Yahoo Finance FTSE 100 Live: Pound near 18-month high against Euro, blue-chips close up after big fall yesterday
Shares in Flutter Entertainment and electricals chain Currys today bounced in a session when a profit warning sent Watches of Switzerland sharply lower.
Their trading updates came as stock market sentiment steadied after yesterday’s slump, when investors in Europe and US revised their bets on early interest rate cuts.
In today’s other developments, supermarket Sainsbury's revealed it is moving out of financial services as part of the firm's "Food First" strategy.
FTSE 100 Live Thursday
Currys raises profit guidance
Sainsbury's quits financial services
Watches of Switzerland shares slide
Google unveils $1 billion UK data centre
Thursday 18 January 2024 18:42 , Simon Hunt
Google has unveiled plans for a $1 billion UK data centre as it ramps up its capacity to deliver more cloud and AI services to customers.
The US tech giant today said it had begun construction on a 33-acre site in Waltham Cross, Hertfordshire that it purchased in October 2020. Once construction is complete, the data centre will support the company's artificial intelligence innovations and growing cloud-based operations, including Google Cloud, Workspace, Search and Maps.
The move adds to the UK's growing AI capability, after ChatGPT maker OpenAI opened its first office outside the US in London and US giant C3.AI moved its Europe headquarters to the capital. Top British AI entrepreneurs have built stakes in businesses worth billions of dollars in recent years, including the founders of London-based Deepmind, which is now owned by Google.
The investment comes amid a period of increasing regulatory scrutiny of the world's biggest cloud providers. In October, the UK’s Competition and Markets Authority said Britain's £7.5 billion cloud services market is to be the subject of a full investigation over concerns that dominant players like Amazon and Microsoft unfairly disincentivise customers from using smaller providers.
WeWork shuts another London office
Thursday 18 January 2024 17:43 , Simon Hunt
WeWork is poised to shut another London site and is in talks over lease agreements in other locations after the beleaguered workspace business seeks to scale down its office estate in a bid to cut costs following its US bankruptcy filing.
The firm is understood to be in exit negotiations at The Cursitor, a site in Holborn. Customers at the Holborn location – which is no longer listed on the WeWork website -- are understood to have been notified of its upcoming closure.
It follows the closure of three sites in Shoreditch, after WeWork confirmed it had reached deals with landlords earlier this month. The company now lists 35 London sites on its website, down from a peak of 50, according to news site Bisnow.
Pound buys €1.1680, near 18-month high
Thursday 18 January 2024 17:25 , Daniel O'Boyle
The pound has climbed to €1.1680, a little over half a cent away from its highest value against the Euro for 18 months.
Sterling soared on the back of hotter-than-expected inflation, which dampened expectations of interest rate cuts.
Meanwhile the Euro has weakened after the release of ECB minutes.
FTSE closes slightly ahead
Thursday 18 January 2024 17:00 , Daniel O'Boyle
The FTSE 100 closed slightly up today, after a big fall yesterday.
Take a look at today's market snapshot.
US jobless claims plunge
Thursday 18 January 2024 14:54 , Daniel O'Boyle
US unemployment claims fell to just 187,000 in the week to 13 January, the lowest total in 16 months.
The figure was down from 204,000 last week,
It's the latest sign that the US appears to be set for a "soft landing" from inflation, though that is not yet guaranteed after the rate of price rises increased again in December.
City Voices: London is losing the battle to keep on top of ugly street clutter and mess
Thursday 18 January 2024 14:23 , Daniel O'Boyle
Last week the business pages of this newspaper reported the exciting news that London Tunnels plc is gearing up to float on the London Stock Exchange. This new company plans to transform a series of once secret tunnels under Holborn into an impressive new visitor attraction. It has earmarked a £200 million plus investment that will allow people to explore at first hand below ground, the history and drama associated with our secret services during both the Second World War and the during the Cold War years.
Meanwhile at street level in central London, a battle of another sort continues. It involves not so much spooks and spies, as business improvement districts and local authorities on the one hand and companies behind half-abandoned phone boxes, badly finished roadworks, commercial waste services and hire bikes on the other.
