Yahoo Finance FTSE 100 Live: ‘Stories of expected house price crash way off the mark’; EU inflation down; shares climb
A robust session means the FTSE 100 index is on course to post a slender gain across the first half of the year.
The 2023 rise of 1% is in contrast with Wall Street, with the Nasdaq Composite up 30% and the S&P 500 index 15% higher.
Today’s final session of the quarter has been boosted by yesterday’s upward revision to US GDP, meaning Brent Crude is poised for its first monthly increase this year.
FTSE 100 Live Friday
Average house prices held firm in June
FTSE 100 marginally higher at 2023 midpoint
Heathrow appoints new chief executive
Afternoon market snapshot
Friday 30 June 2023 14:34 , Daniel O'Boyle
Take a look at our afternoon market snapshot
FTSE 100 gets closer to perfectly flat half-year
Friday 30 June 2023 14:31 , Daniel O'Boyle
The FTSE 100 is now justr 13.7 points below where it started the year as it reaches its halfway point, after climbing further this afternoon.
Ocado has been the day’s biggest riser, after a volatile six months for the delivery firm. It’s still down for the half-year, but continued takeover rumours have kept it from being among the index’s biggest losers over the last six months.
For the year, Rolls Royce has been the biggest riser, followed by 31 and Flutter.
Miners Fresnillo, Glencore and Anglo American make up the bottom three spots for the year.
Financial Conduct Authority enables firms to provide mortgage breathing space
Friday 30 June 2023 14:05 , Daniel O'Boyle
The City regulator says it has moved quickly to make rulebook changes, to help give households some relief from rising mortgage rates.
The Financial Conduct Authority (FCA) said lenders should make the options available to borrowers clear and accessible.
Sheldon Mills, executive director for consumers and competition at the FCA, urged homeowners who are struggling with their mortgage, or believe they might have difficulties, to speak to their lender.
Pokémon Go maker Niantic lays off 230 staff while cancelling Marvel and NBA games
Friday 30 June 2023 13:26 , Daniel O'Boyle
Niantic, the developer behind Pokémon Go, has announced that it is laying off 230 employees and axing two games as it grapples with a turbulent gaming market.
The cancelled titles include Marvel: World of Heroes, which was being previewed in select countries ahead of its official launch, and the recently released NBA All-World.
In an email to staff published on the firm’s website, Niantic boss John Hanke essentially described the layoffs as the results of a Covid hangover.
ICYMI: Secret email from Severn Trent boss to rivals
Friday 30 June 2023 13:12 , Daniel O'Boyle
Liv Garfield, the boss of FTSE 100 water giant Severn Trent, is trying to bring a taskforce of utility bosses together with the Labour party in a bid to head off the threat of nationalisation.
In an email sent to other utility CEOs which she describes as “sensitive” and “highly confidential”, the £4 million a year Garfield asks them to join an “off-the-record roundtable” with Will Hutton, the Observer journalist best known for books critical of capitalism including The State We’re In.
Her move comes as water companies face the threat of being re-nationalised, decades after they were privatised as one of Margaret Thatcher’s free market reforms.
Thames Water’s annual profit figures may come out after MPs grill industry executives
Friday 30 June 2023 13:10 , Daniel O'Boyle
There were fears in the City today that Thames Water will publish its annual accounts later than usual, as concern grew over the state of the heavily indebted group’s finances.
The 15-millon customer utility is grappling with a £14 billion debt burden as interest rates soar, stoking concern about its viability. Its £1.6 million-a-year CEO, Sarah Bentley, left suddenly this week.
Thames usually publishes its financial report in the first week of July. Sources close to the company said today its next set of accounts will come out before July 15, the deadline for them to be released.
The Government said AI firm Cervest could ‘transform lives’ — It was weeks from collapse
Friday 30 June 2023 13:04 , Daniel O'Boyle
Cervest, a London ‘climate intelligence’ firm hailed by the Government as one of the UK’s 10 most “exciting” AI firms just three months ago has gone bust with staff left unpaid, the Standard can reveal.
All of Cervest’s more than 100 staff have lost their jobs. Its 71 UK employees haven’t been paid since April.
The collapse of a supposed AI champion is the latest dent in a London tech sector struggling with layoffs, falling valuations and dwindling investment. In particular, it’s a blow to Rishi Sunak’s vision of making London a world-leading artificial intelligence hub, laid out at London Tech Week just days before Cervest entered administration.
