FTSE 100 up 46 points
BT and Sky shares rally on Premier League deal
TUI AG slides on profit-taking
US inflation and retail sales data miss forecasts
Despite wilting a little at the death the blue-chip index finished the day comfortably in positive territory.
The FTSE 100 closed at 7,214, up 46 points, with precious metals miners prominent among the best performers.
3.45pm: US crude inventories rise less than expected
US crude inventories rose by 1.8 million barrels to 422.1 million last week, according to the Energy Information Administration.
However, it was not as much as the rise of 2.8 million barrels that analysts had been expecting.
The data comes a day after the American Petroleum Institute revealed US crude inventories rose by 3.9 million barrels, higher than expected and fuelling concerns about a global supply glut.
West Texas Intermediate crude is down 0.16% to US$59.09 per barrel while Brent crude is broadly flat at US$62.71 per barrel.
3.30pm: Tesco 'sorry' for payments glitch
The issue had caused some shoppers to go over their spending limits.
“As soon as we identified this issue, we contacted as many affected customers as possible and have now processed all incomplete transactions,” a spokesperson said.
“The issue has now been resolved and we are sorry for any inconvenience this may have caused.”
3.00pm: US business inventories rise more than expected
US business inventories grew 0.4% in December, beating forecasts for a 0.3% rise, the Commerce Department revealed.
Sales increased 0.6% while the ratio of inventories to sales held steady at 1.33.
Meanwhile, US stocks have recovered slightly after a weak start with the Dow up 2 points, the Nasdaq up 34 points and the S&P up 3 points.
2.30pm: US stocks open lower
US stocks opened in the red as traders weighed an unexpected drop in retail sales and a flat inflation reading.
The Dow Jones Industrial Average fell 78 points to 24,553, the S&P 500 dropped 8 points to 2,654 and the Nasdaq shed 14 points to 6,998.
US inflation held at 2.1% in January, surprising analysts who had expected it to ease back to 1.9%. Retail sales declined 0.3% month-on-month in January against expectations for a 0.2% rise.
Molson Coors Brewing Co (NYSE:TAP) gained as it reported fourth quarter earnings that beat expectations.
On this side of the pond, the FTSE 100 has recovered to rise 37 poitns to 7,205 after a brief dip following the US inflation figures.
2.15pm: ING sees US inflation at 3% by summer
US inflation is likely to remain stubbornly high for some time as strong consumer demand prompts corporations to lift prices, according to ING Research.
ING expects core inflation to move back above the Federal Reserve’s 2% target in March and headline inflation to reach 3% by the summer.
“ In turn, this healthy growth, rising inflation environment means that we consider there to be upside risk for our call of three Fed rate hikes in 2018,” said James Knightley, chief international economist at ING.
As for the tip in retail sales in January, ING sees this as temporary.
“With tax cuts, record low unemployment, rising wages and high confidence levels suggesting the outlook for spending remains good,” Knightley said.
1.50pm: Two rate hikes expected this year after US CPI
The Federal Reserve may need to tighten monetary policy more quickly and aggressively than forecasts after inflation came in above expectations, according to Dennis de Jong, managing director at UFX.com
"Gauging the mood from traders, at least two more rate hikes are now expected this year, with some anticipation of a third climb arriving before the end of 2018. March and May have been favoured as the likely dates for Powell to make his first move," he said.
“Renewed selling pressure could be the ensuing result, but Powell’s plans will surely err on the side of caution to promote a gradual increase in interest rates.”
1.40pm: US retail sales miss expectations
US retail sales unexpectedly fell in January, reflecting declines in purchases of motor vehicles and building materials.
The Commerce Department said retail sales edged down 0.3% month-on-month in January, the biggest drop since February 2017. December was revised down to a flat reading from a previously reported 0.4% increase.
Those retail sales were poor, and December revised down.— Michael Hewson ???????? (@mhewson_CMC) 14 February 2018
Inflation higher than expected.
