Yahoo Finance FTSE 100 Live: Gilt yields surge again after blowout US job report fuels new Fed rate fears
Figures on US wage and employment growth today but interest rates front of mind again at the end of a volatile week for markets.
Ahead of the potentially market moving release, traders mulled takeover speculation at Aviva after a big jump in the insurer’s share price.
Other developments today have included results by pub chain JD Wetherspoon and a reassuring trading update by banknote printer De La Rue.
FTSE 100 Live Friday
Jobs figures keep US rates in focus
Aviva bid talk lifts shares
De La Rue “marginally” ahead of guidance
Bond yields surge again after US jobs report
Friday 6 October 2023 16:17 , Daniel O'Boyle
The latest job report led to a new surge in global bond yields, amid fears that the Fed will keep interest rates higher for longer.
The yield on a 10-year gilt rose back above 4.6%, and the 30-year gilt yielded more than 5% again, approaching levels not seen since 1998.
In the US, the 10-year treasury yield rose again to close to 16-year highs.
London stocks initially fell, but regained ground.
US job gains give Fed ‘headache'
Friday 6 October 2023 16:12 , Daniel O'Boyle
The |US non-farm payrolls report exceeded expectations again, as the world’s largest economy added 336,000 jobs.
Neil Birrell, Premier Miton Chief Investment Officer and lead manager of the Premier Miton Diversified Growth Funds, said:
“This employment data release was important in several ways, not just in giving us a clue as to the strength of the economy, but perhaps more to where bond yields and equity markets might be heading. Payrolls beat estimates by a big margin; the economy looks hot and the “higher for longer” narrative will probably switch back to simply ”higher”. That is likely to send bonds and equities lower. This will give the Fed a headache and the rest of us plenty to think about; the US economy is showing its resilience yet again.”
Citizens Advice seeing more working people being pulled into the red
Friday 6 October 2023 12:12 , Daniel O'Boyle
Citizens Advice says it is seeing a growing number of people in work, who previously had just enough to get by, being pulled into the red.
While people have generally seen their wages increase, essentials have risen at a faster pace, the charity said.
It added that people who are self-employed have been particularly hit by “negative budgets” – meaning they have more money going out on essentials than coming in.
Judicial review sought over ticket office closures
Friday 6 October 2023 11:19 , Daniel O'Boyle
Two disabled rail passengers have applied for a judicial review of a consultation on controversial plans to close nearly all ticket offices in England.
Sarah Leadbetter from Leicestershire, who is registered blind, and Doug Paulley, a wheelchair user from West Yorkshire who has hearing loss, say the consultation was unfair as it did not give people the opportunity to meaningfully respond to the proposals.
The consultation was originally opened in July for 21 days but was extended to September 1 after a huge response from the public.
FTSE 100 still down for the week despite today’s gains
Friday 6 October 2023 11:18 , Daniel O'Boyle
The FTSE 100 may be on for a second consecutive strong day, but it is still set to end the week down 120 points after chaos in the bond markets in the week’s first half.
The index is currently at 7,487.87, up 0.5% for the day. But that’s still down 1.6% for the week.
Will Lloyds rescue Metro?
Friday 6 October 2023 11:13 , Daniel O'Boyle
Could Lloyds bank make a bid to rescue struggling Metro? The traditional banking giant has reportedly been approached about buying the challenger’s mrotgage book.
Our finance editor Simon English predicted Lloyds coming to the rescue of Metro all the way back in 2019, when Metro’s shares were four times what they were today.
“Metro Bank shares have crashed so spectacularly, off again by 1.6p to 201.2p, that it is worth just £346 million. This means Lloyds boss Antonio Horta-Osorio could buy it with the change in his back pocket were he minded,” English wrote at the time.
NS&I withdraws ‘best buy’ bonds paying 6.2% interest from general sale
Friday 6 October 2023 10:41 , Daniel O'Boyle
NS&I has withdrawn one-year bonds paying 6.2% interest from sale, after nearly a quarter of a million savers snapped them up in just over five weeks.
Launched on August 30, NS&I’s Guaranteed Growth Bonds and Guaranteed Income Bonds pay 6.2% AER (annual equivalent rate), fixed for a year.
The bonds have been sitting at the top of “best buy” tables, but NS&I said that, as of Friday, the bonds are no longer on general sale.