It is maybe the biggest downfall so far in the UK AI sector, which had appeared to be the one area of tech in the country that was immune to the slowdown in funding as investors threw money behind artificial intelligence firms in the wake of ChatGPT’s popularity.
Legoland owner bounces back to profit amid tourism and staycation boom
Friday 30 June 2023 13:01 , Daniel O'Boyle
The return of tourists and families enjoying staycations has propelled sales and earnings for the owner of Legoland and Thorpe Park.
Merlin Entertainments, which is one of the world’s biggest operators with more than 140 attractions, theme parks and resorts, said it had millions more visitors last year.
The multinational group saw its revenues surge by 60% to £2 billion over 2022, compared to 2021, and surpass pre-pandemic levels.
Competition watchdog concerned over £16bn Adobe takeover
Friday 30 June 2023 12:53 , Daniel O'Boyle
The Competition and Markets Authority might move to block Adobe’s 20 billion dollar (£15.8 billion) takeover of Figma, a tool used to design digital apps and websites, after it found that it could be bad for competition in the UK.
The regulator said on Friday that the deal might mean “less choice for designers”, as the two businesses stop competing with each other.
“We’re worried this deal could stifle innovation and lead to higher costs for companies that rely on Figma and Adobe’s digital tools – as they cease to compete to provide customers with new and better products,” said Sorcha O’Carroll, senior mergers director at the CMA.
Wimbledon serves up £200m boost to London
Friday 30 June 2023 12:16 , Daniel O'Boyle
Wimbledon fortnight delivers a £200 million boost to the London economy, making the tennis championship the most valuable annual sporting event in Britain, according to a new study.
The thousands of spectators, players, officials, event staff and media representatives who will descend on All England Lawn Tennis Club from Monday will inject millions of pounds a day into the local economy through spending on accommodation, food and drink, transport and merchandise over the two weeks.
Researchers at the sports industry research centre at Sheffield Hallam University found that the tournament’s total economic impact on London last year was £198.9 million, and it supported economic activity worth £222.4 million across the capital. The equivalent figures for Britain as a whole were £319.1 million and £367.9 million respectively.
City comment: Water boss Garfield’s email to rivals is more collusion than good deed
Friday 30 June 2023 11:54 , Daniel O'Boyle
Liv Garfield means well.
Her email to other utility bosses, reported here today, suggests a sincere attempt to make the failing utility sector work better for everyone.
She may have spread her net a little too widely from a distribution point of view, otherwise her pleas for the work not to be forwarded wouldn’t have reached us.
City voices: Bank of England isn’t giving us the facts we need to question big business
Friday 30 June 2023 11:51 , Daniel O'Boyle
Every now and again, the Bank of England Governor invites journalists in for lunch. The last one I went to, we sat in the “Governor’s Dining Room”, a wood-panelled chamber in the heart of the vast building. There was a clock ticking, as we picked away at our English asparagus and salmon, just the two of us.
It took my mind back to sitting in my tutor’s study at university, at the top of an ancient college staircase. In the presence of a great mind, and for an hour or so, the rest of the world shut out, just the two of us.
Market snapshot as shares climb higher
Friday 30 June 2023 11:45 , Daniel O'Boyle
Shares have continued to climb today and the FTSe 100 is back above the 7500 mark.
Take a look at our full market snapshot.
Eurozone inflation at 5.5%
Friday 30 June 2023 11:08 , Daniel O'Boyle
Inflation in the Eurozone fell to 5.5% in June, as the UK’s pace of price rises continue to look more like an outlier among rich countries.
The consumer price index fell from 6.1%. The UK’s June inflation figures won’t be published for weeks, but appear unlikely to fall far below May’s 8.7% figure.
Core inflation in the currency union, however, picked back up to 5.4%.
The figures are close to expectations and unlikely to lead to a major change in the policy of Christine Lagarde’s European Central Bank. Lagrade has suggested further interest rate hikes are on the way to bring inflation down to the 2% target.
Travel money sales top pre-pandemic levels
Friday 30 June 2023 11:02 , Daniel O'Boyle
Travel money sales this month exceeded pre-pandemic levels for the first time, according to new data from Eurochange.
Sales were up 20% from last June and were ahead of June 2019, showing that international travel is finally back after years of restrictions hit holiday plans.
