Yahoo Finance FTSE 100 Live: US GDP much lower than expected; FTSE closes at 7832; Wall Street starts strong
A bumper session of blue-chip results today features first quarter figures from Barclays, Unilever, AstraZeneca, London Stock Exchange and Taylor Wimpey.
Others in the spotlight include supermarket Sainsbury’s, which has reported a 5% fall in annual underlying profits to £690 million.
The updates come with London’s FTSE 100 index struggling for momentum and oil prices on a downward path as fears grow over the weakening economic outlook.
FTSE 100 Live Thursday
Sainsbury’s profits at top end of guidance
GDP figures keep focus on US economy
Unilever boss rejects claims of “greedflation”
Government predicts online gambling industry to lose up to £895 million on white paper reforms
16:55 , Daniel O'Boyle
Paddy Power and Sky Bet owner Flutter said the gambling reforms proposed in a Government white paper today will cost it up to £100 million a year, while the Government said it expects measures to cost up to £812 million for the online gambling industry as a whole.
In its review of the costs of the reforms, the Department for Culture, Media and Sport said that new affordability checks are set to cost between £380 million and £710 million, while stake limits for online slots could cost between £125 million and £185 million, for a total hit to the online industry of between £515 million and £895 million.
FTSE closes at 7831.58 after late fall
16:35 , Daniel O'Boyle
A fall late in the day meant the FTSE 100 closed down 0.3% at 7831.58.
The index had been rooughly flat for most of the day, but dipped within the last hour of trading.
Legal & General was the day’s biggest faller, losing 6.9%, while Barclays was the biggest riser on a day where it published its results.
The FTSE is now down more than 1% over the last three days.
Vodafone hires interim boss to full-time top job
16:14 , Daniel O'Boyle
Mobile phone giant Vodafone has appointed interim boss Margherita Della Valle as permanent chief executive, ending nearly five months of uncertainty over the top role.
The group said Ms Della Valle – the firm’s former chief financial officer – had been hired after a “rigorous internal and external search”.
Big start for US shares as GDP figures lead to rate peak hopes
15:46 , Daniel O'Boyle
US shares are off to a strong start today, following the country’s GDP figures being published earlier today.
The S&P 500 is up 1%, while the Dow Jones is up 0.7%. The particularly rate-sensitive Nasdaq, meanwhile, rose by 1.5%.
The GDP release earlier today led to a decline in peak interest rate expectations.
Paddy Power owner says it could lose £100 million a year on new gambling reforms
15:21 , Daniel O'Boyle
Paddy Power and Sky Bet owner Flutter said the gambling reforms proposed in a Government white paper today will cost it up to £100 million a year.
The betting giant said it had already taken steps that were similar to many of the proposals, such as a £10 cap on stakes for online slot machines - where the Government is proposing a cap somewhere between £2 and £15 - and performing checks on higher-spending punters.
Those changes, it said,, cost it around £150 million in revenue annually.
US shares rise as rate hike fears ease
14:20 , Daniel O'Boyle
US shares rose today, as weaker-than-expected GDP figures signalled the Federal Reserve’s interest rate hikes are having an effect.
The Dow Jones is set to open up 0.4%, according to futures markets, while the S&P 500 is set to gain 0.6%. The Nasdaq Composite, representing some of the most rate-sensitive stocks, is projected to rise by 1.1%.
After reporting better-than-expected results last night, Facebook owner Meta is expected to rise by 11.6% to $209.40.
US GDP growth slower than expected
13:50 , Daniel O'Boyle
US GDP grew by 1.1% in the first quarter of the year, according to preliminary estimates - significantly less than the expected 2% and the prior quarter’s 2.6%.
Motor vehicles and parts were the biggest contributor to GDP growth among goods, while health care and food services and accommodations led the way among services.
Cazoo charts course to profitability as sales slip
13:21 , Simon Hunt
There are tentative signs Cazoo is heading for profitability as the online car retailer said it was taking a more targeted approach to buying and selling vehicles amid a drop in revenues.
Gross profit increased from £3 million to £14 million in the first three months of 2023, a jump in its margins of just under five percentage points. Revenue fell 11% to £247 million while the number of cars sold was down 7% 17,447. Cazoo shares rose 7% to $2 in pre-market trading.
Cazoo CEO Paul Whitehead said: “We remain laser-focused on improving our unit economics, optimizing our fixed cost base and maximizing our cash runway.
“We are applying a more targeted approach to which vehicles we buy, guided by our proprietary data of their desirability, with a better selection of models available on our website driving better margins.”
Gambling firms must perform new checks to stop ‘unaffordable’ losses
12:58 , Daniel O'Boyle
Atwo-and-a-half-year-long process to review the UK’s gambling laws has today proposed that betting firms must perform new ‘passive’ checks to ensure that punters who spend more than £125 in a month can afford their losses, with more detailed checks for those who spend more thasn £1,000.
