking closely'
After Royal Mail owner International Distributions Services PLC (LSE:IDS) received a revised takeover proposal from 'Czech Sphinx' Daniel Kretinsky's EP Group yesterday, some analysts are sceptical that the deal will go through.
As the IDS board has indicated it is minded to recommend an offer at this level, "it appears the remaining obstacles to a board recommendation are the undertakings and contractual commitments required to try to secure government approval", says analyst Gerald Khoo at Liberum Capital.
"We remain highly sceptical on the prospects of government clearance, especially if it falls to a potential future Labour government to decide," says Khoo...read more here.
But government ministers do not plan to try and block the deal, reports from the Daily Mail have revealed.
IDs shares are up 2% this morning, 12% over the week.
9.40am: Mixed weekly economic data from ONS
The Office for National Statistics has released its spangly new weekly economic activity and social change data, which show mixed activity.
UK spending on credit and debit cards was down 1% compared with the previous week, while UK retail footfall was broadly unchanged.
The week to 5 May saw higher average fuel prices year-on-year for the second consecutive week at 1%.
The total number of online job adverts last Friday, 10 May, was broadly unchanged from the level in the previous week, but was 18% lower than in the equivalent week of 2023, according to data supplied by Adzuna.
On inflation, compared with the previous calendar month, 27% of businesses reported a rise in the price of goods and services that they bought in April, while 13% reported an increase in the price of goods and services they sold.
The data also includes electricity system prices and flight numbers.
The number of flights in the week to 12 May 2024 ✈️
???? increased 3% when compared to the previous week
???? is also 5% higher than the equivalent period of 2023Read more ➡️ https://t.co/8q1xOfk9mt
— Office for National Statistics (ONS) (@ONS) May 16, 2024
9.19am: UK rally 'has plenty further to go'
Another view from the City, this time Panmure Gordon’s chief economist Simon French, who reckons the UK rally has the potential to go on a lot longer.
"A series of all-time highs for the FTSE100 index - twelve closing highs in the last month which is a record since the index was launched in 1984 - have led to a flurry of questions on where this has left UK equity market valuations," he says in a note to clients this morning.
"The good news for those worrying they have missed the boat is that all-time highs in indices tell us very little about underlying valuations.
"UK valuations remain deeply subdued compared to their historic norms on both a relative and absolute basis. There has been a slight narrowing from the 19% discount we estimated in Q4 2023, with that discount closing to 17%."
However, French says, "there is still plenty to go for", particularly further down the spectrum among the UK's mid-caps and small caps.
We'll have more of his thoughts in a separate story soon.
9.05am: Some market commentary
Let's hear what some market commentators think of the action so far.
"European markets have opened mixed with the DAX trading flat while the FTSE 100 is in the red," says Victoria Scholar, head of investment at Interactive Investor, noting the drag from Sage and easyJet plus many big stocks going ex-dividend today.
BT is on track for its biggest one-day gain since November 2021, she notes, with free cash flow beating analysts’ expectations and new upbeat guidance for significantly further increases.
"BT struck a positive tone towards the broadband market saying it will recover over the medium term. BT also said it enjoyed strong Openreach customer demand for FTTP (fibre to the premises) in the fourth quarter.
"Allison Kirkby took to the helm as CEO in February 2024 and appears to be trying to win over shareholders, attempting to boost its struggling share price with a better-than-expected free cash flow performance, a focus on cost savings, and by increasing the company’s dividend payout.
"She’s been facing a tough battle since a lot of major investors have been shorting the stock – investors placed a record £300m bet against BT, according to an FT report this week, which will be getting squeezed today," Scholar adds.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, says: "The FTSE 100 has shed points after setting another record on Wednesday. The investor confidence boost from Wednesday’s encouraging inflation data in the US is being partially offset by wider thoughts on a busy day for company earnings.
"The overall mood remains bright though, with losses relatively minimal. That’s thanks to that inflation data - while the path to disinflation was never going to be without bumps, this latest indicator suggests things are moving in favour of Federal Reserve interest rate cuts this year – albeit this can change at short notice."
One such piece of news is that easyJet’s CEO is stepping down after seven years in the captain’s seat.
"This is a natural time for Lundgren to step away, with a strong tenure under his belt and the post-Covid heavy lifting complete," says Lund-Yates, also pointing to airline booking momentum "coming off the boil slightly, but overall, the outlook looks robust".
8.53am: Blue-chips down, mid-caps up
While the Footsie is on its heels, down 28 points or 0.33%, its mid-cap sibling is on the front foot.
The FTSE 250 is up 27 points or 0.13% at 20,802.80
Driving the mid-cap index higher are three double-digit share price gains at Future, Watches of Switzerland and Auction Technology Group.
Future PLC (LSE:FUTR) is up 18.3% (good news for my Christmas tip!) as while first-half revenue declined 2% organically or 3% on a reported basis, the online and magazine publishing company returned to 3% organic growth in the second quarter.
Watches of Switzerland Group PLC (LSE:WOSG) is up 15% after a year-end trading update that reveals the fourth quarter completed a solid end to the year in the US and a good showing in jewellery and Rolex pre-owned business.