The Saudi Riyal and Japanese Yen helped drive the rebound, with sales rocketing by more than 1800% and 700%, respectively. The top five currencies - the Euro, US Dollar, Turkish Lira, Canadian Dollar and UAE Dirham - remained the same, though.
Eurochange MD Charles Stewart said: “The fact that we’ve surpassed our pre-pandemic sales levels highlights the resilience of UK travellers and their appetite for overseas travel.
Pendragon chair to quit as dealership faces activist pressure
Friday 30 June 2023 10:31 , Daniel O'Boyle
The chair of the UK’s second-biggest car dealership Pendragon, Ian Filby, today announced plans to quit as the firm faces pressure from an activist shareholder.
Filby spent two years leading the board of Pendragon, which owns CarStore, Evans Halshaw and Stratstone. He will leave “to pursue other interests”. He got £175,000 in fees last year for attending 20 meetings.
Filby said: “I would like to take this opportunity to thank my fellow board members, the leadership team and, most importantly, our associates for their commitment to the company and passion for their work.
“I am proud of the progress that has been made both strategically and financially by the leadership team.”
Investment fund Palliser, which owns 4% of the dealership, called for a seat on Pendragon’s board in March.
FTSE 100 higher at 2023 mid point, Aston Martin shares up 4%
Friday 30 June 2023 10:21 , Graeme Evans
The FTSE 100 index is 42.38 points higher at 7514.07 in the final session of the half year, marginally better than 7452 at the end of 2022.
In contrast, leading indices in Frankfurt and Paris stand more than 10% higher and the Nasdaq Composite up 30% as the potential of AI boosts leading tech stocks.
The S&P 500 index is also 15% higher, a recovery from 2022 weakness that has been driven by a handful of mega caps such as Meta Platforms.
Second-half progress will depend on whether the US economy dodges recession and how much further the Federal Reserve and other central banks go on borrowing costs.
AJ Bell investment director Russ Mould said: “The prospect of higher interest rates for longer does not create the easiest environment for consumers and businesses.
“Expect further corporate cost-saving measures which could lead to job cuts and reduced consumer confidence, yet that could also benefit profit margins.”
Signs of resilience in the US economy following a big upgrade to first quarter GDP set the tone for today’s stronger session in European markets.
Brent Crude also rose 1% to $75.23 a barrel as the oil benchmark completed its first monthly gain of 2023 ahead of July supply cuts by Saudi Arabia.
BP shares lifted 4.45p to 459.25p while the stronger risk appetite boosted banks and builders as NatWest cheered 3.5p at 238.8p and Persimmon added 11p to 1029p.
JD Sports Fashion, which generates 30% of its earnings from North America, improved 0.7p to 144.6p after the read-across from Nike results failed to unnerve investors.
Shares in the US sportswear giant slid 4% after Wall Street’s closing bell, with a big jump in fourth quarter revenues clouded by the margin performance and first quarter guidance.
The FTSE 250 index, which has fallen by 3% this year, today rose 67.63 points to 18,338.36 with Aston Martin Lagonda out front with a rise of 4% or 13.8p to 357.2p.
Revolution Beauty strikes back again in Boohoo spat
Friday 30 June 2023 09:48 , Daniel O'Boyle
Revolution Beauty and its top shareholder Boohoo continued their spat today, with the makeup retailer today defending its decision to bring back directors that had just been voted out.
In a coup led by Boohoo, shareholders last week voted to remove all members of Revolution’s board except Jeremy Schwartz, only for Schwartz to reappoint the three directors that had just been rejected.
Boohoo called the move “self-serving”, but today Revolution - which had its shares suspended last year as auditors wouldn’t sign off on its accounts - said it was “the only reason that the company’s shares were re-admitted to trading.”
Trading resumed on Wednesday. Shares are up 64% since the suspension to 31.2p, including a gain of 3.7p today.
Today’s market snapshot
Friday 30 June 2023 09:07 , Daniel O'Boyle
Take a look at all the key market data
Mortgage rates keep rising, but could house prices be bulletproof?
Friday 30 June 2023 09:00 , Daniel O'Boyle
Mortgage rates continued to march upward, with 6% five-year rates by next week now appearing a near-certainty.
The average two-year fixed-rate deal rose to 6.39% from yesterday’s 6.37%. The average five-year rate was up to 5.96%, compared to 5.94% yesterday.
But after today’s Nationwide house price data, brokers are confident the rising rates will not lead to a house price crash.
