Yahoo Finance FTSE 100 Live: UK retail sales fall, FTX sues Sam Bankman-Fried to claw back $1 billion
Figures showing a retail sales surprise in June’s heatwave were today clouded by a big fall in consumer confidence for July.
GfK’s headline reading fell for the first time this year as the reality of price rises and higher interest rates is felt by households.
On the corporate front, mining giant Glencore has reported that output of copper, zinc and nickel all fell in the first half of 2023.
FTSE 100 Live Friday
Retail sales in upside surprise
Glencore reports lower metals volumes
London shares higher over the week
Wall Street opens higher as investors snap up big-name stocks
14:47 , Michael Hunter
Wall Streets S&P 500 was up in opening Friday trade, as investor moved back in for some of the markets biggest names after a mixed week for corporate earnings news.
Starbucks added over 2% and Alphabet, the parent of Google, rose by almost 1.5%,
The broad New York stock benchmark gained over 16 points to 4,551.06.
Inheritance tax receipts top £2 billion
14:23 , Simon Hunt
Inheritance tax receipts rose to their highest level on record in June adding further pressure on Rishi Sunak to scrap the tax altogether.
More than £2 billion was raised between April and June, according to data from HMRC, a rise of £200 million over the same three-month period in 2022.
In its Autumn Finance Bill last year, the government froze the £500,000 allowance on a deceased person’s estate, representing a significant real-terms cut in tax-free inheritance in light of soaring inflation and rising asset prices. But there has since been speculation that the Prime Minister is weighing scrapping the tax altogether in a bid to woo voters in marginal seats at the next General Election.
HMRC said the receipts rise could also be down to recent interest rate rises, prompting beneficiaries of estates to settle their tax obligations sooner than they would have done to escape a higher charge on overdue payments.
Nicholas Hyett, Investment Manager at Wealth Club said: “HMRC continues to see its inflows increase, month-after-month and year-after-year. But as house prices start to fall, we may see beneficiaries paying more inheritance tax than they really should."
FTSE flat at noon: lunchtime update
12:21 , Simon Hunt
Midway through the day’s trading session in London, the FTSE 100 index has stayed relatively flat, up just 9 points.
Here’a a look at your key market data:
City Comment
11:35 , Simon English
The banker was lip-wobbling into his beer. (It would have been Château
Lafite, but times are hard.)
“The market has taken a firm view,” he said. “It hates us.”
He wasn’t referring to bankers in general – that’s for the wider public – but to investors’ attitude to UK shares.
For ages solice has been taken from the notion that since London stocks are so obviously undervalued, the big boys would at some point realise what a great buying opportunity that represented and the values would correct.
Part of this idea was that it was mainly mean foreigners taking such a downbeat view on our prospects. Hah, they’d be sorry.
Once inflation calmed and interest rates started to go down, equities would surely be back in favour, and patriotic Brits who could see that coming would be the clear winners.
This wishful thinking takes a bash this morning with news that Legal & General, which at £1.3 trillion is the biggest manager of assets in the Square Mile, is selling shares and buying bonds.
Chief investment officer Sonja Laud tells the FT that L&G is prepping for a “significant” downturn in the UK economy, with recession inevitable while borrowing rates stay high.
L&G isn’t some cavalier trading house placing bets on what happened five minutes ago. It is one of the most thoughtful, and in an age of corporate tomfoolery, one of the most decent businesses around.
It is hard to imagine it getting into a public spat with Nigel Farage.
So its views and actions are a bit depressing. But awfully hard to dismiss.
The banker had another one.
Microsoft deal not over the line yet, CMA warns
11:31 , Simon Hunt
Microsoft’s battle to seal its blockbuster $69 billion Activision merger showed no signs of abating this morning after the UK competition watchdog said it still had objections to the deal.
Overnight, US regulators pushed the pause button on their court case over the acquisition of the Call of Duty maker. But speaking on the BBC Today programme earlier, Competition and Markets Authority chief Sarah Cardell said: “Our decision to prohibit the transaction still stands.
“We identified very serious concerns…and those concerns would need to be fully resolved.”
She added that a restructured proposal by Microsoft could gain approval.
Microsoft president Brad Smith has expressed fury at the CMA’s hostility to the deal, describing it as “the darkest day in our four decades in Britain.”
The merger has been cleared in a number of other jurisdictions including the EU and Japan.
