Yahoo Finance FTSE 100 Live: London stocks still down after weaker US jobs data, house prices decline
The FTSE 100 fell even further today after reaching its lowest end-of-day figure of the year on Thursday.
The index of London blue-chip stocks closed at 7280.50 yesterday, which is the lowest figure since November 2021, after a 2.2% fall. Rising interest fears sent 97 of the 100 stocks on the index down.
At one point today the FTSE was down a further 0.6%. A brief rally faded, leaving the index down 0.3% for the day, having lost more than 270 points this week.
Meanwhile, Halifax revealed that house prices fell year-on-year at the fastest pace since 2011, but remained surprisingly stable month-on-month in the face of chaos in the mortgage market.
Key Points
FTSE falls further after lowest close of 2023
House prices fall at fastest pace since 2011
CMC finance chief leaves for rival
City Voices: Seize this golden opportunity to crack down on online fraud
Friday 7 July 2023 16:20 , Chris Blackhurst
It seems to be taking forever, but the Online Safety Bill is, I am assured, edging closer to becoming statute.
The problem is that the proposed legislation is far from perfect. Indeed, it is perplexing that as its wended its way, the bill’s drafters did not see what others so clearly see.
You would suppose, for instance, that high on their minds would be the avoidance of fraud. Online scamming is rampant and its impact is enormous.
US shares slightly lower
Friday 7 July 2023 14:54 , Daniel O'Boyle
Take a look at all the key market data as US shares open slightly lower.
London’s US payroll-fueled rally fizzles within minutes
Friday 7 July 2023 13:57 , Daniel O'Boyle
London stocks initially rallied on the weaker-than-expected US job figures, in the hopes it would mean less interest rate rises, but this proved short lived.
Shares remain down 0.2% to 7265, only slightly ahead of where they stood half an hour earlier.
US jobs come in slightly below expectations
Friday 7 July 2023 13:31 , Daniel O'Boyle
The US added 209,000 jobs in June, down from the expected 230,000.
The figure is also a decline from last month, when more than 300,000 jobs were added.
However, the country’s unemployment rate ticked down to 3.6%.
Richard Flynn, Managing Director at Charles Schwab UK, said: “Today’s jobs report is slightly weaker than many expected. The labour market remains tight, but investors will likely interpret these numbers as a sign that cracks are beginning to emerge.
“As wage growth is yet to substantially ease, the Fed will likely feel continued pressure to maintain high interest rates. When inflation remains an issue for the US economy, slower and weaker pay growth will make it easier for the Fed to maintain price stability.”
Little movement in US futures ahead of jobs report
Friday 7 July 2023 12:57 , Daniel O'Boyle
US stock futures are close to flat as Wall Street awaits the Bureau for Labor Statistics’ latest non-farm payrolls report.
Dow Jones futures are down by eight points to 34122, while S&P 500 futures are down 0.1% to 4443. nasdaq futures are down 0.2% to 15211.
Economists expect the US to have added 240,000 more jobs, but the BLS data has consistently come in much hotter than expected. Yesterday, ADP reported a higher-than-expected number of jobs added in the world’s largest economy, prompting an accelearion of London’s stock sell-off.
Final day of production for UK’s best-selling car
Friday 7 July 2023 12:29 , Daniel O'Boyle
Production of the UK’s best-selling car ends on Friday.
Ford will produce the final Fiesta at its factory in Cologne, Germany, before the site is modified to make more room for more electric vehicles.
The Fiesta was an instant hit when it was introduced in 1976 as it met the demand for smaller, more efficient cars.
Prolonged property slump looms as interest rates expected to top 6% until 2025
Friday 7 July 2023 12:04 , Daniel O'Boyle
Homeowners were today warned the London property market is heading for a prolonged slump as investors priced in interest rates staying above 6% until 2025.
The gloomy projections came as Britain’s biggest lender Halifax said prices in the capital dipped 2.6% in the year to June, the fastest rate of decline since the financial crisis almost a decade and a half ago.
However, the fear is that the downturn will accelerate as increasing numbers of owners come to the end of fixed mortgage deals at record low rates at or even below 2%.
London house prices drop at fastest rate since 2009 in June
Friday 7 July 2023 11:17 , Daniel O'Boyle
The fall in the London property market is gathering pace with house prices dropping at their fastest rate since the peak of the 2009 global financial crisis last month, latest figures show today.
Britain’s biggest mortgage lender Halifax said values were down by 2.6 per cent in June, leaving the average price in the capital at £533,057, a loss of around £15,000 over 12 months.
It was the fastest rate of decline of any UK region apart from the South East, where prices were 3 per cent down.
Key market data as FTSE 100 recovers
Friday 7 July 2023 10:36 , Daniel O'Boyle
Take a look at the key market data as the FTSE 100 rallies, but remains in the red.
A correction or a crash?
Friday 7 July 2023 10:31 , Daniel O'Boyle
A further decline in housing prices appears certain, but - following the release of Halifax’s latest house price index - experts are divided on whether this will be a smooth decline or a sharp crash.