Paul Welch, CEO at London-based LargeMortgageLoans.com: "The Nationwide believes a relatively soft landing is still possible, and I agree that the pain in the property and mortgage markets will be relatively short-lived, six to nine months perhaps, so it's a case of just trying to get through this turbulent phase. Though the base rate is now expected to peak higher than just a few months ago, stories of expected house price crashes are way off the mark. A house price correction after many years of cheap borrowing is more likely. If your home becomes unaffordable in the short term, then speak to an adviser about your options and work out a plan to keep hold of your home. Most lenders and advisers want to step up and support you by offering help such as mortgage payment holidays or extending your mortgage term. Don't suffer quietly, ask for help."
Banks in demand as FTSE 100 rallies, Drax 4% higher
Friday 30 June 2023 08:29 , Graeme Evans
Investors targeted heavily-sold stocks in the banking and housebuilding sectors today as the FTSE 100 index rose 23.16 points to 7494.85.
Blue-chip risers included NatWest with a gain of 2.2p to 237.5p and Persimmon following an improvement of 13p to 1031p.
JD Sports Fashion dropped 1.95p to 141.95p on the back of last night’s earnings miss by Nike, while the poor week for Rolls-Royce shares continued with a fall of 2.25p to 146.45p.
The pressure on the valuations of listed water companies also continued as Severn Trent and United Utilities lost just under 1%.
The FTSE 250 index rose 44.83 points to 18,315.56, led by Drax as shares in the biomass power business lifted 4% or 21.8p to 583.4p.
New boss to land at Heathrow
Friday 30 June 2023 08:24 , Daniel O'Boyle
Heathrow airport has selected Thomas Woldbye, who currently leads Copenhagen Airport, as its new boss.
He replaces John Holland-Kaye, who surprisingly annoucned plans to quit in February.
Heathrow Chairman Lord Paul Deighton said: “After an extensive and rigorous review of candidates, the Heathrow Board is delighted to appoint Thomas Woldbye as the next Heathrow CEO.
“Leading Britain’s hub airport is one of the most important jobs in global aviation and the vacancy attracted the best calibre talent from across the world. Thomas’s achievements at Copenhagen not only mirror Heathrow’s long-term strategy, but his track record in successfully running a major airport and working closely with stakeholders to secure consensus and deliver positive results stood out in the selection process.”
Woldbye said: “I am naturally excited and proud, as well as humbled, to have been chosen to lead what is arguably the most famous airport in the world on its future journey.
“I have personally experienced how the excellent team at Heathrow has successfully improved both the infrastructure and the service to passengers over the past years to create a strong platform for further success. Heathrow is an important engine for the British economy and inextricably linked to the success of London and the wider UK. I look forward to being part of charting the path for this iconic company. My ambition will be to make the airport even better for passengers, for airlines, the community and every part of the UK.”
Like Heathrow, Copenhagen Airport has dealt with strikes this year. Norwegian Airlines threatened to pull out of Denmark’s biggest air travel hub last month as industrial action led to cancellations.
Secret email from water boss to rivals
Friday 30 June 2023 08:14 , Simon English
LIV Garfield, the boss of FTSE 100 water giant Severn Trent, is trying to bring a taskforce of utility bosses together with the Labour party in a bid to head off the threat of nationalisation.
In an email sent to other utility CEOs which she describes as “sensitive” and “highly confidential”, the £4 million a year Garfield asks them to join an “off-the-record roundtable” with Will Hutton, the Observer journalist best known for books critical of capitalism including The State We’re In.
Her move comes as water companies face the threat of being re-nationalised, decades after they were privatised as one of Margaret Thatcher’s free market reforms.
She writes: “Whilst it is clear Labour will not include nationalisation in its next manifesto, they are also not keen on entering into the election race championing the status quo. The leadership thinks there is room for improvement and, politically, there is significant pressure to ‘do something’ about utilities.”
Brent Crude set for first monthly rise of 2023
Friday 30 June 2023 07:56 , Graeme Evans
Brent Crude is broadly unchanged at $74.42 a barrel, meaning it is on course to rise more than 2% in June for its first monthly gain in 2023.
The increase come ahead of supply cuts by Saudi Arabia, which plans to reduce its output by one million barrels per day from 1 July.
The Saudi move has offset ongoing demand fears caused by the impact of central bank rate hikes, as well as still resilient Russian supply.
UBS Global Wealth Management continues to forecast Brent crude at $95 a barrel by the end of the year.
