Yahoo Finance FTSE 100 Live: Recession-bound UK economy declines 0.3% in Q3
The recession-bound UK economy contracted by 0.3% in the third quarter of the year, slightly more than originally thought.
Revisions to output in manufacturing and construction pushed the overall GDP figure down from a previous estimate of 0.2% lower, the Office for National Statistics said.
The period is likely to mark the beginning of a recession in the UK as higher interest rates and inflation take their toll on demand.
Crooks pose as Goldman Sachs bankers on WhatsApp to promote dodgy crypto schemes
15:30 , Simon Hunt
Hundreds of WhatsApp users are being targeted by crooks posing as Goldman Sachs employees as part of a ploy to get them to invest in crypto schemes, the Standard has learned.
The fraudsters invite unsuspecting WhatsApp users to an online chat group in which they introduce themselves as executives of the Wall Street bank before telling group members they will “provide investment training strategies for free”.
“I hope Goldman Sachs can become your trusted brokerage scheme,” one scam message reads. “As a global investment firm, we work together to create long-term value for our investors…establishing a correct investment philosophy and ensuring you can obtain stable and generous returns is the ability that every investor needs to have.”
The scammer then promises to “provide a Bitcoin perpetual trading contract strategy” before directing users to a bogus crypto platform where they can deposit funds. Other users in the group, also suspected to be scammers, pledge to invest into the crypto scheme, adding: “I have personally witnessed how Goldman Sachs can help you.”
Brits lost more than £600 million to fraud in the first half of 2022, according to data from UK Finance. More than 5000 people fell victim to investment scams over the period, losing a total £61.2 million, up almost 30% on 2020.
Wall Street stocks open lower amid fresh concerns over Fed rate rise
14:54 , Simon Hunt
Stocks opened lower in the opening minutes of trading on Wall Street as new economic data raised fresh concerns over a steeper interest rate rise by the Federal Reserve.
The final estimate of third-quarter U.S. GDP showed it increased 3.2%, above the previous estimate of 2.9%, while the number of Americans filing for state unemployment benefits increased to 216,000 last week, according to a US Labor Department report, which came in below the market estimate of 222,000, suggesting the labour market remains tight.
The Dow Jones Industrial Average fell 0.43%, while the S&P 500 opened lower by 0.65% and the Nasdaq Composite dropped 1.51%.
Wall Street set for opening fall even after US growth data revised higher
13:57 , Michael Hunter
New York’s S&P 500 was on course for an opening fall, even after an upward revision to US growth data for the third quarter.
A mixed run of corporate updates and economic data has left traders in uncertain mood into the Christmas break, and revised growth data showing the economy grew by 3.2% rather than 2.9% was not enough to move the dial on the broad stock index in futures trade. It was called down by 22 points, or 0.6%, to 3883.0.
FTSE 100 midday movers: Admiral Group tops the leaderboard
13:48 , Michael Hunter
Insurance Group Admiral was the biggest single riser on the FTSE 100, with insurance and financial stocks in demand alongside dollar earners. Ocado moved back to the bottom of the market, while United Utilities made the biggest single fall.
According to Russ Mould, investment director at AJ Bell, “The markets seem to be heading into Christmas on a slightly more hopeful note amid signs the US consumer is proving more resilient than feared,”
Bankers poised for sharp drop-off in year-end bonuses
13:08 , Simon Hunt
Bankers in London and New York are poised to suffer a sharp downturn in pay when their year-end bonuses are awarded in the coming weeks as a stock market downturn and a fallow deals and IPO market help dampen compensation packages on Wall Street and the Square Mile.
Banker bonuses could fall as much as 50% this year, according to pay estimates obtained by Reuters, in a dramatic change in fortunes for city financiers who in 2021 had benefitted from some of the most generous pay packages in over a decade amid a stock market boom.
