FTSE 100 Live 23 July: LVMH slips on disappointing sales, Spotify soars on subscriber growth
Michael Hunter,Simon Hunt and Graeme Evans
14 min read
Compass shares rallied today after the Wimbledon caterer served up more strong figures, helping the main London share index turn positive.
Mining stocks headed the other way, impacted by the uncertain China demand outlook.
On Wall Street, Tesla and Alphabet shares are in focus ahead of tonight’s quarterly results.
FTSE 100 Live Tuesday
Compass lifts profit guidance
Miners hit by copper price fall
Fullers eyes margins growth
LVMH disappoints as sales fall short of estimates
16:53 , Simon Hunt
Shares in Christian Dior and Givenchy owner LVMH fell as much as 3% in after-market trade as the fashion giant posted sales that fell short of market estimates, in the latest sign of troubles facing the luxury market.
Overall second quarter sales rose 1%, compared to market consensus predictions of 2.9% according to Bloomberg data.
Fashion and leather goods sales rose 1% compared to an estimate of 1.95%, while watches and jewellery sales slumped 4% compared to a predicted decline of 2.85%.
Compass clear winner as blue-chips end the day lower
16:45 , Simon Hunt
After a late-morning rally, the FTSE 100 reversed course this afternoon and finished the day lower, down 31 points to 8,167.
Catering company Compass was a clear winner today, with its shares rising some four and a half percent on news the Wimbledon food contractor was upgrading its profit expectations after taking on plenty of new business.
Porsche shares slip on fears of aluminium shortage
15:55 , Simon Hunt
Shares in Porsche slid as much as 7% in afternoon trade after the sports car maker cut its outlook for the year amid concerns over aluminium shortages.
The 911 maker said the shortage could mean it would not have enough parts and would stop production of some models.
The supply shortage was partly caused by a flooding at the production facility of one of its key suppliers, Porsche said. The issues could stall the production of as much as 10,000 vehicles in the second half of the year.
15:37
There are sunnier times ahead for the UK economy according to one of the City’s most closely watched forecasts, which today predicted better growth and interest rates under 5% by the end of the year.
The EY Item Club’s hotter summer outllook was “a significant upgrade” it said, compared with its last update in spring. It now expects growth of 1.1% for 2024, up from the 0.7% predicted in April.
Hywel Ball, EY’s UK chair, said: “The UK’s economic recovery is under way,” adding: “With inflation predicted to remain relatively stable and consumer spending set to climb, growth should continue … but it’s expected to be more steady than spectacular”
There was also renewed hope for borrowers, who have been dealing with the impact of the 16-year high on Bank of England interest rates at 5.25%, which sets the cost of millions of mortgages and other variable-rate loans and has been in place since August 2023.
Read more here
Spotify shares soar as most US stocks hold flat
14:56 , Simon Hunt
Shares in Spotify jumped as much as 13% in the opening minutes of trade on Wall Street after the music streaming service shot past market expectations.
The firm is on the cusp of hitting a quarter of a billion paid subscribers after membership numbers rose as much as 12% over the past year.
The S&P 500 .SPX opened higher by 0.02%, at 5,565.30, while the Nasdaq Composite .dropped 0.14%, to 17,982.74 at the opening bell.
Wall Street set to tick higher as earrings season rolls on
13:14 , Michael Hunter
New York’s stock market is on course for modest gains, with well-received numbers from some big-name companies keeping earnings season looking upbeat overall.
General Motors was in demand in pre-market trade, which marked its shares up by around 5% into the start of full trade.
The car maker beat forecasts for revenue and profit, helped by demand for gas-fuelled trucks.
Coca-Cola also sparkled, up over 1%, after it upped its sales forecasts.
Online music service Spotify added over 11% after its earnings and margins streamed past forecasts,
Overall, it left the S&P 500 on course to add just under 4 points to 5564.50.
FTSE 100 turns positive for the day as Compass points the way north
11:44 , Michael Hunter
A warm reception for updates from Compass Group, the world’s biggest contract caterer and Beazley, the major insurer, helped London’s FTSE 100 turn positive in morning trade.
There were also gains for some big dollar earners, helping offset falls in the mining sector that tracked weaker copper prices and brought the UK’s main stock index under the flatline in earlier trade.
But as midday approached, the FTSE 100 was up over 15 points at 8213.95, and overall rise of 0.2%.
Compass was up 108p at 2299p, topping the leaderboard. It came after the global canteen firm pointed to the upper end of annual profit forecasts thanks to levels of new business offsetting adverse currency impacts.
Beazley, which is a big name in cyber insurance, said it would not take a hit from Friday’s global IT outage. Its shares were up 12p at 662p.