Adam Smith, founder of broker Alfa Mortgages, said: “As the Halifax observes, the immense strain being put on people's finances will almost certainly send prices lower during the months ahead. Inflation is proving extremely stubborn and the base rate is now expected to peak far higher than we thought a couple of months ago.
“However, the housing market could still experience a correction rather than a crash during the next 12 months due to the lack of supply and strength of the jobs market. Curiously, June and July to date have seen positive demand, especially from first-time buyers who are enthusiastically diving in and seizing attractive deals as asking prices edge down.”
James Briggs, head of personal finance intermediary sales at Together, said: “House prices fell by 0.1% in June, backing wider reports of the UK’s falling position among global property house price growth this year. While the market is under pressure and there will undoubtedly be regional corrections, we are far from a crash.”
On the other hand, John Choong, market and equity analyst at InvestingReviews.co.uk, said: “With the average fixed mortgage rate now firmly above 6%, the housing market should brace for an onslaught. This is especially the case in the South of England, which is under the most pressure.
“Household incomes are getting squeezed by the month due to Andrew Bailey's complacency and incompetence.
“If inflation continues to remain sticky for the foreseeable future, the rapid tightening of monetary policy could trigger a recession, leading to higher unemployment and a bloodbath in the housing market.”
Just two London postcodes remain with average room rents below £750 per month
Friday 7 July 2023 09:36 , Daniel O'Boyle
The average cost of renting a room has risen above £750 per month in all but two London postcodes, data has revealed.
Figures shared exclusively with the Standard’s Homes & Property by houseshare portal SpareRoom showed that the price of being a tenant has risen disproportionately in many of the capital's traditionally more affordable neighbourhoods.
While there were six postcode districts with average rents below £750pcm in the first three months of this year — plus another three areas under £752pcm — just two met either criteria in the second quarter.
Mortgage rates creep further up
Friday 7 July 2023 09:32 , Daniel O'Boyle
Mortgage rates rose again after holding steady yesterday, but at a slower pace than in recent weeks.
The average interest rate on a two-year fixed-rate deal is now 6.54%, up from 6.52% yesterday. For a five-year fix, the average interest rate rose from 6.02% to 6.04%.
The number of mortgage products on the market grew to 4,621.
However, more price rises could be on the way after gilt yields soared yesterday.
Market snapshot as shares keep falling
Friday 7 July 2023 08:40 , Daniel O'Boyle
Take a look at today’s market snapshot as shares opened lower, with the FTSE 100 now approaching the lowest intraday figure of the year.
Bookie-owned betting service pulls up sale process before finishing post
Friday 7 July 2023 08:30 , Daniel O'Boyle
Bookie-owned Sports Information Services, which broadcasts horse races and data to betting shops, is no longer up for sale.
According to reports at the time, the owners of SIS - including Ladbrokes and William Hill as well as private equity groups - were looking to sell the business for £200 million.
However, one of its shareholders, Catalyst Media, today revealed that it would no longer be looking to sell the business. Catalyst is an investment group that now only has a single investment, its 20.5% stake in SIS.
Catalyst said after SIS agreed new contracts with some of mainland Europe’s top bookies, including Sweden’s Kindred and Betsson, its board decided a sale was no longer the best option.
“The SIS board has decided that shareholder value can best be maximised for the time being by continuing to implement the existing strategic development plan for the business which will target growth in all SIS’s product areas over the coming years,” Catalyst said.
FTSE 100 falls further but banks and miners limit overall decline
Friday 7 July 2023 08:22 , Michael Hunter
London’s FTSE 100 stayed under overall pressure in Friday opening trade, as it failed to find its feet after one of the biggest tumbles of 2023 took it to some of its lowest levels of the year by Thursday’s close.
There were some signs of a more confident mood, with banks, miners and some consumer rising and the overall losses driven by more defensive sectors which were more resilient during the wave of selling.
Overall, the main UK stock index lost a further 37 points to 7,243.65, a drop of 0.5%. Utility and pharmaceutical stocks were the biggest fallers. United Utilities fell 14p to 933p. Severn Trent was down 35p to 2416p. GSM, the drugmaker, fell 14p to 1324p.
Some financial and consumer stocks did start to bounce back from the previous day’s strong sell-off. Asian-focused, London listed bank Standard Chartered rose 2.4p to 670p. Barclays was up 1p at 147p. Ocado, the online grocer and e-commerce tech stock, was up 13p at 566p. Cruise line carnival was 7p stronger at 1309p.
Mining stocks, which led the selling earlier in the week on worries about a slowdown in China’s economy, bounced higher. Anglo American added 10p to 2179p. Rio Tinto gained 35p to 4928p.
CMC loses finance chief
Friday 7 July 2023 08:16 , Simon English
CMC MARKETS suffered a fresh blow today when long-standing finance chief Euan Marshall quit to join trading rival IntegraFin.
Founder and CEO Lord Peter Cruddas has been under fire lately for his loyal support of ousted Prime Minister Boris Johnson, whom he feels was unfairly “stitched up”.
He wrote in The Telegraph last month: “What I am surprised by is the brazen nature with which they have dispensed with the man who had the only mandate to lead this Parliament. I am shocked by their shamelessness and utter disregard for British democracy.”