Goldman Sachs bankers may be among the hardest hit, with compensation falling as much as 45%, according to the estimates, while pay at Citi and Bank of America is set to fall 35% and 30% respectively.
The US-based Nasdaq Composite index has fallen by almost a third since the start of the year, while London-based IPOs have fallen by some 90% from £14.3 billion to £1 billion, according to data published by KPMG.
FTSE 100 up on US optimism, JD Sports continues strong run
09:57 , Graeme Evans
Cheer from the US economy today kept London’s FTSE 100 index on course to finish the year higher than where it started.
The festive rally that began yesterday with strong sales from trainers giant Nike continued last night when US consumer confidence improved more than expected, boosting hopes of a softer landing for the world’s largest economy.
A 1.5% surge for the S&P 500 led to strong trading in Asia and Europe, with the FTSE 100 index up 38.41 points to 7535.73.
Commodities exposure and the stronger US dollar means London’s overseas-focused top flight has outperformed this year, having started at 7384.
JD Sports Fashion kept its place on today’s risers board, adding 2p to 122.15p on top of the 6% jump seen yesterday following the Nike update There were also rallies of around 1% for Shell and Ocado, but defensive stocks were out of favour as United Utilities weakened 17p to 1001p.
The UK-focused FTSE 250, which started the year at 23,480, was 81.25 points higher at 18,944.90.
Risers included electronic components specialist discoverIE, which put on 5p to 736p following a deal to buy US sensor maker Magnasphere for $22 million (£19.1 million). It takes the company’s number of acquisitions in the last 12 years to 21.
Broker Peel Hunt, which has a 1000p target price, said: “This is another attractive little deal from discoverIE, and we see it as reassuring that M&A activity levels remain high, plus it is good to see further expansion in the US.”
AIM-listed Seeing Machines, which develops in-car driving monitoring technology, rose 1% or 0.07p to 6.32p after it secured a $32 million (£26.5 million) contract extension with a European automotive customer.
Ten leading manufacturers covering more than 160 vehicle models use the technology as they prepare for European laws that will require all new cars to have a camera-based driver monitoring system from 2024.
Deloitte slapped with fine of almost £1 million over SIG audit
09:48 , Michael Hunter
The City accounting watchdog fined Deloitte over £900,000 today for failings over the big four firm’s auditing of the building materials group SIG.
The Financial Reporting Council also fined Deloitte partner Simon Manning over £36,000 after he and the company admitted breaches concerning supplier rebates, a form of business incentive, and the timing of cheque deposits around the year-end . Deloitte did not “exercise sufficient professional scepticism” over SIG’s accounts for 2015 and 2016, the FRC said.
It added that the breaches were “all the more serious” because it had “highlighted these complex supplier arrangements … for attention”.
Deloitte said “We have learnt from the matters identified by the FRC.”
Around half of all adults in Great Britain report buying less when food shopping, ONS says
09:48 , Simon Hunt
Around half of all adults in Great Britain report buying less when food shopping, according to new data from the Office for National Statistics, as soaring food inflation forces consumers to make tough decisions about what to buy at the supermarket.
61% of those in the most deprived areas buying less food compared with last year, as opposed to 44% in the least deprived areas, according to public opinions and social trends data collected by the ONS.
With Christmas just days away, over four in five adults (81%) reported to the Food Standards Agency (FSA) that they were concerned about the cost of food during Christmas and New Year – up from 62% in the same period last year.
Food and non-alcoholic drink inflation rose by 16.5% in the 12 months to November 2022, the highest increase since September 1977 (17.6%), according to data from the ONS Consumer Price Inflation bulletin.
Rising food prices may even have a knock-on effect on health, with nearly one-quarter (23%) of survey participants saying they skipped or reduced the size of a meal because they could not afford to buy food, according to the FSA.
Wall Street cheer lifts FTSE 100, Prudential up 1%
08:30 , Graeme Evans
The FTSE 100 index is in positive territory after the Dow Jones Industrial Average and S&P 500 both closed up by around 1.5% last night.