Miners stayed underground. Rio Tinto was 47p softer at 4898p and the biggest single faller. Anglo American was down 26p at 2208p.
Breazley unfazed by fallout from Friday's IT meltdown
11:36 , Simon Hunt
One of the City’s biggest names in cyber insurance said today it would not take a hit from Friday’s dramatic IT meltdown.
Beazley provides a range of cover relating to internet-borne threats, from identity theft to protection for home computer systems. It has been a fast-growing part of the FTSE 100 firm’s business.
In an unscheduled update to the stock exchange today, Beazley said “based on what is known at this point” over the Microsoft CrowdStrike software outage, its guidance for the full-year “will not change”.
Beazley is part of the world famous Lloyd’s of London insurance marketplace. Its latest quarterly update, issued back in March, revealed it wrote premiums worth $253 million (£196 million) in the quarter to the end of March within its “Cyber Risks” business.
FTSE 100 miners hit by copper price fall, Filtronic extends gains
10:16 , Graeme Evans
Miners kept the FTSE 100 index in the red today, with Glencore and Anglo American down 2% after a four-day losing run left the price of copper at its lowest since April.
Commodities continue to be impacted by China’s weak demand outlook, with recent stimulus efforts by central bankers and political leaders doing little to improve the mood.
Rio Tinto also dropped 60.5p to 4884p, although the decline was limited by HSBC switching the Australian iron ore giant to a “Buy” recommendation and 5750p price target.
Alongside the miners, Asia-focused bank Standard Chartered fell by 9.8p to 720.6p and chemicals firm Croda International retreated by 69p to 4003p.
A shortened risers board included a recovery for easyJet, which put back 3.3p to 429.6p after falling 7% on the back of yesterday’s summer fares warning by rival Ryanair.
One of the best mid-cap performances was by science and technology recruitment firm SThree, which added 8.5p to 426.5p amid relief that it had kept guidance unchanged in the face of continued challenging jobs market conditions.
On AIM, Filtronic shares added another 2.25p to 76.5p after the wireless communications firm said it had secured more work from Elon Musk’s SpaceX.
The latest contract win worth about £7.1 million is for solid state power amplifier modules to support the ongoing deployment of SpaceX's Starlink constellation.
The shares of Leeds-based Filtronic have more than doubled since April’s announcement of a strategic partnership with the US firm.
Ofcom to review mobile spectrum fees
09:52 , Simon Hunt
Ofcom has announced a review into the annual licence fees charged to the country’s four big network operators for use of mobile spectrum bands following a request from BT.
The regulators approach to spectrum fees has been hotly contested in the past, with operators complaining that higher costs will lead to price rises for consumers.
After considering BT’s request, Ofcom said it concluded that “evidence suggests that a fee review is justified”.
What was set to be Google’s biggest-ever acquisition appears to have fizzled out after the tech giant’s $23 billion (£18 billion) takeover talks with Israeli cybersecurity firm Wiz were called off.
Wiz CEO Assaf Rappaport says the company took the decision to end discussions in order to return to its original plans for an initial public offering. In a note to staff seen by Reuters he said: "Saying no to such humbling offers is tough, but with our exceptional team, I feel confident in making that choice."
Wiz had already demonstrated its ability to secure its own sources of funding, having raised $1 billion from investors in May at a $12 billion valuation before Google approached the the firm with a much higher offer.
Austerity, said Alexei Sayle, is the notion that the financial crisis was caused by there being too many libraries in Wolverhampton.
In truth, the Chancellor behind the idea, George Osborne, didn’t impose as much austerity as he first fancied.
He saw that most government spending is non-negotiable, decided long ago.
And that the policy was extremely unpopular, even among the people to whom he thought it would appeal.
They liked their libraries and council swimming pools, same as everyone else.
Yesterday, his latest successor Rachel Reeves said she planned to “level” with the public about the “fiscal mess” the last government has left her with.
The state of the nation’s finances is not great, but the notion that she couldn’t see how things looked before she took office is daft.
It’s a political ruse -- she’s hardly the first newly elected politician to try it out.
The question for Reeves will be, as an upside-down Osborne, how much spending she can shove through, rather than how many cuts she can get away with.
If she had decided to be truly bold, to reinvent the notion of government spending in the public mind, to say that there is no limit to what it can pay for, if it so chooses, then she’d have some proper options.
Instead, in the name of appearing prudent, she will be shackled by financial rules she needn’t have agreed to, but which keep the City (relatively) happy.
Which means her infrastructure spending may do less good than Osborne’s austerity did harm.
