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MARKETS LIVE BLOG:

S&P 500 HOLDS NEAR RECORD WITH BANK EARNINGS IN FOCUS

Boeing edges up as company moves to issue new shares and raise up to US$25 billion

FTSE 100, European and US stocks in the green after Biden steps back in favour of Harris

How major markets are performing on Monday

Lucy Harley-McKeown
Updated

The FTSE 100 and European stock indexes bounded upwards on Monday, following the news that President Joe Biden will step back from running for the next US elections, paving the way for his VP Kamala Harris on the Democratic ticket.

  • The FTSE 100 (^FTSE) rose 0.8% by the end of the session, while the DAX (^GDAXI) was 1.6% higher in Germany and the CAC (^FCHI) ticked 1.4% higher.

  • The pan-European STOXX 600 (^STOXX) was up 1.2%.

  • London's premier index was pushed up by news that business bosses are mulling a Rentokil takeover. Gambling stock Entain also rose 3.5% in early trade after it named Gavin Isaacs as its new CEO.

  • Over in the US, the S&P 500 (^GSPC) rose 0.7%, the Dow (^DJI) ticked 0.3% into the green and the Nasdaq (^IXIC) jumped 1% by market close in Europe.

  • Investors are surveying a changed political landscape after Biden called off his reelection bid on Sunday and backed his vice president, Kamala Harris, to replace him as the Democratic nominee. The political shock could inject more volatility into an already battered stock market, distracting focus from this week's flood of earnings and key inflation release.

  • Biden's move, while not unexpected after weeks of pressure, is seen on Wall Street as eroding the odds of Republican contender Donald Trump securing a return to the White House.

LIVE COVERAGE IS OVER15 updates
  • Lucy Harley-McKeown

    Thanks for reading!

    Head over to our US site for more market moving news. See you tomorrow!

  • Lucy Harley-McKeown

    Positive sentiment ripples across market

    Chris Beauchamp, chief market analyst at online trading platform IG says:

    “Investors have had a weekend to digest the moves in markets last week, when a rotation to small caps finally seemed to be upon us. At present there seems to be little impact from Biden’s decision to withdraw from the 2024 election, with investors likely waiting for the first real Harris v Trump polls to emerge. Until then, it seems a ‘business as normal’ mentality prevails, given that Trump is still riding high after the attempt on his life and the Republican convention.”

  • Coca-Cola tipped for bubbly quarter

    Yahoo Finance's Brooke DiPalma reports:

    Investors hope Coca-Cola (KO) will hold on to its momentum and deliver a bubbly quarter on Tuesday.

    Based on Bloomberg estimates, Wall Street expects to see revenue come in at $11.76 billion, down 1.75% compared to last year. Earnings per share are estimated to be at $0.81, up 3.31% year over year.

    That's compared to Q1, when Coca-Cola reported $11.3 billion in revenue, beating Wall Street estimates of $10.96 billion, while its earnings per share of $0.72 also topped expectations of $0.70.

    Price increases taken by the company are set to drive growth yet again this quarter, per CFRA analyst Garrett Nelson.

    Read more here.

  • Lucy Harley-McKeown

    How stocks are faring at the open in the US

  • Lucy Harley-McKeown

    UK rate cut decisions 'finely balanced'

    As investors look to the August meeting, here's what's expected, from Enrique Diaz-Alvarez, chief financial risk officer at global financial services firm Ebury:

    “Interest rate markets are continuing to price in a 50% chance of a first rate cut at the Bank of England August meeting. Last week's inflation data came up slightly higher than expected, but the impact on the pound was offset by disappointing June retail sales.

    “All in all, the decision remains finely balanced, and there is likely to be heated debate among committee members as to the timing and pace of policy loosening.

    “We are still pencilling in an August cut, although acknowledge that recent macroeconomic news has shrouded this view in an element of doubt.

    “The main macroeconomic reference this week will be the PMI surveys, which are expected to remain consistent with healthy expansion of domestic demand.

    “Generally resilient domestic demand and the prospect for better ties with the European Union following the election lead us to maintain an optimistic view on sterling, regardless of the BoE’s August rate decision.”

  • Lucy Harley-McKeown

    Reuben family, former Chancellor preparing bid for Telegraph: Report

    FILE PHOTO: British Minister without Portfolio and Chairman of the Conservative party Nadhim Zahawi looks on outside the Conservative Campaign Headquarters (CCHQ), in London, Britain, January 24, 2023. REUTERS/Toby Melville/File Photo
    FILE PHOTO: British Minister without Portfolio and Chairman of the Conservative party Nadhim Zahawi looks on outside the Conservative Campaign Headquarters (CCHQ), in London, Britain, January 24, 2023. REUTERS/Toby Melville/File Photo (Reuters / Reuters)

    Sky News has the scoop on a fresh bid for the Telegraph and Spectator, in what could be a £600m deal.

    The report, states that former Tory chancellor Nadhim Zahawi approached billionaire backers in the hope of financing an offer for the pair of titles, citing sources.

    Zahawi approached a number of parties, including the Reuben family, the report notes. The Reubens already own a stake in Newcastle United Football Club alongside a large property portfolio.

  • Lucy Harley-McKeown

    Stocks to watch at the open: Starbucks

    Starbucks shares continue to surge – now in pre-market trading – after a report in the Wall Street Journal that activist investor Elliot bought a sizeable stake in the company.

    The activist hedge fund and coffee chain have been holding private discussions in the last weeks on ways to move the chain’s stock price higher.

