- FTSE 100 up 1 point at 7,488
- Nationwide: Black Friday transactions up on last year
- Consumer confidence improves in November
4.45pm: FTSE finishes flat
London's blue-chips finished flat at 7,488, under pressure earlier as the pound ticked up, along with bond yields, after better-than-expected consumer confidence figures.
3:53pm: KPMG freezes pay for staff
KPMG has frozen pay for around 12,000 employees in the UK, as the gloomy economic climate hits demand for its services across the firm, the FT reported.
Bosses at the Big Four accountancy firm told staff across its four divisions in recent weeks that they would not receive a pay rise this year unless they were promoted, according to people familiar with the matter.
The move comes just weeks after KPMG, where UK partners last year earned on average £717,000, launched a fresh round of job cuts and froze pay in its deals advisory arm following a prolonged slowdown in dealmaking.
3:15pm: US business activity in line as services grow
The FTSE 100 has pushed into the green after a survey showed US business activity expanded during November, with the rate of growth in line with that seen in October.
The headline S&P Global Flash US PMI Composite Output Index posted at 50.7 in November, unchanged from October, and in line with the FXStreet-cited consensus of 50.7.
The figure was boosted by the first expansion in service sector new business for four months which helped support a renewed rise in total new
orders during November.
The Flash US Services Business Activity Index totalled 50.8 in November, up from 50.6 in October, and above the FXStreet consensus of 50.4.
This was offset by a drop in the Flash US Manufacturing PMI to 49.4 in November, a three-month low, down from 50.0 in October, and below the FXStreet consensus of 49.8.
The FTSE is now up 1 point at 7,485.
2:45pm: US mixed as shortened session begins
US markets made a steady start to a shortened session on Friday as investors awaited flash PMI figures for a gauge of how the world's largest economy is performing.
Shortly after the opening bell, the Dow Jones Industrial Average was up 54.52 points, 0.2%, at 35,327.55, the S&P 500 was little changed at 4,555.93 and the Nasdaq Composite was down 14.61, 0.1%, at 14,251.25.
Figures from S&P Global are expected to show an unchanged composite reading at 50.7, with manufacturing expected to head from 50 to 49.8 with services climbing to 50.6 to 50.4.
The data comes on the back of figures that showed improvments in the private sector in both the UK and Europe.
Retailers were in the spotlight as Black Friday got underway with Walmart and Amazon up 0.3% but reports that Nvidia will delay the launch of an AI chip in China pulled the shares dwon 0.9%.
IRobot surged 30% after Reuters reported that Amazon is about to win regulatory approval in the European Union to move forward with its $1.4 billion acquisition of the robot vacuum maker.
2:10pm: Entain pays £585 million to settle Turkish bribery probe
Entain PLC (LSE:ENT) has agreed to pay £585 million to settle a bribery probe into its former Turkish business.
The betting operator which owns Ladbrokes and Corals said it would also make a charitable donation of £20 million and pay a £10 million contribution to the HMRC and CPS costs.
The settlement relates to HMRC's investigation into the company's legacy Turkish-facing business, which were sold in 2017, and the activities of former third-party suppliers and former employees of the group.
HMRC originally launched an investigation in 2019 into “potential corporate offending” by a Turkish-facing online betting and gaming business that Entain owned between 2011 and 2017.
Entain, formerly known as GVC, was accused of failing to have the correct procedures in place to stop people taking part in bribes that benefit the business.
Entain said the terms were in line with those laid out in August when it updated the market on the case.
The financial penalty, disgorgement of profits and the charitable donation will be paid in instalments over four years.
1:35pm: Market Movers
Risers
Vodafone Group PLC (LSE:VOD) is the FTSE 100’s biggest riser, up 1.3%, on the back of reports that Swisscom-owned Fastweb could be interested in purchasing its Italian business.
Fallers
RUA Life Sciences (AIM:RUA) PLC, a medical device company specialising in the Elast-Eon biostable polymer, saw its share price drop 12% in the wake of its trading update, which recorded a 28% drop in revenues for the six months ended 30 September 2023.