But after years of delay, many of the actions included in the reforms - such as a cap on the amount that can be bet on slots - will be put to consultations, meaning it could still be some time before the reforms are put in place.
Culture secretary speaks with gambling white paper set to be published
11:55 , Daniel O'Boyle
Culture secretary Lucy Frazier is speaking in Parliament, discussing the gambling white paper which is set to be published later today.
“Gambling problems have always been measured in terms of money lost, but you cannot measure the lost of dignity,” she said.
As had been widely reported, she said the white paper would include new affordability checks, a statutory levy to replace voluntary funding of research and treatment groups and the creation of a new ombudsman to stand up for customers.
Carlsberg hikes prices after significant jump in costs
11:30
Brewing firm Carlsberg said it hiked prices over the first quarter of the year in order to offset “significantly” higher costs.
The company, which also brews Tuborg and Brooklyn beer, said it is “uncertain” how recent increases will affect the amount of its beer bought by customers.
It came as Carlsberg told investors that revenues grew by 8% to 16.4 billion Danish krone (£1.95 billion) over the three months to March.
FTSE 100 lower after flurry of updates, Capricorn Energy down 10%
10:24 , Graeme Evans
Fallers today included St James’s Place, Weir and Howden Joinery as jittery investors took no chances in a packed session of updates.
The selling came as the FTSE 100 index remained under pressure, falling 11.83 points to 7840.81 amid worries that troubles in America’s regional banking sector will spread and cause tighter lending conditions that could slow the US economy.
Oil prices have reflected this nervousness, with Brent crude now down to $78 a barrel and BP shares under pressure following a drop of 6.1p to 527p.
Other fallers included wealth manager St James’s Place, even though it reported a “good quarter” as its advisers attracted £4.2 billion of new client investments.
The inflows were below the previous year’s level and short of City expectations, causing shares to dip 62.5p to 1177p. Mining engineer Weir joined it on the fallers board, dropping 55.5p to 1837.5p despite reiterating 2023 guidance.
Elsewhere in the top flight, the strong run for London Stock Exchange shares came to a halt following its first quarter update. Strength in data and analytics offset lighter stock market activity to lift total income 15% to £2 billion, but shares retreated 18p to 7968p.
The subdued trading patterns saw the FTSE 250 index ease 50.55 points at 19,157.42, with Howden Joinery 30.6p lower at 638p after reporting a broadly flat revenues performance by its UK depots at the start of 2023.
Capricorn Energy also slid 10% or 25.4p to 217.2p as it revealed the details of a five-point strategic plan that will see it materially scale back all exploration spending outside Egypt. The former Cairn Energy business has started a sale process for its UK assets, which include five licences in the southern North Sea.
Among smaller stocks, Naked Wines cheered 1.2p to 115p as chief executive Nick Devlin hailed early progress on the company’s “pivot to profit“ turnaround strategy.
He forecast revenues of £350 million for the year to 3 April, leading to underlying earnings at the top end of guidance of between £15 million and £18 million.
Devlin said: “We enter the 2024 financial year as a significantly larger and substantially more profitable business than we were pre-pandemic.”
Deutsche Bank set to make job cuts
10:03 , Daniel O'Boyle
Deutsche Bank warned it would make “focused reductions” in its management-level workforce as it aims to cut costs.
The lender said it aims to increase its cost savings by another €500 million, through a series of “efficiency measures”.
That includes “strict limitations on hiring in non-client-facing areas,” and a reduction in number of its management staff.
Unilever CEO says business did price rises ‘responsibly’
09:58 , Daniel O'Boyle
Higher prices drove bigger-than-expected sales growth at Unilever in the first quarter, but boss Alan Jope rejected ‘greedflation’ labels, arguing that the conglomerate handled increases “responsibly”.
While the cost of many goods increased, Jope also said Unilever would rather ‘shrinkflate’ than raise prices.Unilever was accused of ‘shrinkflation’ for its Magnum multipacks during the quarter, as the number of ice creams in a pack was cut from four to three.
“The very, very last thing we go to is raising prices,” he said. “In many of our markets, hitting a specific price point is really important.”
Paddy Power owner selects Bryant as next chair on key day for gambling sector
09:16 , Daniel O'Boyle
Paddy Power owner Flutter has appointed former Kellog’s CEO John Bryant as its new chair, as it prepares to put its US listing to shareholders on the same day the Government announces major gambling reforms.
Bryant - a US-Australian dual national - has served on the boards of many Americann businesses including Coca-Cola and Macy’s, further signalling Flutter’s turn to the US..