Wetherspoons jumps back to profit on back of bumper food sales
Friday 6 October 2023 10:18 , Daniel O'Boyle
Pub giant JD Wetherspoon has swung back to a significant profit as higher food sales helped its post-pandemic sales recovery continue.
Analysts said on Friday that the chain will “benefit from trading down” by customers squeezed by the rising cost of living.
The company, which runs 826 pubs across the UK, saw total sales rise by 10.6% to £1.92 billion for the year to July 30.
Aviva bid talk lifts shares, FTSE 100 higher
Friday 6 October 2023 10:09 , Graeme Evans
Aviva takeover chatter, a recovery for Metro Bank shares and a big stake sale by GSK today meant no let up for City traders at the end of a volatile week.
Shares in Aviva jumped 8% or 31.4p to 419.7p, valuing the FTSE100 company at over £11 billion, following speculation of at least two potential suitors and one reportedly mulling a 600p a share proposal.
Possible bid candidates, according to this morning’s Times newspaper, include Germany’s Allianz and Intact Financial Corporation of Canada.
The reported interest comes a few weeks after boss Amanda Blanc told shareholders “there is so much more Aviva can and will achieve".
Other insurers were lifted by talk of industry consolidation as Legal & General rallied 3% or 5.7p to 216.1p and Prudential gained 17.6p to 871.4p.
The FTSE 100 index added 22.76 points to 7474.30 and the FTSE 250 by 68.17 points to 17,668.15 after a week of jitters over higher-for-longer global interest rates. Other risers included mining giant Rio Tinto, which surged 69.5p to 5027p as UBS ditched its “sell” recommendation.
Elsewhere in the top flight, GSK put on 6.6p to 1489.6p after raising £885.6 million through its latest placing of Haleon shares at a price of 328p. The consumer healthcare business, a former GSK and Pfizer joint venture, dropped 2p to 334.25p.
Metro Bank shares rallied 7% or 2.7p to 40.2p after Sky News reported that the lender had sounded out Lloyds Banking Group and NatWest about buying some of its mortgage book, a move that would reduce its capital requirements. Shares fell 27% yesterday.
The City fund ‘dinosaurs’ still gobbling up billions for poor performance
Friday 6 October 2023 09:33 , Daniel O'Boyle
Big City funds are eating up 20% of the returns earned by small investors and face extinction unless they reform, analysis for the Evening Standardsuggests.
Dubbed “investment dinosaurs” some of the oldest and grandest names in the City risk losing customers to cheaper funds which track the stock market or to the new breed of retail investor confident to pick their own shares.
SCM Direct measured the performance over the past five years of £653 billion worth of funds managed by Abrdn, Schroders, Quilters, M&G, Jupiter, Liontrust, Rathbones, iShares and Vanguard.
Aviva shares lead FTSE 100, Metro Bank up 9%
Friday 6 October 2023 08:43 , Graeme Evans
Aviva shares have jumped by 7% or 26.6p to 414.9p amid City speculation linking the insurance giant to takeover interest.
The Times reported this morning that at least two potential suitors are looking at the business, with at least one reportedly mulling a £6 a share proposal.
Other insurers were lifted by the industry consolidation talk as Legal & General rose 5.6p to 216p and Prudential improved 16.2p to 871.4p.
The FTSE 100 index gained 26.30 points to 7477.84, with mining giant Rio Tinto up 80.5p to 5038p after analysts at UBS removed their “sell” recommendation.
Elsewhere in the top flight, GSK put on 7.4p to 1490.4p after it secured £885.6 through its latest placing of Haleon shares at a price of 328p. The consumer healthcare business, a former GSK and Pfizer joint venture, dropped 3p to 333.25p.
The FTSE 250 index improved 105.61 points to 17,705.59, led by a 5% rise for private equity firm Bridgepoint.
Metro Bank shares rallied 9% or 3.25p to 40.75p after Sky News reported that the lender had sounded out Lloyds Banking Group and NatWest about buying some of its mortgage book in a move that would reduce its capital requirements.
Bankman-Fried gave his own hedge fund special privileges: FTX trial
Friday 6 October 2023 08:34 , Simon Hunt
Sam Bankman-Fried gave special trading privileges to his own hedge fund on crypto exchange FTX before the company collapsed, a court in New York has heard.
Gary Wang, a senior member of FTX and a co-founder of hedge fund Alameda Research, testified that it was given secret privileges including a $65 billion line of credit, substantially larger than the amount other users were able to borrow.