It said today: “While demand growth in OECD countries has been lacklustre in the first half, this has been more than offset by solid demand growth in China, India, and the Middle East.
“In fact, data shows oil consumption has only contracted a few times over the past five decades, and typically only in periods of extreme economic stress.”
Nike shares fall after earnings miss
Friday 30 June 2023 07:33 , Graeme Evans
NIke shares fell 4% in after-hours dealings last night after the sportswear giant’s fourth quarter earnings failed to meet Wall Street estimates.
That was despite revenues of $12.8 billion (£10.1 billion) for the three months to 31 May being 5% higher and better than the $12.6 billion forecast by analysts.
The gross margin for the fourth quarter decreased 140 basis points to 43.6% and the earnings per share figure of $0.66 came in just short of the predicted level.
Despite that disappointment, the company hailed a milestone year in which its full year reported revenues of $51.2 billion (£40.6 billion) were 16% higher when stripping out currency movements.
Chief financial officer Matthew Friend said: “We finished the year with mid-teens currency-neutral revenue growth and a healthy marketplace — setting the foundation for sustainable, profitable growth in FY24 and beyond.”
GDP figure adds to Wall Street H1 cheer, FTSE 100 seen higher
Friday 30 June 2023 07:19 , Graeme Evans
US markets posted a largely positive session after a big upward revision to America's first quarter GDP print pointed to resilience at a time of rising interest rates.
The 2% annualised pace compared with a previous estimate of 1.3% and helped the Dow Jones Industrial Average to rise 0.8% and the S&P 500 by 0.45%.
The tech-focused Nasdaq Composite was flat as the robust GDP figure fuelled expectations that central banks will have to hold interest rates at restrictive levels for much longer than previously expected.
The Nasdaq is still up 30% so far this year, compared with a rise of 14.5% for the S&P 500 index.
Deutsche Bank strategist Jim Reid said: “The first half has mostly been a risk rebound from stressed levels in 2022 so the performance should be put in some perspective, but with AI giving things an added kicker.”
He adds that the performance for the rest of the year will depend on whether the US economy enters recession.
Reid added: “We still think it does in Q4 with risks that it gets delayed to Q1 rather than doesn’t happen. There’s a long, long way before you can be sure you’re out of the gravitational pull of the lag of aggressively tighter monetary policy over the last year or so.”
The FTSE 100 index is up by a more modest 1% this year, with CMC Markets expecting the final session of the half year will see London’s top flight opening 18 points higher at 7489.
Nationwide: Large-scale property sell-off is ‘uinlikely’
Friday 30 June 2023 07:16 , Daniel O'Boyle
Nationwide’s chief economist, Robert Gardner, discussed the impact of recent and upcoming interest rate hikes on house prices. He said that he did not believe it would cause a major wave of selling that could cause house prices to plummet.
“Clearly this represents a significant increase, but those borrowers were stress tested at interest rates above those now prevailing in the market to ensure they could cope with such an increase,” Gardner said. “Moreover, incomes have been rising at a solid pace in recent years,” he said. “Lenders will also work with borrowers to provide assistance wherever possible.
“Therefore, providing the labour market and interest rates perform broadly as expected, we are unlikely to see the waves of forced selling which would probably be required to result in a more disorderly adjustment to the housing market. “
Nationwide: house prices hold firm despite mortgage chaos
Friday 30 June 2023 07:11 , Daniel O'Boyle
Avergae house prices ticked up in June compared to May, but were down again year-on-year, according to Nationwide.
The average house price was £262,239, up from May’s £260,736.
That comes despite chaos in the mortgage market during the month, as interest rates soared. Two-year fixed-rate deals leapt from 5.49% at the start of the month to 6.37% yesterday, while five-year fixes were up from 5.17% to 5.94%.
London had the second-sharpest year-on-year decline, at 4.3%, but average prices were still well above the rest of the UK.
Matt Thompson, head of sales at Chestertons, said: “Despite interest rates going up, London’s property market remains buoyant. We are seeing more cash buyers but also meet house hunters who rather buy now before facing another potential rate hike.
“We have seen a clear uplift in buyer demand over the past months and, in June alone, conducted 20% more viewings than in June of last year. The capital’s high rents are another contributing factor to London’s continuous buyer interest. As more and more tenants are facing rent increases, many are reviewing their situation and conclude that, despite higher interest rates, buying still presents a financially attractive option.”