"We are delighted to announce John’s appointment as chair,” current Flutter chair Gary McGann. “John has had a stellar career in Kellogg Company, one of the most internationally renowned companies in the world.
“He brings with him an enormous wealth of leadership experience in strategic, financial, and operational matters.”
New CBI boss Rain Newton Smith says she raised sexual harassment concerns
09:02
The new boss of the embattled Confederation of British Industry (CBI) has said she “acted on” sexual harassment allegations and “supported staff who needed to raise them”.
Rain Newton-Smith began her role as the new director-general at CBI on Wednesday, telling victims that the organisation had let them down.
Barclays and AstraZeneca higher, FTSE 100 steady
08:14 , Graeme Evans
Barclays shares have risen 2% or 3.76p to 157.6p after a reassuring set of first quarter results helped boost confidence following the industry turmoil of recent weeks. The blue-chip stock is down by about 17% over the past three months.
Richard Hunter, head of markets at Interactive Investor, said: “The strength of these numbers and an unchanged outlook from the group will give some comfort to embattled investors, with the market consensus of the shares as a buy likely to remain intact.”
Other top flight movers in a busy session for corporate results included AstraZeneca, which rose 2p or 242p to 12,086p, and Unilever with a gain of 2% or 76p to 4447.5p.
Sainsbury’s slipped half a penny to 283.4p after its annual results, while Taylor Wimpey was broadly unchanged at 125.65p. The FTSE 100 index was 3.03 points higher at 7855.67.
WPP revenue grows but big tech firms cut back spend
07:57 , Daniel O'Boyle
Revenue grew by 4.9% at ad behemoth WPP, but it noted that some major US tech firms cut back spend.
Revenue came to £2.8 billion as the group won new contracts with firms such as Adobe, Ford, Maruti Suzuki, MondelÄz and Swissport.
However, it noted that “lower spend from some technology clients” hit its revenue in the US.
The group has also upped its focus on AI, which it used to create persoanlised ads in India during the quarter.
“Our focus on AI over the last five years is paying off, with many examples of our work with clients, using the main AI platforms, in-market today,” CEO Mark Read said.
“We remain on track to deliver our full year guidance, thanks to the competitiveness of our offer and our role as a modern, trusted partner to clients in a world further disrupted by technology.”
Deutsche Bank reports quarterly profit worth almost £2 billion
07:57 , Michael Hunter
Deutsche Bank reported a quarterly profit worth over £1.7 billion pounds today, for a period during which the German titan was briefly at the centre of worries about a new financial crisis.
The cost of insurance against default of its debt spiked higher in the first quarter after the government-brokered merger of Credit Suisse and UBS sent shockwaves throughout the global banking sector, amid speculation that the slide in government bond prices could hit it hard.
Today’s numbers go some way to dismissing such fears. Deutsche reported its eleventh consecutive quarter of profit growth, with profit before tax up 12% year-on-year to €1.9 billion. Net profit rose 8% to €1.3 billion. It was its best performance since 2013, in a positive sign for the wider sector after its worst period of stress since 2008.
James von Moltke, chief financial officer, said: “In the first quarter, we again proved the strength and resilience of Deutsche Bank in challenging conditions.”
AstraZeneca eyes expansion in China amid dip in sales
07:48 , Simon Hunt
AstraZeneca is eyeing expansion in China as the firm looks for new growth opportunities amid a decline in revenues.
The pharma giant announced new investment to build a manufacturing plant in Qingdao city to produce inhalers for COPD patients in China, a new partnership with Shandong province to establish an innovative rare diseases diagnosis and treatment hub, as well as a partnership with the Chinese Red Cross Foundation.
Total sales fell 4% to $10.9 billion in the first quarter of 2023, thanks in large part to a $1.5 billion drop in Covid-related medicines.
CEO Pascal Soriot said: "Our performance in emerging markets was particularly strong and I am impressed by the growth and pace of innovation I see in China, which underscores the competitive advantage of our leading presence in this country.”
FTSE 100 seen lower, focus on US GDP
07:48 , Graeme Evans
Brent crude futures stand at $78 a barrel this morning after recession fears caused the benchmark to slide by about 4% yesterday.
The uncertain economic outlook also contributed to a downbeat session on Wall Street, where the S&P 500 index finished 0.7% lower despite the confidence boost of better-than-expected earnings updates from Alphabet and Microsoft.
Risk sentiment continues to be driven by developments in the banking sector, with First Republic shares down another 30% and the wider industry benchmark of major lenders down for a fifth day in a row.
Investors fear that troubles in the regional banking sector will spread and that tighter lending conditions could also slow the US economy.
The focus now turns to this afternoon’s first quarter GDP reading, where expectations are for the US economy to have slowed from 2.6% in the fourth quarter to 2%.