Wang said Alameda had withdrawn $8 billion of assets from FTX by the time of its bankruptcy.
Earlier that day, an investor in FTX, Matt Huang, said he was told that Alameda did not receive any preferential treatment by FTX.
US prosecutors say 31-year-old Bankman-Fried stole billions of dollars in FTX customer deposits to plug losses at Alameda.
Bankman-Fried has pleaded not guilty.
De La Rue expects to “marginally” beat guidance
Friday 6 October 2023 08:01 , Daniel O'Boyle
De La Rue’s tentative road to recovery continued today as the troubled banknote printer said it now expects profits this year to be “marginally” ahead of guidance.
The business had expected to narrowly break even in the first half and make annual profits of just voer £20 million.
De La Rue, valued in the billions in the early 1990s, has seen its share price tumble as cash fell out of favour. But since appointing Clive Whiley as chair, the business has taken steps to recover and the share price has picked back up, doubling in value since June, even if that still leaves it down more than 95% from its peak 30 years ago. Today’s upgrade could propel the share higher.
Jobs figures keep US rates outlook in focus
Friday 6 October 2023 07:47 , Graeme Evans
This week’s lower-than-expected private sector job figures have given markets hope that September nonfarm payrolls (NFP) will surprise to the downside later today.
A softer print will help to ease some of this week’s jitters over the prospect of a further interest rate rise by the US Federal Reserve.
Wall Street is currently forecasting NFP growth of 170,000, with average hourly earnings unchanged on the previous month’s 4.3% year-on-year rise.
Julien Lafargue, chief market strategist at Barclays Private Bank, said: “Beyond the number of job creations, investors will pay close attention to wage growth figures and whether they confirm recent disinflationary trends.
“In the current context, and unless we see a very significant downside surprise, in our view it is unlikely the NFP release alone can turn around the narrative on “higher for longer” interest rates.
“For this to happen we would also need to see soft CPI numbers next week.”
FTSE 100 up ahead of US jobs figures, crude down 8% in a week
Friday 6 October 2023 07:17 , Graeme Evans
A potentially market-moving set of US jobs figures will today provide traders with an indication on the next move by Federal Reserve policymakers.
The non-farm payrolls report, which is the last before the next Fed meeting on 1 November, is expected to show growth of 170,000 in September compared with 187,000 the previous month. The unemployment rate is likely to edge down to 3.7%.
Markets are currently pricing a 38% chance of another rate hike this year, but that stance could change significantly if today’s figures are too far from the Wall Street consensus.
US markets struggled for direction yesterday, with the S&P 500 index finishing the session near its opening mark after a week in which bond yields have spiked on expectations that global interest rates will stay high for longer.
The FTSE 100 index closed up 0.5% yesterday and is forecast by CMC Markets to climb another 26 points to 7477 this morning.
Brent Crude stood at $83.95 a barrel this morning, having fallen by about 8% this week on a weaker demand outlook.
House prices slip further in September
Friday 6 October 2023 07:06 , Daniel O'Boyle
The average UK house price fell by 4.7% year-on-year, or 0.4% month-on-month, in September, according to the country’s largest mortgage lender Halifax.
That left the average house price at £278,601 as higher interest rates continue to slow down demand.
Halifax Mortgages director Kim Kinnaird said: “Activity levels continue to look subdued compared to recent years, with industry data showing lower levels of new instructions to sell homes and agreed sales. Borrowing costs are the primary factor, given the impact of higher interest rates on mortgage affordability.
“Against this backdrop, homeowners inevitably become more realistic about their target selling price, reflecting what has increasingly become a buyer’s market.”
Recap: Yesterday’s top stories
Thursday 5 October 2023 22:26 , Simon Hunt
Good morning. Here’s a summary of our top headlines from yesterday:
Investment in central London offices slumps by two thirds to “profoundly low” levels as interest rates and hybrid working take toll
The £7.5 billion cloud services market referred to CMA for full investigation over concerns about dominance by Amazon and Microsoft
More than 60% of UK CEOs predict a full return to in-office working by 2026 says KPMG survey
Imperial Brands reacts to Sunak speech as it launches £1.1 bn share buyback
Shake up at student accommodation provider Unite Group as CEO steps down and rents rise by average 7% amid chronic shortage of rooms
Losses narrow at London fintech Worldremit but it warns on uncertain future