Wall Street traders were boosted by an improved consumer confidence reading and the earnings resilience in updates by Nike and FedEx.
Asia and European markets followed the lead as Hong Kong’s Hang Seng rose by 2% and the FTSE 100 improved 25.69 points to 7523.55.
JD Sports Fashion featured on the blue-chip risers board for a second session in a row after Wednesday’s earnings update by Nike boosted confidence. Shares rose 6% yesterday and were up another penny at 121.15p.
There were also gains of around 1% for Prudential, Lloyds Banking Group and B&Q owner Kingfisher. Defensive stocks led the fallers board, with United Utilities off 16.5p to 1001.5p.
The FTSE 250 index was close to its opening mark, up 16.62 points at 18,880.27. Shares in electronic components supplier discoverIE rose 3% after it announced the acquisition of US sensor manufacturer Magnasphere for $22 million (£19.1million).
Peppa Pig takes a hit from the strong dollar as Character Group warns on Christmas sales
08:06 , Michael Hunter
Character Group, the toy brand that is best known for selling Peppa Pig, issued warning on Christmas sales today after taking a hit from currency movements and pointed to a slowdown in its US markets.
The company said: “Trading conditions have become more challenging and sales have slowed in the lead up to Christmas. Whilst this has been a trend in both our domestic markets and in our other major international markets, the effect has been particularly discernible in the USA.”
It said the strength of the US dollar meant its Scandinavian markets had a “broadly comparable outcome” as it reported a slip in group-wide profits to £11.4 million from £15.3 million, from revenue of £176.4 million, up from £140 million.
Its shared opened down 48p to 371p, a drop of 11%.
The New Malden based-firm has imported and sold toys for major brands since 1991. Alongside Peppa, it sells Goo Jit Zu, a range of squashy action heroes and Jiggly Pets.
Jon Diver, joint managing director, predicted flat domestic sales in the second half of the current financial year, but pointed to the prospect of better profits as some costs look set to fall: “ The substantial reductions in freight rates, together with reduced costs of production from factories in China and strengthening of Sterling against the US Dollar from its recent low point has given the Board considerable optimism for a second half rebound.”
Two FTX executives plead guilty to fraud as US attorney urges others involved to come forward
07:48 , Simon Hunt
Two top executives at collapsed crypto fund FTX have pleaded guilty to fraud, ramping up pressure on founder Sam Bankman-Fried as he arrives in the US to face similar charges.
Caroline Ellison, former CEO of Alameda Research, and Gary Wang, co-founder of FTX, pleaded guilty to defrauding investors in the crypto trading platform and were now co-operating with the US government.
In a video posted to Twitter, Manhattan U.S. Attorney Damian Williams said: "If you participated in misconduct at FTX or Alameda, now is the time to get ahead of it."
"We are moving quickly and our patience is not eternal."
Statement of U.S. Attorney Damian Williams on U.S. v. Samuel Bankman-Fried, Caroline Ellison, and Gary Wang pic.twitter.com/u1y4cs3Koz
— US Attorney SDNY (@SDNYnews) December 22, 2022
GDP fall revised to 0.3%, manufacturers struggle
07:45 , Graeme Evans
Weakness in the manufacturing sector was one of the factors behind today’s revised figures showing a 0.3% contraction in the UK economy in the July to September period.
The services sector grew by 0.1% but production fell by 2.5% following falls in all 13 manufacturing sub-sectors. There was also a decline in the construction sector of 0.2%, which compared with a previous estimate of 0.6% growth.
The Office for National Statistics added that household spending fell in real terms for the first time since the final Covid lockdown in spring 2021.
The level of real GDP in the quarter is now estimated to be 0.8% below where it was before Covid-19 struck in the fourth quarter of 2019.
The weaker quarterly performance is likely to mark the start of a recession as higher interest rates and inflation take their toll on demand.