Mortgage and credit card default rates jumped in run-up to Christmas
Thursday 18 January 2024 12:16 , Daniel O'Boyle
Default rates on mortgages and credit cards increased in the run-up to Christmas, according to a Bank of England survey of lenders.
Banks and building societies reported that both defaults and losses given default increased on mortgages in the fourth quarter of 2023 – and both were expected to increase further in early 2024.
Lenders also reported that default rates on non-mortgage lending to households increased in the fourth quarter and were also expected to increase in the first quarter of this year, the credit conditions survey found.
City Comment: Maybe banking is harder than it looks
Thursday 18 January 2024 11:00 , Daniel O'Boyle
In the old days, prior to the 2007 crash, the banking sector was widely derided as boring, as stuck in the mud.
Critics used to call it 3-6-3 banking.
The bankers paid 3% on deposits, charged 6% on loans, and hit the golf course at 3pm every afternoon.
Encouraged by shareholders and governments to be a bit more adventurous, trouble ensued. Boring banking suddenly looked not so bad after all.
When the supermarkets decided to get into financial services it was widely assumed they would eat the High Street giants for lunch.
The grocers quickly discovered that it wasn’t as easy as all that.
Royal Mail shares higher after stronger Christmas, Travis Perkins rallies
Thursday 18 January 2024 10:19 , Graeme Evans
Watches of Switzerland today reversed 29% or 172p to 415p, the lowest level for shares in the Mappin & Webb and Goldsmiths retailer since 2020.
The downgrade to profit guidance is another sign of the struggles facing luxury retailers and brands after an initial post-pandemic boom.
Chief executive Brian Duffy said: “The festive period was particularly volatile this year for the luxury sector, with consumers allocating spend to other categories such as fashion, beauty, hospitality and travel.”
He is encouraged by market share gains in the UK and US but revenues for 2023/24 will now be near £1.54 billion rather than a previous forecast as high as £1.7 billion.
The slide came during a busy session of FTSE 250 trading updates, including one by Royal Mail owner International Distributions Services.
Its shares have fallen 10% this year but today put back 5.1p to 251p as Royal Mail reported its best Christmas operational performance in four years.
As the postal delivery service wins back customers following last year's industrial action, the company expects a second-half operating profit to broadly offset the £169 million operating loss in the first half.
Chief executive Martin Seidenberg, who also announced former Boots director Michael Snape as new finance boss, said: “We need to build on this momentum.”
Other mid-cap risers included Travis Perkins, with the building supplies firm up 39p to 778.8p after sticking to profit guidance of £180 million.
The FTSE 250 index rose 39.69 points to 18,904.06 while a calmer session for market sentiment left the FTSE 100 index 5.48 points lower at 7440.81.
BAE Systems fell 15.5p to 1176.5p after Exane BNP Paribas cut the defence giant to an “underperform“ recommendation. An in-line update by accounting software firm Sage pushed shares 22.5p lower at 1133p following a strong run.
Frasers buys another 4% of Boohoo
Thursday 18 January 2024 09:02 , Daniel O'Boyle
Mike Ashley’s Frasers Group continued its online fast-fashion buying spree today, snapping up about £17 million worth of Boohoo shares
The deal for another 4% of Boohoo takes Frasers’ stake in the retailed to 21.5%. It comes just a day after Frasers upped its stake in Asos to more than 25%.
Frasers has repeatedly increased its ownership of the two businesses, which have both struggled in the post-pandemic era. Shares of both Asos and Boohoo are down 90% since 2021, and shares have been close to flat since Frasers began building its stakes in June.
FTSE 100 steadies as Flutter jumps 9%, Currys up 6% in FTSE 250
Thursday 18 January 2024 08:32 , Graeme Evans
Stock market sentiment has steadied after yesterday’s sell-off, with the FTSE 100 index broadly unchanged on the back of improved sessions for housebuilders and the mining giant Rio Tinto.