Team17 Group PLC (AIM:TM17) shares plunged 42% to 181p as the games developer and publisher said it expects revenues to be “modestly ahead” of expectations but said cost overruns and a number of accounting impairments will reduce earnings.
1:11pm: Vodafone edging closer to sale of Italian arm
Italian telecom operator Fastweb is exploring a potential deal for Vodafone Group PLC (LSE:VOD)’s local operations, Bloomberg reported, citing people with knowledge of the matter.
Fastweb, which is owned by Swisscom AG, is among suitors that have been studying a potential combination with Vodafone Italy, the people said, asking not to he identified because the information is private, the report said.
Vodafone has also continued to hold on-and-off discussions in recent months with French billionaire Xavier Niel’s Iliad SA about a potential merger of their Italian businesses, the people said, adding that there is no certainty whether Vodafone will decide to proceed with any transaction.
12:47pm: Trade strong ahead of Black Friday, says Barclays
In the week leading up to Black Friday, Barclays reported transactions were up 1.42% year-on-year as retailers continued to launch sales earlier in the month.
The data from Barclays, which sees nearly half of the nation’s credit and debit card transactions, shows the number of transactions were up 1.42% on last year and up 2.25% compared to the equivalent week in October.
Additional consumer research* conducted by Barclays found that more than a third (34%) of consumers plan to shop in the Black Friday/Cyber Monday sales this year, increasing to 50% for those aged 18-34.
A similar proportion (37%) said they intended to skip Black Friday 2023.
Marc Pettican, head of Barclaycard Payments said: “Over the last few years we’ve seen Black Friday sales arrive earlier and earlier, with shoppers spreading their spending over a longer period of time."
"Although the cost-of-living may be impacting some shoppers' spending on non-essential items, many are still taking the opportunity to bag a Black Friday bargain" he added.
"No doubt this will be welcome news to retailers who may have anticipated a slower November as shoppers' budgets continue to be squeezed," he suggested.
12:10pm: US markets seen flat in shortened session
US stocks are expected to make cautious early progress although volumes may be light in a shortened trading session following Thanksgiving.
In pre-market trading, futures for the Dow Jones Industrial Average were up 0.2%, while those for the S&P 500 were 0.1% higher, and contracts for the Nasdaq 100 futures eased 0.1%.
Retailers will be in the spotlight with hopes that a strong Black Friday will provide a solid backdrop for firms heading into the key festive period.
Joshua Mahoney at Scope Markets said: “US markets return from their Thanksgiving break today, with retailers hoping that the spirit of giving translates into a strong Black Friday and Cyber Monday spending spree.”
“Earnings from the likes of Walmart and Best Buy have noted a weakening demand environment, signalling the potential for a disappointing fourth quarter on the high-street.”
“Nonetheless, with spending habits having remained strong throughout this year, there is a good chance that we see consumers take advantage of sales where possible in a bid to maintain their standard of living.”
Friday’s main focus will be PMI data which comes in the wake of yesterday’s rebound in both eurozone and UK composite PMI surveys which eased fears of a deepening economic crisis under the weight of elevated interest rates.
Stocks to watch include Nvidia which eased 1.9% in pre-market trading after Reuters reported the chipmaker told customers in China it was delaying the launch of a new artificial intelligence chip to comply with US export rules until the first quarter of next year.
11:35am: Sterling ticks higher after consumer confidence improves
The pound has ticked up, as have bond yields, after today’s better-than-expected consumer confidence figures from GfK.
Sterling is trading 0.2% higher at $1.2588 after the survey showed an improvement in confidence, a welcome boost ahead of the festive period,
Meanwhile, 10-year yields rose 0.05 percentage points to 4.31%, with the improved consumer confidence outlook, coming on the back of an unexpected increase in business activity on Thursday.
Comments from the Bank of England’s chief economist Huw Pill (see 9:54am) who warned of the dangers of stubbornly high inflation were also supporting sterling and bond yields.
11:06am: HSBC plagued by tech problems on Black Friday
Not a great start to Black Friday for HSBC's UK who have faced technical problems with their banking services.