Spending squeeze on US consumers? #USD
Economists were predicting a 0.2% rise in January.
1.30pm: US inflation holds steady
US consumer price inflation held at an annual rate of 2.1% in January, missing expectations of 1.9%, the Labor Department revealed.
Core inflation, which strips out volatile items such as food and energy, also remained unchanged at 1.8%. Economists had estimated core inflation of 1.7%.
Compared to the previous month, headline inflation rose 0.5% and core inflation increased 0.3% against forecasts of 0.3% and 0.2% respectively.
1.00pm: US stock futures higher ahead of inflation data
Ahead of the US inflation data later, US futures are pointing to a stronger open.
Dow Jones Industrial Average futures rose 39 points to 24,640, S&P 500 futures increased 6 points to 2,662 and Nasdaq futures added 31 points to 7,013.
“Given the volatility that we’ve seen over the last week or so, which was initially attributed to higher interest rate expectations following the January jobs report, traders will be closely monitoring the US inflation and retail sales releases today,” said Oanda’s Craig Erlam.
“Both numbers will be released shortly before the open on Wall Street and could be the trigger for further volatility, especially if the CPI exceeds expectations. “
While the core personal consumption expenditure index is the Federal Reserve’s preferred measure of inflation, the consumer price inflation figures are seen as being indicative of inflationary trends, Erlam added.
This means markets can be sensitive to the release, he said.
12.00pm: FTSE 100 jumps in lunchtime trading
The pound was weaker, falling 0.31% versus the dollar at US$1.3851 and 0.24% against the euro at €1.1219.
Sky and BT shares jumped after saying they have secured the broadcast rights for Premier League football games for less than they paid in the last bid.
Coca-Cola HBC shares rose as it lifted its full year dividend by 23% after delivering earnings growth on the back of strong demand for the Monster Energy drinks and water.
Shares in sector peer, Standard Life Aberdeen PLC (LON), fell.
Galliford Try PLC (LON:GFRD) shares plunged after the construction company reported a drop in first half profits and said it would raise £150mln from investors in coming weeks as it took a hit following the collapse of Carillion PLC (LON:CLLN).
Looking ahead to the afternoon session, the attention turns to US inflation data, which is expected to reveal an annual rate of 1.9% for January, easing back from the 2.1% reported in December.
US retail sales figures and the official weekly crude data from the Energy Information Administration will also be in focus.
11.30am: Used car sales fall in December, SMMT reveals
Used car sales fell 5.1% in the fourth quarter, reflecting a decline in petrol vehicles, according to trade data.
The Society of Motor Manufacturers & Traders (SMMT) said used car sales came in at 1.7 million for the quarter, down from 1.8 million a year ago. For the year overall, sales dipped 1.1% to more than 8.1 million from a record 8.2 million the previous year.
The SMMT said growth in 2017 was driven by demand for petrol-electric hybrid cars, up 22.2% to 73,864, and zero emission electric vehicles, which rose 77.1%.
Despite a 4.3% decline, petrol retained its position as the most popular fuel type with a 58.0% market share. Used diesel car transactions rose 3.3%, with more than 3.3 million motorists investing in one.
“These figures suggest that a lack of consumer confidence and widespread confusion has rippled out and damaged the market as a whole,” said Simon Benson, director of motoring services at used car website AA Cars.
“In spite of these figures, this doesn’t seem to have driven buyers away from the market entirely - indeed, some fuel types have seen a notable uplift in demand.
Alex Buttle, director of car buying comparison website Motorway.co.uk, said despite the drop in sales, the past year has been a “roaring success” for the industry.
“The used car market has remained buoyant at the expense of the new car sector, which is facing challenging times,” Buttle said.
“Second-hand car sales have boomed in the shadow of the faltering new car market, as price-conscious consumers are clearly eschewing old over new.”