Glencore shares lower, “buy” note boosts Hargreaves Lansdown
10:19 , Graeme Evans
Robust production figures by Glencore did little for its shares today as investors continue to fret over China’s faltering economic recovery.
The Swiss commodities giant said lower output of key assets in copper, zinc and coal was no worse than expected as it gears up for a recovery over the rest of 2023.
It also forecast annual earnings still well above the long-term average, even though its marketing arm has seen price volatility subside.
Glencore shares drifted 4.3p to 468.2p and are down by around 14% this year as the demand outlook is clouded by the disappointing pace of China’s economy.
Other miners including Rio Tinto also fell 1%, having benefited yesterday from a stronger-than-expected production update by Anglo American.
The mixed performance has come in a better week for London shares, with the FTSE 100 index up 3% thanks in part to sterling weakness after UK inflation’s downside surprise.
Today’s session saw the top flight add 8.74 points to 7654.79, led by a gain of 14p to 924p for Hargreaves Lansdown as US bank Jefferies gave the investment platform a “buy” recommendation and 1015p target price.
On the fallers board, Thursday’s poor session for US growth stocks meant the FanDuel sports betting business Flutter Entertainment dropped 1.5% or 220p to 15,200p.
Scottish Mortgage Investment Trust also weakened 6.4p to 690p after the value of its portfolio companies Netflix and Tesla slid in yesterday’s Wall Street session.
The FTSE 250 index fell 20.18 points to 19,291.55 but that’s still 4% higher over the week as investors welcomed signs that interest rates may not rise as far as feared.
One of the best performing mid-cap stocks has been Babcock International after the defence support services firm’s annual results showed strong turnaround progress.
With the company poised to resume dividend payments after a three-and-a-half-year gap, shares rose another 12.2p on top of yesterday’s 15% rise to stand at 373.8p.
Other FTSE 250 risers included bus and rail operator FirstGroup, which added 2p to 147.3p after telling its London AGM that trading had been in line with expectations.
City Voices
10:10 , Simon English
THE bosses of Coutts should hang their heads in shame. Oh, and they ought to be fired — certainly those responsible for closing Nigel Farage’s account and they way they’ve dealt with the predictable subsequent media storm.
This is an institution, don’t we know, yawn, yawn, that counts among its thousands of customers, members of the Royal Family and other dignitaries and celebrities, some exceedingly rich folk. It also counts among its customers some decidedly rum characters. How do I know? Because I’ve been with them when they’re proudly flashed their Coutts cards.
THG’s mission to become profitable steps up a gear
09:21 , Simon Hunt
Ailing e-commerce firm THG’s plans to chart a course to profitability went up a gear today as it disposed of two loss-making units.
The firm has sold its cycling division ProBikeKit to Mike Ashley’s Frasers, as well as its OnDemand division, which includes the gifting website I Want One Of Those, for a combined £4 million. Together, they made a £14.6 million EBITDA loss in 2022.
THG posted a near-£500 million operating loss for 2022, which it said was the result of efforts to keep prices low amid rocketing inflation, as founder Matt Moulding pledged to take “decisive action across the business with around £100 million of efficiency savings.”
THG shares fell 2.9% to 103p. The stock has fallen 87% since its 2021 IPO.
Moulding has a net worth of £356 million, according to the Evening Standard Tech Rich List.
Flutter 2% lower in flat FTSE 100 session, Babcock up another 4%
08:41 , Graeme Evans
A poor session for US growth stocks had an impact in London today as FanDuel sports betting business Flutter Entertainment dropped 2% or 310p to 15,110p.
Scottish Mortgage Investment Trust also weakened 6.4p to 690p after the value of portfolio companies Netflix and Tesla slid in yesterday’s Wall Street session.
The FTSE 100 index ended a strong week on a flat note, with London’s top flight 4.18 points lower at 7641.87. Other fallers included housebuilder Taylor Wimpey, which gave up some of its recent gains with a retreat of 1.35p to 115.35p.
Mining giant Glencore fell 3.55p to 468.95p after it said production of key assets in copper, zinc and coal declined in line with expectations.
The FTSE 250 index fell 36.32 points to 19,275.41 but is around 4% higher over this week. Defence services firm Babcock International rose another 4% or 14.6p to 376.2p, adding to the 15% rise seen after yesterday’s annual results.