US-focused gambling firm Flutter Entertainment is the best performing blue chip, up 9% or 1230p to 14,430p in the wake of a trading update that also lifted Ladbrokes rival Entain by 4% or 35.8p to 930.6p.
BAE Systems fell 2% or 22.5p to 1169.5p after Exane BNP Paribas cut the defence giant to an “underperform“ recommendation while an in-line update by software firm Sage sent shares 13p lower to 1142.5p following a strong run.
In a packed session of mid-cap updates, the FTSE 250 index rose 18.71 points to 18,884.22. Currys rose 6% and Travis Perkins by 4% after their statements, whereas Watches of Switzerland tumbled 25% and Harbour Energy by 5%.
Flutter shares soar ahead of US listing
Thursday 18 January 2024 08:25 , Daniel O'Boyle
Paddy Power owner Flutter Entertainment’s shares have climbed ahead of its US listing, despite a big hit from “customer friendly” NFL results.
The business said punter-friendly results reduced the margins for its American FanDuel arm by about 2.4 percentage points in the US, to £1.14 billion. It said results cost it about $343 million.
But underlying performance appeared to be stronger, as more American customers continued to place “bet builder” style wagers, which give bookies the biggest margins and FanDuel’s casino site gained market share.
Ahead of Flutter’s US listing, almost the entire update was devoted to the US. The UK, it said, is “delivering continued market share gains through product improvements”.
CEO Peter Jackson said: “The group traded well in Q4 underpinned by our leading local brands supported by global Flutter Edge advantages.
“In the US, FanDuel consolidated its sports leadership position during the peak quarter for sporting activity, while FanDuel Casino went from strength to strength. While sports results were very customer friendly, particularly on the NFL in November, the underlying momentum in the business remains very strong heading into 2024.”
Shares are up 9.6% to 14465p.
Market snapshot
Thursday 18 January 2024 08:24 , Simon Hunt
A few minutes into the day's trading session, the FTSE 100 has continued its spate of losses.
Here's a look at your key market data:
Watches of Switzerland tumbles on profit warning
Thursday 18 January 2024 08:12 , Simon Hunt
Shares in Watches of Switzerland tanked as much as 28% when markets opened after the firm warned on profits.
The business said it saw a “volatile trading performance in the run-up to and beyond Christmas,” which means revenue is now set to be between £1.5 billion and £1.55 billion, down from £1.65 billion to £1.7 billion. Margins are also set to be lower.Across the board, luxury retailers and brands have struggled in recent months after an initial post-pandemic boom.
Currys lifts profit forecasts even as like-for-like sales fall
Thursday 18 January 2024 07:43 , Michael Hunter
Electronics and electrical goods retailer Currys has upped its profit forecasts, as good sales of appliances offset "weaker trends" for TVs.
The company said today it expects group profit before tax of between £105 million and £115 million, up from £104 million.
But like-for-like sales in the 10 weeks to January 6 fell 3% overall.
Alex Baldock, CEO, said:
"We've had a successful Peak trading period, for customers who are more satisfied than ever, and for profits and cashflow. Our markets may be no easier, but we now expect full-year profits to be above consensus expectations."
Sainsbury's Bank division to go as it drops direct provision of financial services, CEO to leave
Thursday 18 January 2024 07:29 , Michael Hunter
Supermarket chain J Sainsbury is moving out of financial services, winding up its banking division.
The move is part of the firm's "Food First" strategy to refocus on its core operations.
It will be business as usual for now for account holders, but the company will move to the same model it as for insurance products, which are provided by third party partners.
The CEO of Sainsbury's Bank, Jim Brown, will retire from the company and his successor will be the former top executive at AIB's UK division, Robert Mulhall,
Simon Roberts, group CEO, said:
"There will be no immediate changes to products and services as a result of today's announcement. We will of course communicate directly to customers well in advance of any changes to their products and services."
The Works losses double amid 'persistently challenging' conditions
Thursday 18 January 2024 07:19 , Simon Hunt
Losses at The Works doubled to £14.8 million last year, the retailer said today, as it warned "pressure on profitability from lower sales and margins has increased".