    The Journal could not learn the size of Elliott’s position nor its specific demands, but noted it was possible a settlement could be reached.

    Elliott is one of the most prolific activist investors and one of the largest hedge funds in the world. The firm has taken up a number of sizable positions in recent months, including stakes at Southwest (LUV), SoftBank (9434.T), Johnson Controls (JCI) and Texas Instruments (TXN).

    Starbucks’ stock price took a hit in April when the chain, the world’s biggest coffee company by location and sales, reported a drop in same-store sales for the first time in nearly three years.

  • Lucy Harley-McKeown

    Stocks to watch at the open: Nvidia

    Shares in Nvidia bounced back in pre-market trading, recouping from Friday losses which were sparked by fears the AI darling's rally might be losing steam.

    New Street Research recently downgraded the stock to Neutral from Buy and set the stock’s price target at $135 (£104.41).

    “We downgrade the stock to Neutral today, as upside will only materialise in a bull case, in which the outlook beyond 2025 increases materially, and we do not have the conviction on this scenario playing out yet.” New Street analyst Pierre Ferragu said.

    A recent report from Goldman Sachs suggested that AI might not be quite as game changing as the headlines suggest. And that investing big into AI stocks at today’s prices might disappoint.

    "Do you know what this all reminds me of? Yes, the internet revolution, and the dot com bubble that it created. I lived, and invested, through it," John Mackey, former CEO of Whole Foods Market, said.

    Still, the chip manufacturer is moving markets, with Serve Robotics (SERV) seeing its stock price skyrocket by 140% on Friday following the announcement that Nvidia had acquired a substantial stake in the company, which specialises in low-emissions sidewalk delivery robots.

  • Lucy Harley-McKeown

    FTSE stocks hit record high dividends

    Our LaToya Harding writes:

    UK dividends hit a new record in the second quarter of 2024, according to the latest dividend monitor from global financial services company Computershare.

    Payouts, which were boosted by special dividends, rose 11.2% year-on-year to an all-time quarterly high of £36.7bn.

    The underlying growth rate, which strips out these one-offs, was up just 1% thanks to a large cut in mining payouts, but regular dividends still reached a new record of £32.5bn.

    Excluding the weak mining sector, underlying growth came in at 8.6% in the three month period compared with the same time a year ago.

    Some 16 out of 21 industry sectors saw higher payouts, with median dividend increase at company level at 5.4%.

    READ MORE

  • Lucy Harley-McKeown

    Cost of living pressures weigh on UK savings: ONS

    The ONS has new figures on how household savings have fared since COVID. They say:

    • The UK household saving ratio peaked at 27.4% from Apr to June 2020, mainly because of the suppression of consumption opportunities during the coronavirus (COVID-19) pandemic;

    • Having decreased to 6.6% in the second quarter 2022, the ratio has risen steadily to 11.1% in the first three months of 2024.

    • These increases have coincided with cost of living pressures, weak consumer confidence and slower growth in household consumption.

    • Estimates of the total value of excess saving accumulated by UK households since the start of the pandemic range from £143bn to £338bn (7.9% to 18.7% of household annual total resources).

    • UK households have been reluctant to spend these accumulated savings, unlike in the US where it has been an important factor in supporting household consumption and economic growth.

  • Lucy Harley-McKeown

    Ryanair stock slides following profit dip and fare cuts

    Ryanair stock was among the top losers on Monday in Europe after it reported that its quarterly profits had dipped due to its lower pricing.

    The budget airline said that prices in the spring period meant its profits fell nearly 50% to 360m euros (£303m) for the three months to June 30. Fares will also fall over summer.

    Year-on-year, the average fare is down 15% to 42 euros. Passenger traffic, meanwhile, is up 10% to 55.5m.

    Its share price fell with its prices, down 12.8% by mid-morning on Monday.

  • Lucy Harley-McKeown

    Rentokil surges on takeover reports

    Rentokil is among the top stocks in the FTSE 100 this morning, amid reports former BT CEO Philip Jansen is mulling a takeover bid.

    The Sunday Times reported the business mogul is looking at teaming up with private equity firms with eyes on a takeover. Rentokil was up more than 12% by 8.30am in London.

  • Lucy Harley-McKeown

    Overnight in Asia

    It was a mixed day of trade in Asia with a selloff for Japan's Nikkei (^N225), and positive movements for the Hang Seng (^HSI) in Hong Kong.

    The selloff in Japan was led by microchip stocks, which have been hot in recent weeks due to AI hype. The moves mirror those of US-listed chip giants like Nvidia, which finished Friday 2.6% lower.

    The Nikkei has come off all-time highs of above 42,000 points earlier in July.

  • Lucy Harley-McKeown

    US stock futures

    Futures for the Dow, S&P 500 and Nasdaq rose on Monday morning — a positive note for US stocks which ended last week in the red.

    The moves come following news that President Joe Biden would drop out of the race for the next ballot, instead endorsing his current VP Kamala Harris. Top Democrats have since also backed Harris for the ticket.

    Meanwhile, the dollar slipped and treasuries rose as political uncertainty crept back

  • Lucy Harley-McKeown

    Good morning!

    Hello from London. Never a dull moment here, with President Joe Biden dropping out of the running for the Democratic slate in the upcoming elections last night.

    Fairly light on economic data today, although there are some company earnings to look out for, including financial updates from Ryanair and Verizon.

    Tomorrow is a bigger day, with quarterly or half-year results from the likes of LVMH, Tesla, Visa and Alphabet.

    Let's get to it.