Pound edges up against the dollar on retail sales performance
08:26 , Simon Hunt
The pound has edged up against the dollar this morning on the back of a month-on-month rise to retail sales.
Here’s a look at your key market data.
Commodities giant Glencore reports lower metals volumes including copper
07:46 , Michael Hunter
Production of some of the main metals that power the global economy fell at one of the biggest names in commodities trading and mining in the first half, in another sign of a slowdown in the world economy.
Glencore said that output of copper, zinc and nickel all fell in the first half of 2023. Copper production was down 4%. The FTSE 100 giant said the numbers were in line with its expectations and stood by its guidance for the full year, predicting higher output in the second half.
It called the performance in the first half as “solid”.
Big fall in consumer confidence — GfK survey
07:36 , Graeme Evans
Consumer confidence has shown a sharp decline in July, with GfK’s measure of household sentiment down six points to minus 30.
GfK client strategy director Joe Staton said “reality has started to bite” after a run of improvement in the headline score during 2023.
The impact of the cost of living crisis and pain of recent interest rate rises is seen in today’s seven point drop in GfK’s measure of major purchase intentions.
The view of the general economic situation over the next 12 months also deteriorated eight points to minus 33 and the index tracking future personal finances reversed six points.
Staton added: “The recent fall in headline inflation will do little to improve the financial mood; consumers need to see falling prices and interest rates before that happens.”
Tesla down 10% amid tech stocks slump, FTSE 100 seen flat
07:16 , Graeme Evans
Tesla and Netflix shares closed 10% and 8% lower respectively last night as US tech and growth stocks suffered one of their worst sessions of the year.
New York’s FANG+ index of mega cap stocks has soared in recent months but fell 4.5% last night after the sell-off for the electric car maker and streaming giant in the wake of their quarterly results on Wednesday evening.
The tech-focused Nasdaq gave up 2% and the S&P 500 index slipped 0.7%, whereas strong results from the likes of Goldman Sachs and Johnson & Johnson helped the Dow Jones Industrial Average to finish 0.5% higher.
In Asia, markets were mostly in the red this morning after figures earlier showed Japan’s inflation rate edged up to 3.3% compared with the 3.5% forecast.
The FTSE 100 index has performed well in the past two sessions but IG Index expects a slightly lower opening at 7640 today.
Reality check for inflation hopes as retail sales fall by less than expected in June
07:14 , Michael Hunter
Retail sales fell last month as rising interest rates bit into consumers’ budgets, but the rate of decline was less than forecast in a reality check for hopes stoked this week that inflation has started to plunge.
Official numbers for June showed a 1% year-on-year decline in retail sales. lower than the 1.5% forecast, but also down from the 2.3% seen for the previous month. Core retail sales, which exclude fuel and car sales, dropped 0.9%, lower than the 1.6% City experts predicted and a smaller drop than 1.9% in May.
The pattern came after official inflation data fell more than expected this week – with the consumer price index for June down to 7.9%, the first bigger-than-expected decline since the Bank of England started raising interest rates in December 2021.
FTX sues Sam Bankman-Fried
07:00 , Simon Hunt
Bankrupt crypto company FTX has launched a fresh lawsuit against its former boss Sam Bankman-Fried in a bid to recoup hundreds of millions of dollars.
The lawsuit alleges that Bankman-Fried, along with a number of other senior members of FTX, participated in fraudulent transactions for their own personal benefit rather than the benefit of the company.
“Defendants abused their control over the FTX Group to commit one of the largest financial frauds in history,” the lawsuit alleges.
“Defendants misappropriated Debtor funds on a continuous basis to finance luxury condominiums, political and “charitable” contributions, speculative investments and other pet projects that inured to the benefit of Defendants rather than the Debtor entities that paid for them.”
Recap: Yesterday’s top stories
06:52 , Simon Hunt
Good morning from the City desk of the Evening Standard.
Here’s a summary of our top stories from yesterday:
There were signs inflation is set to continue to cool further as Asda cut prices on a range of products and Bisto maker Premier Foods said it would not raise prices for the rest of the year.
Nigel Farage vowed to fight on as the boss of Natwest apologised for the decision to close his Coutts bank account.
A £465 million takeover of car dealership Lookers has collapsed after shareholder Cinch opposed the deal, causing its shares to tank.
M&S’ plans to redevelop its flagship store on Oxford Street have been blocked.