HSBC said it is investigating the problems as “as a matter of urgency”, as customers report problems using its app or accessing online banking.
We understand some customers are having trouble accessing banking services as usual right now.
We're investigating this as a matter of urgency and will share an update as soon as possible.
— HSBC UK (@HSBC_UK) November 24, 2023
HSBC said: "We understand some customers are having trouble accessing banking services as usual right now."
“We’re investigating this as a matter of urgency and will share an update as soon as possible.”
We’re working hard to restore Mobile and Online Banking service, and the authorising of online card purchases via the app. We’re really sorry for the inconvenience. We’ll share updates here.
— HSBC UK (@HSBC_UK) November 24, 2023
10:41am: German business confidence improves - ifo
German companies are feeling slightly less pessimistic in November compared to the prior month, survey data on Friday suggested.
The ifo business climate index rose to 87.3 points in November from 86.9 in October.
It was the index's third monthly increase in a row, but lagged FXStreet-cited market expectations of 87.5 points.
#Germany's leading business #sentiment indicator, the #ifo index vs. German #GDP growth.
Don't shoot the messenger. pic.twitter.com/YO0L7Skq76
— jeroen blokland (@jsblokland) November 24, 2023
"Companies assessed their current business situation as somewhat better. Expectations for the coming months were also less pessimistic. The German economy is stabilizing, albeit at a low level," ifo explained.
ING Economics said "it's better than another drop but the latest improvement in the Ifo index is too insignificant to really celebrate."
"It points to a bottoming out of the German economy, rather than an imminent rebound," it said.
10:08am: Nationwide says early Black Friday activity up on last year
You may have noticed from the deluge of offers and promotions that it's Black Friday today.
Retailers will be pinning thier hopes for a strong day of sales and one indicator has pointed to an increase in activity compared to last year.
Nationwide said in a "Live Black Friday spending data" that at 9am 1.49 million transactions had been made so far today, 15% higher than an average Friday, with the number of purchases made 9% higher than on Black Friday last year.
Live Black Friday spending data - 9am update: 1.49m transactions made so far today - 15% higher than an average Friday. Number of purchases made is 9% higher than on Black Friday last year. #spending #BlackFriday #costofliving https://t.co/BVJN4ZUoul
— Nationwide Press (@NationwidePress) November 24, 2023
9:54am: BoE's Pill warns of difficult phase in tackling stubbornly high inflation
Some more now on the comments by the Bank of England's (BoE) chief economist Huw Pill.
In an interview in the Financial Times, Pill said the BoE cannot afford to relent in its battle against high inflation just because it sees signs of weakening economic activity.
Pill said UK monetary policy was in a “difficult phase” as he warned of “stubbornly high” price pressures in the British economy following multiple shocks including the pandemic and the surge in energy costs.
He insisted the Monetary Policy Committee had to resist the temptation to “declare victory and move on” from its battle to quash inflation that at 4.6% in October still remained well above the bank’s 2% target.
Key indicators the Bank was focusing on, services inflation and pay growth, remained at “very elevated levels,” he added.
The comments came after Pill this month wrongfooted financial markets by raising expectations for interest rate cuts next year.
Pill said at an online event, shortly after the BoE held rates at 5.25%, that investors were not “unreasonable” in expecting the central bank to start cutting rates from next summer.
9:38am: Entain and Flutter price targets cut
The two FTSE 100-listed betting operators are amoing the fallers today after brokers lowered price targets for the two firms
Flutter Entertainment, the owner of Paddy Power and Betfair, had its price target cut by UBS 17,300p from 18,670p although the Swiss bank maintained a 'buy' rating.
Barclays trimmed its target for Flutter to 15,300p from 16,000p and ket an 'equal weight' rating.
For Entain, which owns Ladbrokes and Coral, UBS lowered its targte to1,420p from 1,570p but kept a 'buy' rating while Barclays moved its target to 1,120p from 1,330p before and reiterated an 'overweight' rating.
Barclays said: "We think the more intense competitive backdrop in the US is likely to provide a more challenging backdrop for US valuations within the share prices of Flutter and Entain."
Shares in Flutter are down 1.6% and Entain is down 1.1%.