The FTSE 100 index fell 0.5% yesterday and is forecast by CMC Markets to open 25 points to 7827.
Higher prices drive Unilever turnover growth
07:46 , Daniel O'Boyle
Unilever’s sales grew by 10.5% in the first quarter at Magnum-to-Marmite maker Unilever, a rise driven entirely by pricing growth.
Turnover came to €14.8 billion, thanks to pricing growth of 10.7%.
“Unilever has had a good start to the year, delivering another quarter of strong topline growth. Underlying sales growth accelerated to 10.5%, driven by price growth in response to continued high input cost inflation and an improved volume performance,” CEO Alan Jope said.
The increased sales come as the business expects an inflation hit to costs of €1.5 billion for the first half of the year.
Taylor Wimpey says ‘challenges’ remain for first time buyers as overall demand recovers
07:31 , Michael Hunter
FTSE 100 housebuilder Taylor Wimpey said today that first-time house buyers still face “challenges” as demand for new houses continues to recover from the low levels hit last year after the mini-Budget hit the market.
Jennie Daly, chief executive, said “good mortgage availability” was supporting the recovery, although the company remains “cautious of continued macroeconomic uncertainty”.
Its cancellation rate for the year to April 23 ticked up to 15% from 14%. It also said annualised cost inflation “remains high but is beginning to moderate from the 9-10% we reported in March,” in a trend it expects to continue.
Taylor Wimpey expects to complete between 9,000 and 10,500 homes in 2023, as “customer interest continues to recover”.
Sainsbury’s profits at top end of guidance
07:27 , Graeme Evans
Supermarket giant Sainsbury’s today revealed underlying profits of £690 million for the year to 4 March.
The figure is down 5% on a year earlier due to the previous year’s Covid boost to grocery volumes, as well as investment in the customer offer and operating cost inflation.
However, the profits haul is at the top end of the company’s £630m-£690m guidance and also 18% higher than its pre-pandemic level.
Revenues rose 5.4% to £35.1 billion, which includes like-for-like grocery sales growth of 7.4% in the final quarter as food prices soared. General merchandise sales fell 0.4% but Sainsbury’s said its Argos division gained share in a weak market.
Chief executive Simon Roberts said: “Our focus on value has never been greater and we have spent over £560 million keeping our prices low over the last two years.
“As a result, we are now the best value compared to our competitors that we have been in many years and we are delivering improved market share performance in Sainsbury's and Argos.”
Credit impairment charges more than triple to top £500 million at Barclays
07:20 , Simon Hunt
Credit impairment charges -- a measure of how much a bank sets aside to cover debt write-offs -- has more than tripled at Barclays to top £500 million in signs more and more account holders are getting into credit card debt amid cost-of-living pressures.
The charges rose to £524 million for the first three months of 2023, up from £141 million a year earlier. Barclays said the increase was as a result of “higher US cards balances” and “the continuing normalisation anticipated in US cards delinquencies.”
The British bank delivered first-quarter pre-tax profits of £2.6 billion, up 16% on last year, while income rose 11% to £7.2 billion.
CEO C. S. Venkatakrishnan said: “All three businesses have performed well with high quality income growth and double-digit returns. The momentum across the Group allows us to maintain a robust capital position, deliver attractive returns to shareholders, and support our customers and clients through an uncertain economic environment.”
Meta shares get a lift after first quarter revenue beat expectations
06:53 , Simon Hunt
Shares in Meta surged as much as 11% in aftermaket trading as the Facebook and WhatsApp owner posted first quarter revenues that surpassed analyst expectations.
The social media giant posted sales of $28.65 billion, almost a billion dollars more than the $27.67 billion estimated by analysts.
The firm’s advertising revenue was boosted by the growth of ad impressions, which rose 26% year-on-year.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: “Meta has seen its valuation receive another injection of goodwill as investors breathe a sigh of relief at the sight of a growing advertising revenue line.
“This surprise advertising recovery could suggest consumer behaviour isn’t slowing down as abruptly as thought, helping businesses to up their spending.”
Recap: Yesterday’s top stories
06:47 , Simon Hunt
Good morning. Here’s a summary of our top stories from yesterday:
The boss of Heathrow has slammed Civil Aviation Authority price cap rules as it posted a loss of £139 million.
GSK signalled it no longer expected any Covid-related revenues as the pharma giant turned to new treatments for fresh sources of revenue.
Housebuilder Persimmon was hit by a 42% plunge in first quarter home sale completions.
Reckitt Benckiser has appointed American company insider Kris Licht to become its next permanent CEO.
Today we’re expecting updates from:
J Sainsbury
AstraZeneca
Barclays
WPP
Currys
Taylor Wimpey
Unilever
