- FTSE 100 closes down 7 points
- Superdry's CEO explores bid
- Morgan Stanley upgrades Sainsbury, Tesco top retail pick
4:45pm: FTSE finishes slightly lower
At the close, the UK's main index had conceded 7 points to finish at 7,616 for a 0.1% loss on the day.
3:56pm: Busy week ahead
Heading to the close of an eventful but there is plenty to look forward toi next week.
Vodafone reports on Monday after the potential tie-up of its loss-making Italian business fell through this week, followed on Tuesday by BP, while Thursday sees Anglo American, AstraZeneca, British American Tobacco and Watches of Switzerland set to report.
It's a quieter week for economic data with retail sales numbers from the British Retail Consortium on Monday, the RICS house price balance on Friday.
2:48pm: Nasdaq jumps as Meta soars but payrolls sink hopes of March rate cut
US stocks made mixed progress as a blow-out jobs knocked a March rate cut on the head taking some of the shine off gains by Meta and Amazon.
Shortly after the opening bell, the Dow Jones Industrial Average was down 0.4% at 38,377.32, the S&P 500 was up 0.2% at 4,916.63 and the Nasdaq Composite was up 0.7% at 15,462.19.
ING's James Knightley said the jobs figure was "crazy strong," and means the Federal Reserve will be in "no hurry" to cut interest rates.
"This combination of strong jobs and wages with unemployment falling indicates clear strength in the US economy and even though inflation is still tracking towards 2% the Federal Reserve simply won’t consider cutting rates at the March FOMC meeting," he said.
Meta soared 19% after its dividend, buy back and stroing results - Bank of America was impressed and raised its price target to $510 from $425.
Amazon rose 7.2% while Apple slipped 2.5%.
1:40pm: Stocks off highs after blow-out non-farm payrolls
The US economy added a blow-out 353,000 jobs in January, smashing consensus expectations of around 180,000.
There were also upward revisions to November and December of 126,000 while the unemployment rate stayed steady at 3.7%
The figures from the US Bureau of Labor Statistics showed job gains occurred in professional and business services, health care, retail trade, and social assistance. Employment declined in the mining, quarrying, and oil and gas extraction industry.
The labor force participation rate, at 62.5% was unchanged in January while average hourly earnings rose 0.6% from December.
US stock futures remain firmly in positive territory but the figures will further reduce the chances of any March rate cut in the US.
In London, the pound has fallen back and stocks have eased a touch.
1.35pm: Here’s a recap of the risers and fallers on the market today
Shares in Superdry PLC (LSE:SDRY) soared over 110% on the back of a newspaper report that a hedge fund has taken a 5% stake as it sees the clothing retailer to be a likely bid target.
Norwegian-based First Seagull has bought a 5.3% stake in the Cheltenham-based retailer, The Times reported, citing regulatory filings.
Wizz Air Holdings PLC (AIM:WIZZ) shares rose 7% despite the carrier seeing a dip in load factor in January 2024 due to the problems in the Middle East though the number of passengers carried overall rose year on year.
The Central Europe-based airline had halted flights to Tel Aviv following the fighting in Gaza but these will resume in March while flights to Aqaba and Abu Dhabi restart at the weekend.
Orchard Funding Group shares were sent over 30% lower this Friday due to concerns over its guaranteed asset protection (GAP) offering.
GAP protection is designed to cover the difference between the current market value of a vehicle and its original purchase price in the event of damages or theft, as an insurer typically deducts depreciation when paying out to customers.
1:26pm: BAT reaches patent settlement with Philip Morris
Shares in British American Tobacco have bounced a little after it said it has reached a patent settlement with US tobacco rival Philip Morris International.
Several European cases have been ongoing between the two over alleged patent infringements for certain vapour products and heat-not-burn cigarette technologies.
Friday's settlement includes provisions that the two companies resolve all ongoing infringement litigation, and prevents future claims from either party over current heated tobacco and vapour products.
BAT shares are now up 1.5%.
1:07pm: Kate Thomson named permanent CFO at BP
BP PLC (LSE:BP.) on Friday named Kate Thomson as its permanent chief financial officer, after being in the interim role since September.
Thomson has been interim CFO of the oil major since September 2023 after the then finance chief Murray Auchincloss was named interim chief executive after Bernard Looney resigned.
In January, BP has named Auchincloss as its permanent CEO.
Kate Thomson said: "It's a privilege to become CFO and to join bp's board. We've made great progress through the past few years in strengthening bp, and I have no doubt this will continue
12:40pm: Morgan Stanley (NYSE:MS) ups Sainsbury, Tesco top pick, cuts AB Foods/Kingfisher
Some big moves in food and general retail stock prices following a note from Morgan Stanley (NYSE:MS) - with Sainsbury up 3.0%, Tesco up 2.3% but AB Foods down 0.7%.