The books, arts and crafts retailer said it would cut back on 'non-essential investments' in a bid to save cash. Revenue climbed 3.1% to £123 million over the period.
CEO Gavin Peck said: "Market conditions have been persistently challenging, putting pressure on our sales and profit performance in the first half and throughout the festive period.
"It is clear that many families celebrated Christmas on tighter budgets this year, and whilst we offered excellent value, we were not immune to this reduced spend."
Markets steady as investors unwind rate cut bets
Thursday 18 January 2024 07:17 , Graeme Evans
The FTSE 100 index is set for a calmer session, having slumped 1.5% yesterday as investors in Europe and US revised their bets on early interest rate cuts.
The S&P 500 index closed 0.6% lower last night after a leading Federal Reserve official dealt a blow to hopes of a policy pivot by March.
His comments were echoed by European Central Bank president Christine Lagarde, who said current market pricing was not helping the inflation fight.
Their message and the UK's hot inflation reading of 4% triggered the worst day for the FTSE 100 index since August, with the top flight's close of 7446 its lowest since November.
Futures trading is pointing to a flat start after markets in Asia steadied following yesterday’s heavy sell-off caused by China’s below-par GDP reading.
Watches of Switzerland in profit warning
Thursday 18 January 2024 07:13 , Daniel O'Boyle
Luxury Watch retailer Watches of Switzerland issued a profit warning this morning, as it blamed “challenging macro-economic conditions” for a slowdown in luxury spend.
The business said it saw a “volatile trading performance in the run-up to and beyond Christmas,” which means revenue is now set to be between £1.5 billion and £1.55 billion, down from £1.65 billion to £1.7 billion. Margins are also set to be lower.
CEO Brian Duffy said: “The festive period was particularly volatile this year for the luxury sector, with consumers allocating spend to other categories such as fashion, beauty, hospitality and travel. Whilst we are disappointed with this trend, we are encouraged by our market share gains in both the US and UK.”
A number of other luxury retailers and brands have struggled in recent months after an initial post-pandemic boom.
Recap: Yesterday's top stories
Thursday 18 January 2024 06:42 , Simon Hunt
Good morning from the Standard City desk.
What is really going on in the London housing market? Yesterday's figures from the Land Registry were a bit of a shocker.
The 6% fall in prices in the year to November is the sharpest annual rate of decline since August 2009, when the economy was still in the grip of the post-Lehman Brothers economic deep freeze.
Both October and November saw chunky monthly falls of above 2%, adding up to £26,000 slashed off the average price of a home in the capital in just 61 days. At this rate the average cost of a home in London could fall below the “half a bar” mark — £500,000 to you and me — for the first time since July 2021.
Yet the Land Registry number is sharply at odds with the far stronger data emerging from the other respected house prices indices published by lenders Nationwide and Halifax.
Part of the reason is sheer timing — the Land Registry numbers lag. The November figures reflect completed prices notified to the Registry that month.
And what was going on then? Well it seems an age ago but the market was reeling from a half-point rise in interest rates in June, followed by another quarter point in August — the last rise in the current round of tightening.
Since then the “higher for longer” narrative has fizzled out as inflation fell far faster than expected.
Until yesterday. The rise in inflation is a bracing reality check that is likely to bring a ceasefire — perhaps only a temporary one — in the mortgage price war. As for the market? Perhaps it is heading south after all.
Here's a summary of our other top headlines from yesterday:
BP appoints insider Murray Auchinloss to “poisoned chalice” BP CEO post to replace disgraced Bernard looney on £1.45 million salary
The strife in the active fund management sector continued today when Liontrust Asset Management said it had seen clients pull £1.7 billion out of the business in the last quarter
Mulberry sales drop 8.4% in run up to Christmas as boss blames end of VAT free trading for decline in luxury spending Ibstock
William Hill owner 888 says UK punters are spending 18% less on average after it implemented the Government’s new safer gambling rules
Hornby model train set sales steaming ahead 5% after storming Black Friday
All Bar One owner Mitchells and Butlers cheers strong Christmas trading but warns on higher wage costs.