Elsewhere, Sage, which is down 1.8%, was downgraded by Cannacord to 'sell' from 'hold'.
9:15am: UK consumer confidence improves in November - GfK
UK Consumer Confidence staged an end-of-year rally, according to the closely-watched survey from market research firm, GfK.
The report showed a six point rise in the headline score in November despite ongoing cost-of-living concerns which is good news for retailers on Black Friday and as the key festive season approaches.
GfK said its Consumer Confidence Index increased negative 24 from negative 30 in November with all five measures were up in comparison to last month’s announcement.
GfK’s long-running Consumer Confidence Index increased six points to -24 in November. All five measures were up versus last month’s announcement. Read the full story https://t.co/TZol0rosYo pic.twitter.com/4HlfgWJJ1Z
— GfK - An NIQ Company (@GfK) November 24, 2023
Joe Staton, client strategy director GfK, said: “Recent ups and downs in confidence have underlined the nation’s topsy-turvy economic mood as encouraging news about falling inflation and wage growth is offset by high personal taxation, alongside costly fuel and energy bills.”
“Although the Overall Index Score is still tracking firmly in negative territory, it is good to see that consumers are more optimistic about their personal financial situation,” he said.
He highlighted a "dramatic” 10-point jump in the major purchase sub-measure, reversing some of the “worrying” 14-point drop last month, which he felt would be good news for retailers looking to benefit from Black Friday and Christmas.
Gabriella Dickens at Pantheon Macroeconomics expects confidence will continue to strengthen, as real disposable income picks up, supported by a further period of catch-up growth in real wages and an easing drag from mortgage refinancing.
She thinks "at the margin," the two percentage point reduction in the main rate of National Insurance contributions in January, which will boost aggregate disposable income by about 0.5%, also likely will bolster sentiment.
8:50am: FTSE 100 drifts lower in light volumes
The FTSE 100 continues to drift lower in thin trading, down 25 points, with a shortened session in the US ahead.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown said the lead index doesn’t seem to have that "Friday feeling," with the Thanksgiving break meaning volumes "are thin on the ground."
At the same time, she pointed out there isn’t a great deal of corporate or economic news to sway the index.
She suggested there may well be an element of "wait-and-see coming from the city," with the jury still out on whether a recession is coming next year.
But with growth and consumer activity likely to be "sluggish at best," the FTSE "could face an uphill battle in the short-term," she thinks.
Barclays rose 0.5% after Reuters reported it was targeting £1 billion in cost cuts while the improved consumer confidence figures boosted retailers such as Tesco and B&M.
Sage is down 1.3% on profit-taking after it hit a record high earlier this week while BT is down 1.6% after it jumped on Wednesday after the Autumn Statement saw full expensing made permanent.
The telco also gave a presentation on its Business unit on Wednesday which left some analysts underwhelmed.
8:16am: Stocks ease as BoE's Pill highlights stubborn inflation
The FTSE 100 has opened lower as a leading Bank of England official said it was too early to declare victory in the battle to tame inflation.
At 8:15am, London’s blue-chip index was down 18.81 points, 0.3%, at 7,464.77 while the FTSE 250 eased 33.79 points, 0.2%, at 18,447.04.
Huw Pill, the Bank of England’s chief economist, told the Financial Times that the Bank of England cannot afford to relent in its battle against high inflation just because it sees signs of weakening economic activity.
Pill said UK monetary policy was in a “difficult phase” as he warned of “stubbornly high” price pressures in the British economy following multiple shocks including the pandemic and the surge in energy costs.
Markets had begun pricing in cuts to interest rates as early as next Spring, but central banks have pushed back against these hopes, prompting a renewed spike in bond yields.
Elsewhere, there was a welcome boost in UK consumer confidence according to a survey from GfK, which rose to negative 24 in November, from negative 30 in October, above the consensus, of negative 28.
In company news, Harland & Wolff rose 4.5% after it revealed it had a bid approach for the Isles of Scilly ferry operator – although the offer was rejected – while Mothercare fell 4.2% after reporting trading in franchise stores in the Middle East remains challenging.