Chancellors don’t have much wiggle room, which is why they play politics.
A whole new debate about what government money is, where it comes from, and what we should spend it on would be better.
At this point in the argument, someone will say the government can’t spend money it doesn’t have.
It can, it does, it shall. The only real question is whether it should. Usually, it’s cheaper for the government to spend money it is inevitably going to spend anyway on prevention now rather than treatment later.
Compass leads FTSE 100 as miners come under pressure
08:25
Compass shares are 73.5p higher at 2264.5p in the FTSE 100 index after the catering giant upgraded profits estimates for the year.
Cyber insurer Beazley also lifted 12.5p to 662.5p as it reiterated current guidance in the wake of Friday’s global IT outage.
The FTSE 100 index fell 25.53 points to 8173.25, with miners the biggest factor after declines of more than 1% for Glencore, Anglo American and Rio Tinto.
In the FTSE 250, STEM recruitment firm SThree rallied 14.5p to 432.5p after it left guidance unchanged despite continued challenging conditions.
Facilities management firm Mitie, which reported continued trading momentum ahead of its AGM later today, fell back 0.6p to 122p.
Catering giant Compass serves up 10% revenue rise but strong pound eats into profits
07:30 , Michael Hunter
Revenue at FTSE 100 contract caterer Compass rose almost 10% in the third quarter and said that “industry trends remain strong”.
But the company which serves up lunch at the Wimbledon tennis championship and food for the Governors’ Ball at the Oscars also pointed to the impact of currency markets, where the pound is trading around year-highs:
“If current spot rates were to continue for the remainder of the year, foreign exchange translation would negatively impact 2023 revenue by $106m and operating profit by $17 million,” it said.
The £37 billion firm said net new business met its expectations and it now expects “underlying operating profit growth to be above 15% on a constant-currency basis, with organic revenue growth above 10%.”
Fullers eyes margins growth as inflation cools
07:29 , Simon Hunt
London-based pub chain Fullers has said cooling inflation is help boosting its margins as it reported a rise in sales.
Like for like sales growth stood 5.3% for the 16 weeks to 20 July.
CEO Simon Emeny said: “I am delighted to see our sales growth momentum continue, particularly against the backdrop of easing inflation, which will help us to grow margins and profit, as well as revenue.
“You can feel the positivity across the business, with our team members working energetically to drive our continued success.”
The firm added it had completed the sale of 37 non-core pubs to Admiral Taverns for a cash realisation of £18.3 million on top of the sale of The Mad Hatter in Southwark for a total consideration of £20 million.
US tech giants revive but FTSE 100 seen lower, Asia stocks struggle
07:07 , Graeme Evans
Nvidia and Tesla shares rose by 5% last night as a return to form for Wall Street’s mega-cap stocks helped the S&P 500 index to finish 1.1% higher.
The Nasdaq lifted 1.6% and the Dow Jones Industrial Average by 0.3% but cybersecurity firm CrowdStrike fell another 13% after Friday’s IT outage.
The tech sector rebound comes ahead of results after tonight’s closing bell by Tesla and Google parent company Alphabet.
London’s FTSE 100 index rose by 0.5% on Monday but is not expected to follow the US lead, with futures pointing to a decline of 16 points to 8183.
Asia markets are also struggling, with the Hang Seng index failing to build on an initial strong start to later stand about 0.6% lower.
Recap: Yesterday's top stories
06:50 , Simon Hunt
Friday’s widespread systems outage as a result of the CrowdStrike software update into devices running Microsoft Windows laid bare the current fallibility of the regulatory news reporting service for London-listed companies, argues John Blowers, managing director of the investment database Investegate, in the Standard this week.
While the majority of the primary information providers were unaffected by the move, the London Stock Exchange’s own Regulatory News Service – commonly known as RNS – failed to disseminate the usual flood of corporate updates from 7am.
The RNS service was keen to explain to issuers their responsibility in terms of how to ensure they met minimum requirements. But when it came to the news flow of price sensitive information, subsequent market impacts exposed the shortcomings here.
Technical glitches are inevitable, but the real failure here stems from the fact there is no single source comprehensively covering UK companies and their filing dates.
Here’s a summary of our top headlines from yesterday:
BT fined £17.5 million by Ofcom for emergency call failings. Ofcom says BT is “Ill-prepared to respond to a catastrophic failure of its emergency call handling service.
Ryanair shares fall as airline warns: “While Q2 demand is strong, pricing remains softer than we expected, and we now expect Q2 fares to be materially lower than last summer.”
Vodafone sells a 10% stake in mobile tower business Vantage Towers for £1.1 billion, adding it will use the cash to help bring down its debts.