Morgan Stanley (NYSE:MS) has made Tesco PLC (LSE:TSCO) its top pick in European Retail in a wide-ranging note that includes an upgrade for J Sainsbury but downgrades for H&M, AB Foods and Kingfisher.
The investment bank said its thesis for the year ahead is simple.
As price inflation moderates across geographies, top line growth will become increasingly reliant on volumes.
“We expect retailers who are in the sweet spot to be rewarded by the market, as volume-led top line growth should command a higher multiple and as volumes improve, margins stand to benefit from operating leverage.
The bank said the market is overly fearful of deflation and missing the bounce-back in volumes.
It expects volumes/mix to turn positive from the second quarter, driving 2025 annual growth of 2.5%.
On the inflation front, MS expects 1%-4% for the year ahead.
Tesco, rated overweight, is its top pick. “We see 6% EPS upside to Street,” the bank said.
It also expect the cash payout will be increased at the annual results (via extra buyback or divi) and has raised EPS estimates.
Morgan Stanley (NYSE:MS) has upgraded Sainsbury to equal weight from underweight, predicting an improving margin outlook in grocery, plus launch of a buyback at its CMD. It has raised EPS estimates by 5% and 11% for the next two years.
But Primark owner AB Foods, has been cut to equal weight from overweight believing the margin recapture narrative has played out while there are risks to volume growth.
Kingfisher has been lowered to underweight from equal weight with Morgan Stanley (NYSE:MS) expecting trends in DIY across UK / France / Poland to remain challenging for the next 12 months.
It expects consensus forecasts to come down a further 4%.
B&M remains at equal weight with M&S reiterated at overweight.
12:08pm: Nasdaq to soar after Meta and Amazon; jobs report to come
The Nasdaq is set to open sharply higher after gains in Meta and Amazon after the market close although the mood could be soured depending on the US jobs report.
In pre-market trading, futures for the Dow Jones Industrial Average were up 0.1%, while those for the S&P 500 rose 0.5% and contracts for the Nasdaq 100 futures climbed 1.0%.
Meta shares are up 17% in pre-market trading after it declared its first ever dividend, a $50 billion buyback and better-than-expected sales while Amazon, up 7.2%, also beat the Street.
Apple was more disappointing - shares down 2.4% - after weak Chinese sales cloude results.
Ahead of the US open, job figures are expected to show the US economy added 180,000 jobs in January, down from 216,000 in December.
Elsewhere, Chevron and Exxon Mobil are both up after earnings - Exxon posted full-year net income of $36 billion, down from $55.7 billion the previous year, but otherwise its biggest since 2012.
Chevron’s net income of $21.4 billion was down from $35.5 billion the previous year, but otherwise its strongest since 2013.
11:50am: Goldman sees first UK rate cut in May; BofA in August
A bit of reflection on yesterday’s rate decision by the Bank of England.
Goldman Sachs viewed the implications of the decision as mixed.
The vote split was more hawkish than it expected (it predicted 9-0) but at the same time, the MPC made more significant changes to the guidance than it had anticipated opening the door to rate cuts at upcoming meetings.
Goldman expects incoming data will confirm that inflationary pressures are easing, giving the Committee the confidence needed to start to lowering Bank Rate in the coming months.
“We stick to our baseline forecast for a first cut in May, although we see the decision to start in May versus June as a close call.”
Bank of America thinks the first rate cut will come in August.
It said the vote with 2 members calling for hikes, 6 for a hold, and one for a cut was marginally more hawkish than the 1-7-1 it was expecting.
“And the communication from Bailey during the press conference was flawless, with no room for more dovish interpretations,” it added.
“We still expect the BoE to keep the Bank Rate on hold at 5.25% until August, with a cutting cycle of 25bp per quarter from there.“
“The UK will be the last of the major central banks to start and is likely to move more slowly, at least compared with the ECB.”
11:23am: Supedry's CEO exploring takeover options
No smoke without fire, as Superdry confirms its Chief Executive Julian Dunkerton has made a request to the company’s chairman to explore an offer for the company.
Dunkerton is in talks with potential financing partners, with a cash offer for the company among the possibilities.
He has until March 1 to make an offer or walk away, the company said.
11:07am EasyJet rises after well-received Holidays seminar; Barclays upgrades
Shares in easyJet rose 3.1% after a well-received presentation on its Holidays business.
Bank of America said Holidays CEO Garry Wilson presented a “compelling case” for how the business will maintain its strong growth trajectory and take share from competitors in the UK, with a view to eventually surpassing them and becoming the top operator in the market.