Earlier this month, the SMMT reported a 6.3% fall in new car sales in January to 163,615 units.
11.00am: Eurozone economic growth should accelerate in 2018, says economist
This year’s Eurozone economy was helped by strong tailwinds but the question is how long GDP growth rates can be maintained, said Bert Colijn, senior economist at ING Research.
“Even though the ECB has reduced asset purchases, the euro has appreciated against the dollar and politics remains a factor of uncertainty, leading indicators are still pointing to a very strong start to the year,” Colijn said.
Jacob Deppe, head of trading at online trading platform, thinks economic growth “in theory” should gain momentum into 2018.
That will hopefully mean inflation finally picks up alongside improved job creation, the two things that are currently holding the Eurozone back.
“But some may also question how long monetary policy divergence between the US Federal Reserve and European Central Bank (ECB) can be sustained,” he said.
“There has been no indication from the ECB that it has any intention of changing monetary policy at all this year, and unless stronger economic growth feeds in to higher inflation, that is likely to remain the case.”
10.20am: Eurozone industrial production and GDP data
Eurozone industrial production rose more than expected in December, driven by an increase in the output of durable goods and intermediate goods, Eurostat said.
Industrial production grew 0.4% month-on-month and 5.2% year-on-year. Economists had predicted a 0.2% monthly rise and a 4.2% annual increase.
Eurostat also confirmed its earlier estimate of gross domestic product growth for the final quarter 2017 at 0.6% quarter-on-quarter and 2.7% year-on-year, as expected.
For 2017, GDP rose 2.5%, the fastest rate of growth since a 3% rise in 2007.
10.00am: UK needs to address weak productivity, says IMF
The International Monetary Fund said Britain’s structural reforms should focus on improving productivity and competitiveness as economic growth has moderated since the beginning of 2017.
The IMF said since the financial crisis, output growth has been underpinned by strong increases in employment but productivity growth has been “very weak”.
“With the UK unemployment rate at a 42-year low and the annual net inflow of workers from the EU already declining, the scope for future employment gains is more limited,” it said.
“With the UK unemployment rate at a 42-year low and the annual net inflow of workers from the EU already declining, the scope for future employment gains is more limited. “
The IMF added that the slowdown in economic growth is due to weak domestic demand as consumers come under pressure from rising inflation.
“The sharp depreciation of sterling following the referendum has raised consumer price inflation, squeezing household real income and consumption. Business investment has been constrained,” IMF said.
“In the medium term, growth is projected to remain at around 1.5% under the baseline assumption of continued progress in Brexit negotiations that lead to an understanding on a broad free trade agreement and on the transition process.”
9.15am: BT and Sky shares jump on Premier League rights deal
Shares in BT and Sky are higher this morning after saying they have agreed to pay £4.464bn to broadcast Premier League football games for three seasons from 2019-20.
"Sky is the clear winner, seeing its average cost per game falling 16% from £11.1m to £9.3m and picking up a further two games per season from 2019-22 to take its total to 128," said Henry Croft, research analyst at Accendo Markets.
"BT, on the other hand, has won just one package for early kick-off games, and although this marks an 8% saving on its previous bid for the same slot, it will see costs rise to £9.2m per match from £7.6m previously."
Croft also noted that the unwillingness to bid aggressively for the rights comes just weeks after the companies announced a deal to cross-sell each other's content, breaking a four-year rivalry.
"Evidently, Sky no longer feels the need to offer big money to beat its telecom incumbent rival, because said rival appears content retaining a much smaller number of games exclusively while customers have access to the full range of games available thanks to the cross-selling agreement," he said.
"With BT stepping back from their bold expansion into Premier League screenings, it also brings into question whether the 70% price increase for PL rights over the past four years has finally reached a peak."
8.40am: FTSE opens higher
The FTSE 100 got off to a sprightly start with a 43 point advance to 7,211.14 – although there is still some twitchiness ahead of US inflation data later that could shape the future trajectory of American interest rates.
