Yahoo Finance FTSE 100 Live 02 July: Index under pressure, Federal Reserve to 'take time' on rate cuts
Sainsbury’s today sounded an upbeat note after reporting another rise in supermarket sales.
It was a different story at footwear chain Shoe Zone, which has been hit by higher shipping costs.
Eurozone inflation figures are among other areas of interest for traders today.
FTSE 100 Live Tuesday
Sainsbury's posts higher sales
Shoe Zone profit warning
Eurozone inflation in focus
Itsu taps Savills as it eyes doubling of store estate
17:06
Itsu has charted a course for major expansion with the Asian-inspired food chain laying out plans to double its store estate.
The seller of sushi, noodle bowls and rice boxes has appointed property company Savills as sole agent to help identify as many as 80 new sites across the UK.
Savills said it is targeting a number of locations across London to strengthen Itsu’s foothold in the capital, as well building a presence in city-centre locations across the country, eyeing sites with high levels of footfall from shoppers, students and office workers.
FTSE finishes lower
16:49 , Simon Hunt
The FTSE 100 has finished lower at the end of the day’s trading session in London, down 46 points to 8,121.
Sainsbury’s was among the worst performers today, shedding hundreds of millions of pounds from its market cap as investors reeled at news of weak trade at its subsidiary Argos.
Victoria Scholar Head of Investment at interactive investor, said: “Argos is struggling with the backdrop of weak demand given that its offering isn’t a priority for cash strapped consumers at this time. Sainsbury’s CEO even said that UK consumers remain cautious when it comes to discretionary spending. Garden and home are also struggling amid the disappointingly wet weather and in the era post the pandemic DIY boom.
“Sainsbury’s has been struggling to differentiate itself from rivals with stiff competition on price from the German discounters Aldi and Lidl while its premium ranges fall short of those on offer at Waitrose and Marks & Spencer. Nonetheless Sainsbury’s continues to make headway in growing its market share versus rivals.”
Hipgnosis chair Mercuriadis to exit after Blackstone takeover
15:43 , Simon Hunt
Merck Mercuriadis is set to depart as the chair of Hipgnosis Song Management as soon as the takeover by Blackstone has been concluded, the firm said today.
Mercuriadis said: “Six years after founding HSM, I have decided that now is the right time for me to step back from my role as Chairman. This is a timely opportunity for me to undertake a strategic shift of focus, and to spend more time advocating on behalf of songwriters to ensure that they are properly compensated for their work.
“As Hipgnosis Songs Fund enters the next phase of its development, now is the right time to hand the reins to a trusted and highly capable team. I am excited about the company’s future and its ongoing success with the support of Blackstone.”
Wall Street makes a steady start as Fed's Powell says rate cuts will 'take time'
14:51 , Michael Hunter
New York stocks are making a steady start to trade, after the chairman of the Federal Reserve said the US central bank would “take our time” on cutting interest rates.
Jerome Powell, its chairman and the most influential central banker in the world was speaking at a symposium of his peers in the Portuguese resort of Sintra.
At the event, run by the European Central Bank, Powell cited the “strong labour market” for giving leeway in loosening monetary policy. He also said that the Fed had made “a lot of progress” in fighting inflation.
As his words reverberated around global markets the S&P 500 started the session down just almost 5 points at 5470.54.
Pound stays under $1.27 but bounces off recent lows with focus on US rate outlook
14:20 , Michael Hunter
The pound bounced up off the lows toward the $1.26 mark it hit against the dollar earlier this week, as the dollar waned across currency markets, where traders were on watch for clues on the timing of US rate cuts.
Sterling added 0.2% to $1.2666, leaving it heading back toward the $1.27, a level it last held a week ago.
Jobs data from the US, due at the end of the week, is also likely to set the pace on currency markets which remain on watch for when the Federal Reserve will cut the cost of borrowing.
New York stocks set to falter in the run up to jobs data, interest rate clues and Independence Day
13:25 , Michael Hunter
Wall Street shares are on course to slip in opening trade, with investors in cautious mood into a speech from the US’s main central banker that could provide insight into the timing of an interest rate cut.
Jerome Powell, chairman of the Federal Reserve, is due to speak at a forum hosted by the European Central Bank in Sintra, Portugal, just as New York markets open.
With traders on the look out for clues on when the Fed will cut the base cost of borrowing in the world’s biggest economy, futures markets were expecting the S&P 500 to fall by around 23 points.
The sense of caution also came ahead of the Independence Day public holiday on Thursday and then influential jobs data out on Friday.
Powell’s remarks will be live streamed here on the ECB’s website
House builders higher into election that could bring in new planning rules
12:19 , Michael Hunter
House builders were making gains in early afternoon trade in London, ahead of this week’s general election that could usher in a new planning regime.