7:59am: L&G takes on Boots' pension scheme
Legal & General Group PLC (LSE:LGEN) has agreed a £4.8 billion full buy-in with the Boots Pension Scheme, the UK’s largest single transaction of its kind by premium size and, for L&G, the largest single transaction by number of members.
L&G has a long-standing relationship with Boots, having provided investment management services to the scheme for over 20 years.
Activity in the UK pension risk transfer (PRT) market remains strong, L&G said, with rising pension funding ratios driving unprecedented demand.
In aggregate, L&G has transacted around £13.4 billion of global PRT this year.
For Boots, the move is seen as paving the way for the sale of the pharmacy chain by owner Walgreens.
7:52am: Barclays targets £1 billion cost savings - Reuters
One stock to keep an eye on is Barclays after reports it is working on plans to save as much as £1 billion pounds which could involve cutting as many as 2,000 jobs, mainly in the British bank's back office.
Managers at Barclays, led by Chief Executive CS Venkatakrishnan are reviewing proposals to bolster its profitability, Reuters said, and as part of these 1,500 to 2,000 jobs could be cut if implemented in full.
Exclusive: Barclays working on $1.25 billion cost plan, could cut up to 2,000 jobs -source https://t.co/T7omcA63IV pic.twitter.com/wGQzpIYvRL
— Reuters Business (@ReutersBiz) November 23, 2023
Discussions are ongoing and the lender could ultimately prioritize layoffs in other areas, the report said.
7:44am: Motercare predicts more franchise store closures
We've also had results from Mothercare which has predicted more store closures in its franchised stores as it reported a drop in half-year sales.
The rettailer reported increased profit in the first half despite a drop in sales as performance in the Middle East remained challenging.
it said in the statement 26 weeks to 23 September, turnover fell to £29.0 million from £38.5 million the year before with international retail sales by franchise partners slipping 15% to £137.2 million from £162.1 million.
This reflected difficult trading conditions in the Middle East which was down 20% on last year, with continuing operations excluding the Middle East down 6% on last year at constant currency.
Mothercare said it “acutely aware” of the pressure on franchise partners' profitability and the consequent need for them to reduce costs which is likely to lead to further reductions in store numbers.
“We do not currently expect our combined efforts to offset full this impact on the Group results for the financial year to March 2024 and beyond,” the firm said in a statement.
Adjusted Ebitda improved 12% to £3.6 million from £3.2 million, reflecting tighter control of costs, while adjusted pre-tax profits increased 17% to £3.4 million from £2.9 million.
7:28am: Harland & Wolff bid for Isles of Scilly ferry operator rebuffed
Harland & Wolff Group Holdings PLC (AIM:HARL) has seen a bid approach for Isles of Scilly Steamship Company Ltd rejected.
The British shipbuilding and fabrication company said it has been considering the opportunity to build and/or operate ferries to service the Isles of Scilly to Penzance route, which it believes is significantly underserved.
It believes there is a clear strategic, operational and financial rationale for the proposed acquisition and expressed disappointment that the approach had been rejected.
On Wednesday, after the London close, Isles of Scilly Steamship disclosed the bid approach which it “unequivocally rejected.”
It didn’t fell the proposal from H&W was in the best interests of the company's shareholders.
Harland & Wolff has said it would consider its options and under takeover rules has until December 21 to firm up a bid.
7:00am: FTSE 100 expected to open lower
Good morning, and it is expected to be a weak open by blue-chips when trading gets underway in London on Friday.
Spreading betting companies are calling the FTSE 100 down by around 17 points after closing up 14.07 points, 0.2%, at 7,483.58 on Thursday.
US markets were closed on Thursday for the Thanksgiving holiday and today will reopen for a shortened session meaning volumes may once again be light.
Activity in the bond market will be watched after yields rose on Thursday amid strong PMI data in Europe and the UK, and after the minutes of the ECB meeting.
In the UK, there was better news for businesses heading into Black Friday and the festive period as GfK’s consumer confidence index improved although it remains at low levels.
Otherwise, London’s corporate diary is looking fairly quiet for now.