The leading riser of the blue-chip index was Sky (LON:SKY), which rose 3.2% after it repelled the threat from online TV to its dominance of the Premier League football schedule.
The Russian miner and steelmaker Evraz (LON:EVR) continued its re-rating, which has seen the stock advance 9.3% this week so far. In early trade it was bid up 1.7%.
A bout of profit-taking after Tuesday’s figures left tour operator TUI (LON:TUI) 2% lower.
Moving down a division to the FTSE 250, Galiford Try (LON:GFRD) shares crumpled 14% after it announced plans to raise £150mln of fresh cash after being caught in the fall-out from the collapse of Carillion (LON:CLLN).
Proactive news headlines:
Union Jack Oil PLC (LON:UJO) highlighted “high impact” drilling planned for the Biscathorpe and Holmwood projects as the onshore British oiler updated investors on upcoming work programmes anticipated for 2018. It also expects a new planning application to be made for the stalled Wressle oil field development project. The new documents are due to be submitted to the authorities in April, UJO noted.
Hurricane Energy PLC (LON:HUR) has confirmed that another box has been ticked off its field development checklist, with the successful completion of buoy 'dry' trial fit testing at dry dock in Dubai. The Aoka Mizu FPSO (floating production storage and offloading) vessel is being upgraded at Dubai Drydocks World ahead of its deployment as the key piece of equipment in the planned Lancaster field early production system.
Sirius Minerals PLC (LON:SXX) has awarded the contract for drilling the shafts at its polyhalite project in Yorkshire to Polish firm DMC after ending discussions with Scarborough-based AMC UK. AMC UK had received a ‘notice of award’ in July last year for the contract, with expectations for a finalised agreement to be signed soon after.
Midatech Pharma PLC (LON:MTPH, NASDAQ:MTP) said trading last year was in line with forecasts with the focus in 2018 turning to three key clinical trials. A first in-human study of Q-Octreotide, for the treatment of carcinoid cancer and the hormonal disorder acromegaly, is expected to complete late this year or early next.
BB Healthcare Trust PLC (LON:BBH) comfortably outperformed its benchmark during what it described as a volatile year for the sector. Chairman, Professor Justin Stebbing, said he hoped 2018 would be driven more by stock fundamentals than the politics now wrangling in the US over the Affordable Care Act had ceased.
Iofina PLC (LON:IOF), specialists in the exploration and production of iodine, has announced the completion of construction and commencement of production at its IO#7 IOsorb® plant. In a statement, the AIM-listed firm said that the site has undergone hydrostatic testing and evaluations of its systems and is currently processing iodine rich brine water.
88 Energy Ltd (LON:88E) has kicked off its new 3D seismic exploration programme in Alaska. The programme will cover a 460 square kilometre area, and the aim is to ‘firm up’ potential exploration well sites for the broader Project Icewine venture.
Plexus Holdings PLC (LON:POS) has sold two POS-GRIP rental wellhead sets to Russian partner Gusar for about £1.4mln. The kits will be rented out for gas exploration within the Russian Federation under the agreement signed in 2016 between Gusar and Konar, two independent Russian oil and gas equipment manufacturers.
Tekcapital PLC (LON:TEK), the UK intellectual property (IP) investment group focused on creating marketplace value from university technology, announced that Belluscura PLC has concluded a private placement to raise approximately US$1.33mln through Dowgate Capital Stockbrokers and converted loans equal to approximately US$268,000 to equity under the same terms as the Private Placement. The private placement was priced at 18 US cents (13p) per share, giving Belluscura a post-money valuation of approximately US$3.7mln. Tekcapital holds around 39% of Belluscura’s issued share capital.