Labour, which remains significantly ahead in the opinion polls, intends to cut red tape that holds up developing new houses as part of a manifesto pledge to build 1.5 million homes within five years of being elected, if it forms the next government.
Two days out from polling day, developers moved into prominent positions on the FTSE 100 leaderboard. Barratt Development rose 3.5p to 481p. Taylor Wimpey was up over 1p to 145p. London-focused Berkeley Group was 2p higher at 4622p.
HSBC embarks on cost-cutting drive: Bloomberg News
11:47 , Bloomberg
HSBC is slowing down hiring and asking investment bankers to rein in their travel and entertainment expenses as outgoing Chief Executive Officer Noel Quinn looks to curb costs at Europe’s largest lender.
The bank in some cases is not replacing staff who have left or resigned in recent months, according to people familiar with the matter. Some businesses have been told to pause hiring altogether, though the freeze isn’t meant to impact client-facing roles, according to one of the people, who asked not to be named discussing personnel information.
Investment bankers have been encouraged to set up at least 3 client meetings a day in order to make the most of work travel, the people said. Employees in some divisions were reminded of some of the expectations on work travel at a company town hall in recent days, they said.
City comment: Argos results spells bad news for the high street
11:19 , Jonathan Prynn
THE aisles might be full at Sainsbury’s but buried in the supermarket’s first quarter trading update were pretty grim numbers from its Argos operation.
Like-for-like sales were down a painful 7.7% with our old friends, “unseasonal” weather and “softer demand” from consumers, blamed for the decline.
Of course the rotten weather did not help sales of outdoor furniture but do these figures tell us something more interesting about the state of mind of the consumer in the middle of 2024 as we approach election day? And it could partly help to explain the landslide that is inevitably coming on Thursday.
A 15-year squeeze on living standards that has left households virtually no better off than they were before the financial crisis shattered the comfy assumption that, economically speaking — “things can only get better” — as the old song has it.
Meanwhile, the long-awaited Seventh Cavalry salvation of interest rate cuts has been slower arriving than a convincing England football performance at the Euros. According to the Bank of England there are still more than three million homeowners on “legacy” fixed-rate mortgage deals below 3% yet to move to the higher rates prevailing now. They will all have to remortgage on to more expensive deals by 2026, with around 400,000 facing hikes of 50% more in their monthly repayment costs.
That deadweight will continue to act as a drag on consumer confidence through the first half of a Starmer premiership and perhaps hold him back from delivering the boost to growth he has promised voters.
Argos was not the only high street retailer with disappointing numbers today. Shoe Zone, which has 330 stores around the UK, also dropped a profit warning that sent its shares tumbling. Official retail sales data have been on a bit of a rollercoaster this year. The deteriorating numbers from Argos — and many others — suggest that the high street is far from out of the woods yet.
M&S, Compass and Unilever struggle in FTSE 100, BP shares higher
10:13 , Graeme Evans
London’s FTSE 100 index is down by 0.6% or 49.97 points to 8116.79, a performance that mirrors leading markets on the continent.
International-focused Unilever and Compass are high up the fallers board with declines of 58p to 4287p and 52p to 2121p respectively.
The mood of Marks & Spencer shareholders about to log on for the retailer’s AGM was also soured by the sight of today’s fall of 5.1p to 283.3p. However, the shares are still 45% higher in the past year.
The FTSE 100 decline would have been greater without the support of the energy sector.
BP shares led the top flight with a gain of 6.35p to 484.8p while Shell lifted 13p at 2870.5p after Brent Crude rose to a two-month high near $87 a barrel.
The FTSE 250 fell 44.49 points to 20,177.59, not helped by 2% declines for insurance firms Lancashire Holdings and Hiscox.
In the retail space, electrical chain Currys fell a penny to 73.6p and online rival AO World dropped 2.4p to 110.2p.
Revolut growth skyrockets as auditor BDO grants clean bill of health
09:37 , Simon Hunt
Revolut today edged a step closer on its mission to secure a UK banking licence after Britain’s biggest fintech posted a surge in profits and was given a clean bill of health by auditors.
The London-based business, which yesterday celebrated its ninth anniversary and will shortly move into a huge new office space in Canary Wharf, recorded a £344 million profit for 2023, compared to £6 million the previous year, while revenues nearly doubled to £1.8 billion.
That was helped along by rising interest rates, which added an extra £400 million in interest income during the year, as well as a more-than 50% jump in customer subscription income, which now accounts for around £250 million of the firm’s turnover.
FTSE 100 under pressure despite BP support, Wizz Air down 3%
08:46 , Graeme Evans
The FTSE 100 index is at a two-month low, having fallen 54.72 points to 8112.04 in today’s latest lacklustre session.