Today Marshall, paid £371 million last year, said he was leaving.
He said: "I have thoroughly enjoyed working with the extremely talented people at CMC over the last 11 years, and particularly my last 4 years as CFO. The Company has changed significantly during my time here, and through the recent investments in diversifying the business, there are strong foundations in place for the enduring success of the business.”
With Cruddas somewhat distracted by politics, some in the City may fear CMC lacks high level leadership, though Marshall will remain in place for a while as a replacement is sought.
Cruddas, a huge Tory party donor, said: “"Euan has been a highly valued member of the CMC team, holding various positions since becoming a part of the group in 2011. Over the past 4 years, he has served as the CFO, playing a crucial role in the Company’s transformative journey. On behalf of the Board and colleagues throughout CMC, I would like to express our gratitude to Euan for his dedication and valuable contributions during his tenure. As he moves forward in his career, we extend our best wishes for his future endeavours."
Like other trading houses, CMC enjoyed a Covid-lockdown boom. The shares are down 43% in the last year as revenues fell.
Today the shares rose 9p to 158p, which leaves the business valued at £442 million.
JD buys out remainder of Iberian arm for €500m as it eyes more global expansion
Friday 7 July 2023 08:02 , Daniel O'Boyle
JD Sports continues on its path to global domination, as it today agreed to buy out the remainder of its Spanish, Dutch and Portuguese arm Iberian Sporting Retail Group for €500 million (£427 million).
JD already owned just over half of ISRG, but hopes to have more control over the business as it plans to open 500 international shops over the next five years.
CEO Régis Schultz said: “At our Capital Markets Event earlier in the year, we emphasised the benefit of having strong complementary concepts to support our ‘JD first’ global growth strategy. ISRG is a highly successful business and one of the leading players in sports retail in Iberia. By bringing the two businesses closer together, there is significant potential for accelerating growth.
“We sincerely thank the minority shareholders, Balaiko and Sonae, for their important contributions to the business during our time as partners.”
Analysts at Peel Hunt noted that the acquisition came just days after a licensing deal in the Middle East, signalling JD’s aggression about global expansion.
They said: “Taking over the ‘other half’ of ISRG gives JD greater control of the growth in appealing European markets. There was progress last week with franchises starting in the Middle East, so JD is not dragging its feet as it grows across the world.
“We continue to believe that the global growth story here is materially undervalued.”
FTSE 100 expected to flatline after tumble to lowest close of the year
Friday 7 July 2023 07:30 , Michael Hunter
The FTSE 100 is expected to stay stuck around some of the lowest level of 2023 in opening trade, after a global tumble on stock markets tracked fears about rising interest rates at central banks.
London’s main stock index will remain mired at 7,280 according to opening calls from spread betting companies having slumped by over 160 points yesterday. It looked particularly exposed, with concern also circulating about consumer spending in the UK and the impact falling household spending power after 13 consecutive rate rises from the Bank of England, with more to come.
The worldwide selling worsened after jobs data from the US looked robust, implying the US Federal Reserve had more room to raise rates after minutes out this week from its last meeting implied there was more to come.
Today’s trade is likely to be defined by more set-piece numbers from the American labour market. The non-farm payrolls report for June is due at 1.30 p.m. London time, one of the most closely watched releases of them all,
European stock markets were expected to tick higher, with London missing out on a modest rebound after Thursday’s falls.
Yesterday’s top stories
Friday 7 July 2023 07:12 , Daniel O'Boyle
Good morning, here is a selection of yesterday’s top stories:
Andrew Bailey, governor of the Bank of England, accused retailers of “overcharging” customers for certain items
Shgopping channel Ideal World has gone into administration, and most of its 275 staff will be laid off
10-year gilt yields reached their highest level since 2008, signalling ever-increasing fears about the UK economy
Halifax: House prices fall at fastest pace since 2011
Friday 7 July 2023 07:04 , Daniel O'Boyle
UK house prices dipped by 0.1% in June, a relatively resilient result in the face of huge uncertainty about mortgages, but that still means prices fell year-on-year at the fastest rate since 2011.
The average house price was £285,932, down 3.6% from June of last year.
Kim Kinnaird, director of Halifax Mortgages, said: “To some extent the annual growth figure also masks the fluctuations we’ve seen in the market over the past 12 months. Average house prices are actually up by +1.5% (£4,000) so far this year, with most of that growth coming in the first quarter, following the sharp fall in prices we saw at the end of last year in the aftermath of the mini-budget.
“These latest figures do suggest a degree of stability in the face of economic uncertainty, and the volume of mortgage applications held up well throughout June, particularly from first-time buyers. That said the housing market remains sensitive to volatility in borrowing costs. Concerns about persistent inflation have led to a significant increase in the cost of funding. Coupled with base rate rising by another 50bp, this contributed to a big jump in typical mortgage rates over the last month.
“The resulting squeeze on affordability will inevitably act as a brake on demand, as buyers consider what they can realistically afford to offer. While there’s always a lag effect when rates go up, many existing mortgage holders with variable deals or rolling off fixed rates will likely face an increase in the next year.”