FY25 guidance from WoS looks encouraging, ahead of existing consensus.
Auction Technology Group PLC (LSE:ATG) was bid 11% higher as seven out of its eight marketplaces performed well.
8.37am: Sage numbers good but not good enough
First-half numbers from The Sage Group PLC (LSE:SGE) seemed pretty much in line with expectations but the shares are down over 8%, though this might reflect overlying optimistic expectations, having risen almost 50% over the past year and recently hit an all-time high.
Underlying revenue grew 10% to £1.15 billion, while organic growth of 9% was just shy of the consensus 9.5% forecast and recurring revenue growth of 11% was in line with expectations.
Underlying earnings per share came in at 18.2p, up 23% and in-line with forecasts.
CEO Steve Hare said demand for its accounting, HR and payroll products from small and mid-sized businesses "remains robust" and looking forward, "despite the ongoing macroeconomic uncertainty, I am confident that Sage's proven strategy, underpinned by continued investment, will enable us to deliver further efficient growth".
The company expects organic revenue growth for the full year to be in line with the first half.
Analyst Damindu Jayaweera at Peel Hunt said this "implies a slight nudge down" to organic growth and the lack of an upgrade to this "will likely hit sentiment today".
8.15am: FTSE falls at open
The FTSE 100 more fell out of the gate rather than the expected spring higher, as some stocks went ex-dividend and the departure of easyJet's CEO and results from Sage Group seemed to disappoint.
In initial trades, the index dropped over 22 points to 8423, a fall of 0.27%.
Almost all of this is from the ex-dividend adjustments of 20.58 points as some big names including Shell, BP, GSK, Tesco, Unilever and Kingfisher PLC trade without the value of their next dividend payment, lowering their share prices temporarily.
Elsewhere, BT Group PLC (LSE:BT.A) rose 8.35% on the back of its mixed results, with earnings disappointing but dividend hiked and a cash flow "inflection" boasted.
EasyJet PLC (LSE:EZJ) fell 7.66% as its CEO heading for the departure gate overrides a pretty positive set of numbers.
Accounting software maker Sage Group PLC (LSE:SGE) also dropped 8.53% on the back of their results, while water company United Utilities Group PLC (LSE:UU.) leaked 0.94% lower.
7.54am: easyJet CEO set to disembark, H1 results look good
Budget airline easyJet PLC (LSE:EZJ) reported a smaller first-half loss than expected and announced that chief executive Johan Lundgren will step down early next year.
After seven years in charge, Lundgren will be succeeded by current finance chief Kenton Jarvis as CEO.
Jarvis, who joined the low-cost carrier in February 2021, will continue in the role of CFO during the transition period and a search for his successor "will commence shortly".
As for the results, revenue of £3.27 billion in the six months to end-March was slightly ahead of forecast (£3.24bn), while a headline pre-tax loss £350 million was down £61 million on a year ago and less than the £357 million than City analysts estimated.
Lundgren outlined a positive outlook for the full year, with third-quarter airline revenue per seat (RPS) expected to be "slightly up" on a year ago, with the Easter peak falling into March.
The EasyJet Holidays business is expected to deliver at least a 40% profit growth to £170 million-plus.
7.32am: BT earnings fall short, but dividend lifted
BT Group PLC (LSE:BT.A) results look a little shy of expectations, but the dividend has been nudged higher, which may override the rest of the numbers for many investors.
New boss Allison Kirkby said that as the telco has passed the point of peak investment into its full-fibre broadband rollout and achieved its £3 billion cost cutting programme a year ahead of schedule, "we've now reached the inflection point on our long-term strategy".
With the plan now to more than double free cash flow over the next five years, she says this means the dividend is being hiked, well a 3.9% increase, with a final dividend of 5.69p per share making a total of 8.0p for the past year.
Kirkby has also set a new £3 billion target of gross annualised cost savings to be reached by the end of March 2029.
As for the results for the year to March 2024, revenue of £20.8 billion was slightly below the average City analyst's forecast and adjusted EPS down 16% to 18.5p, versus the consensus EPS forecast of 19.2p.
On the outlook, revenue is guided to growth between 0% and 1% and EBITDA just above flat to around £8.2bn (forecasts are currently at around £8.3 billion).
7.11am: FTSE 100 to jump out of the gate
The FTSE 100 is heading for a smooth start again on Thursday, with another day full to the brim with corporate results, including BT Group, easyJet, Future, Sage Group, Premier Foods and United Utilities.
Spread-betters have called London's blue-chip benchmark 22 points higher ahead of the open, after the index notched another record intraday day high (8,474.41) and all-time closing high, up almost 18 points yesterday to 8,445.8.
Shares going ex-dividends will hold the Footsie back by around 20 points today though.
Overnight, the three major US stock indices all closed at new record highs too, as softer inflation report strengthened rate cut expectations.
The Nasdaq gained 1.4% and the S&P 500 added 1.2%, while the Dow Jones rose 0.9%.
As the meme stock rally of the last three days faded, GameStop shares retreated by 18% and AMC was down 20% at the closing bell.
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2024-05-16 12:26:00Z
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