Stocks under pressure include Sainsbury’s, with the supermarket’s robust trading update failing to prevent a decline of 3% or 8.2p to 249.6p.
Other fallers included Marks & Spencer, which retreated on the day of its AGM by 3.4p to 285.1p.
Oil stocks offered support after the price of Brent Crude set a two-month high, with BP up 5.5p to 484p and Shell 7p stronger at 2864.5p.
The FTSE 250 index fell 78.49 points to 20,143.94, led by low-cost airline Wizz Air with a decline of 3% or 64p to 2086p.
Eurozone inflation figure seen lower
07:40 , Graeme Evans
The eurozone’s flash inflation reading for June is due for release at 10am, with economists expecting more signs that price pressures are easing.
Bank of America forecasts a 30 basis points drop in headline rate to 2.3% year-on-year on the back of weak pump prices, together with core inflation at 2.7%.
Later today, Federal Reserve chair Jerome Powell and European Central Bank president Christine Lagarde are speaking at the ECB’s forum on central banking at Sintra, Portugal.
Shoe Zone issues profit warning
07:35 , Michael Hunter
Discount footwear chain Shoe Zone has been hit by higher shippings costs relating to the tension in the Red Sea and poor summer weather.
The 330-store chain said today it had been hit by higher “container prices due to a reduction in the supply of shipping vessels and the continuation of a reroute away from the Suez Canal.”
IT added: “As a result, container prices have risen significantly over the last six months.”
And then “unseasonal weather conditions” meant “eaker than expected Spring Summer sales from April to June”.
It cut its profit forecast for the year to “not less than £10 million”.
Sainsbury's on the up
07:29 , Simon English
Sainsbury said it has “momentum” in the fight between UK grocers and that more customers are choosing it as the place to go for their main family shop.
It claims to be gaining customers from rivals for 15 months in a row. In the 16 weeks to June 22, sales are up 4.2% at Sainsbury. They are down at both the general merchandise arm and at Argos.
Like-for-like sales, the industry measure, rose 3%.
CEO Simon Roberts said: ““We are pleased with our market-beating grocery performance and the early progress we’re making against our Next Level Sainsbury's plan. We’ve been winning from competitors every month for 15 months, as more and more people are choosing Sainsbury's for their big weekly shop.”
FTSE 100 seen lower, Apple and Microsoft lead US tech rally
07:13 , Graeme Evans
Another strong performance by US tech stocks last night lifted the Nasdaq Composite by 0.8% and the S&P 500 index by 0.3%.
Big risers included Apple, which climbed 3%, and Microsoft following a 2% improvement.
In contrast, the Dow Jones Industrial Average edged only slightly higher amid the focus on Friday’s release of US employment figures.
The FTSE 100 index is forecast to open today’s session 20 points lower at 8147, having surrendered initial gains to finish flat yesterday.
Brent Crude is at a two-month high of $86.82 a barrel, with the pound at $1.2636.
Recap: Yesterday's top headlines
06:49 , Simon Hunt
Good morning from the Standard City desk.
Why are so many of the world’s biggest tech firms based in the US? Why has Europe never managed to create its own Amazon, Google or Meta?
Part of the explanation can be put down to an entrepreneurial spirit, less red tape, and deeper pools of capital on the other side of the Atlantic. But another part of it is down to differing attitudes to competition policy.
The US rules have been significantly more lax for decades. The Antitrust Paradox, a 1978 book by legal scholar Robert Bork, argued we shouldn’t care whether a merger will affect the concentration of a particular market. What matters is whether the deal is good or bad for consumer welfare.
The argument has shaped US attitudes to competition ever since. But there is a growing sense that this approach has run its course.
As we reported yesterday, Big Tech firms like Apple and Meta are now facing billions of dollars in fines from EU regulators amid concerns over their business practices.
If the EU presses ahead with these blockbuster fines it could be years before any firm is forced to pay them. But the era of tech giants’ acquisition sprees and side-stepping regulators with ‘bigger is better’ arguments feels well and truly over.
~
Here’s a summary of our other top headlines from yesterday:
Signs of spring for the house market: prices up in June by 0.2% month-on-month and 1.5% in a year, says Nationwide, annual rate of increase up from 1.3% last time, as activity picks up ahead of Bank of England rate cuts.
Three small-cap firms including Titanic shipbuilder Harland and Wolff see their shares suspended over issues with accounts.
A drop in domestic gas and electricity prices comes effect, but costs are expected to rise again in October. Regulator Ofgem's new price cap for England, Wales and Scotland came into force on Monday, meaning a typical household's energy bill will fall by £122 a year.
Chip designer Graphcore acquisition by SoftBank faces government national security review, Telegraph reports.
City broker Panmure Liberum launches its new brand and two new product areas in debt advisory and specialised private capital as part of the enlarged group's new growth ambitions.