Feedback PLC (LON:FDBK) announced today that it has appointed David Crabb as chief executive officer (CEO) of the medical imaging company with immediate effect. The group said Crabb, most recently CEO of software company Cambridge Online Systems, has previously held director-level roles in medium-sized technology and outsourced solutions companies with revenues of between £50mln to over £1bn, with responsibilities including business optimisation, sales and marketing, and workforce leadership.
Chaarat Gold Holdings Ltd (LON:CGH), the gold exploration company operating in the Kyrgyz Republic, has appointed Peter Carter as its new chief operating officer. Carter will lead the Bishkek team and his primary responsibilities will include preparing the company for operational readiness, building the local team, installing international safety standard and establishing suitable environmental management plans.
6.45am: Back to black
The FTSE 100 looks set to open its account in the black after a third straight day of gains on Wall Street with the index of blue-chip shares predicted by the spread betting firms to rise 33 points to 7,201.1.
Overnight Asia’s main markets were mixed with Hong Kong strongly higher, Chinese equities in positive territory and Japan’s Nikkei index hit by the continued rise of the yen against the dollar.
While the movements were broadly positive, the mood was a little skittish ahead of US inflation data that could effectively decide the future trajectory of the country’s interest rates.
“Today’s US CPI [consumer price index] release will be one of the most closely watched data prints in recent times,” said Jasper Lawler of London Capital Group.
“Let’s not forget that the recent rout in equities started with a surprising acceleration in US earnings growth, which promoted fears that inflation may pick up soon, which in turn sent treasury yields higher.
“Should these fears be played out today in an unexpected strengthening in inflation, then a renewed sell off in equities and bonds could be on the cards and the dollar could benefit.
“With so much riding on the CPI data, we are expecting a very cautious morning of trading in general.”
- Pound worth US$1.3902
- Gold trading at US$1,336 an ounce, up US$5.60
- Brent crude US$62.80 a barrel, up 8 cents
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Blackstone, the largest private equity group in the US, has named Jon Gray as president and chief operating officer.
MetLife failed to make pension payments to about 13,500 people
Merck said it would stop a trial of its Alzheimer’s medicine following the recommendation of an external committee, in the latest blow to efforts to find a medicine for the illness.
Goldman Sachs has held out the prospect of a revival in its beaten-up FICC business, saying the bank is willing to deploy more capital to respond to a “more attractive opportunity set.”
BMW is on the verge of signing a landmark deal for the long-term supply of battery metals lithium and cobalt, as it moves to secure raw materials for its push into electric vehicles over the next decade.
Xerox’s proposed merger with Fujifilm is set to be dragged into the courts after Darwin Deason, an activist investor and large shareholder in the photocopier maker, alleged that the deal was “the product of deceit”.
Tim Cook, Apple’s chief executive, disappointed investors last night when he appeared to rule out the possibility it might pay a special dividend with some of the $285bn in cash it is now able to bring back from overseas.
The podcasting platform Audioboom is to merge with Triton Digital, a Los Angeles-based advertising technology specialist, in a reverse takeover.
Shares in Under Armour rose by 15% after the US sportswear brand reported better than expected results for the final three months of 2017.
Nelson Peltz is leaving the board of Mondelez after saying that he was “pleased with the progress” the owner of Cadbury chocolate had made.
Carlsberg CEO says food packaging re-use is one of most effective steps to more sustainable future
Facebook pledges to meet advertiser demands after Unilever criticism
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Crusader Resources brings Brazilian gold project to AIM: A mining company looking to chase gold in Brazil is set to list on London’s junior AIM market. Crusader Resources, which is already listed in Australia, wants to raise up to £11mln by floating in London.
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UK households under pressure as inflation sticks at 3%.
The low-cost airline Norwegian is planning further expansion of its long-haul flight network with London Gatwick as its major global base, and more routes to Latin America and Asia.
Sky and BT Sport retain grip on Premier League rights but TV frenzy cools.
Donald Trump could privatise International Space Station in bid to cut down billions of dollars U.S. spends on space programme.