The business boasts a model that is hard to replicate, underpinned by a network that far exceeds that of tour operator peers, it explained.
BofA thinks Holidays will be a key part of the medium-term growth story at easyJet.
It raised 2024 pretax profit forecasts by 10% to £645 million and increased its price target to 730p from 690p.
Barclays upgraded easyJet from equal weight to overweight and raised its price target to 700p from 450p.
It said the seminar indicated the medium-term term goal for Holidays of £250 million pretax profit is most likely to occur in financial 2026.
It said the 5-10% market share growth should come from converting two-thirds of its existing customers flying during do-it-yourself holidays into full-service customers, one-fourth from legacy tour operators and a sixth from OTA customers travelling on other airlines.
Barclays explained the rating upgrade reflected increases to financial 2024 and 2025 pretax profit forecasts of 33%, taking it above consensus.
“EasyJet has the optimum growth fleet at this time and Barclays has a favourable view of its Holidays business,” it added.
Barclays has also upgraded Wizz Air to equal weight from underweight with the price target upped to 2,200p from 1,750p.
It thinks any signs of easing tensions in Israel and Ukraine will be supportive for prospects.
It held off upgrading to overweight because it thinks the substantial one-time gains that the company expects to benefit from in 4Q24, will come at the price of future profitability.
Barclays expects strong unit revenues in financial 2025, but expects significant unit cost pressures.
Shares in Wizz Air are more than 8% higher - the business also released passenger numbers on Friday.
10:52am: Superdry more than doubles
It may be a quiet Friday but shareholders in Superdry - depending when they bought stock - will be feeling a bit better about life.
Shares more than doubled on Friday - up 112% - on the bid rumours - see my 9.35am update.
But before we get too carried away shares remain down 63% in the last 12 months.
Still, it's livening up things in the UK market.
10:33am: Jefferies upgrades Wise on upbeat prospects for Card business
More on the Jefferies upgrade on Wise Group PLC which has helped push shares 3.1% higher.
“We think Wise is at an inflection point in its Card business, generating the next leg of growth after FX transfers and neo-bank like products (assets, interest),” the broker said.
It added the newly launched JefData WATT corroborates its view on internationalization and user stickiness driving financial 2025/26 Ebitda estimates 23-57% higher.
This puts Jefferies 17% and 26% above consensus, it said.
It upgraded to buy from hold, with an increased price target of 1,024p, up from 717p. .
9:50am: London rides on the wave of renewed US optimism
Blue-chips remain in the green lifted by the positive mood across the pond.
AJ Bell's investment director Russ Mould said while the scorecard for the Magnificent Seven in the current earnings season to date "is mixed, Amazon and Meta certainly produced stand-out quarterly updates, with Meta unveiling a maiden dividend in what felt like a significant milestone."
He added that it "feels a healthier situation to have the markets driven by strong earnings and corporate success rather than ongoing guesswork about when central banks are going to cut rates."
9:35am: Superdry skyrockets on takeover talk, hedge fund takes stake - report
Shares in Superdry PLC (LSE:SDRY) have leapt 64% after The Times reported a hedge fund has taken a 5% stake and increasing talk of a bid for the embattled retailer.
The Times reported a Norwegian-based alternative investment fund has bought a 5.3% stake in the Cheltenham-based retailer, according to regulatory filings.
It is understood that First Seagull considers Superdry to be ripe for a bid after a series of profit warnings over the past year drove down its share price.
Sycamore Partners, an American private equity company, and Authentic Brands Group, which owns Ted Baker and Forever 21, are said to have Superdry on their radars, the report said.
The Times quoted sources who suggested that the value of Superdry owned by a brand management company would be about £400 million to £600 million, compared with its present market cap of about £34 million.
At their peak in early 2018 the company’s shares were just shy of £20, giving it a valuation above £1.7 billion.
The firm has struggled in recent times and reports this week said the firm was looking at cutting costs which could include store closures.
9:24am: Close Brothers slides on downgrade, Electrolux warns
Elsewhere, AO World is down 0.3% and Curry’s is down 0.7%, missing out on the market rally which may reflect a warning from Electrolux.
The firm warned that weak demand will continue into 2024 causing a continued fall in earnings, after sales in a “challenging” 2023 were hit by high interest rates, inflation and geopolitical tensions.
Operating income at the world’s second-largest home appliances maker more than halved last year on flat sales.
Shares in Electrolux slumped 6.0%.
Meanwhile, the leading faller in the FTSE 250 is Close Brothers, down 3.6%, hit by a downgrade by RBC to ‘sector perform’ from ‘outperform.’
The broker has cut its price target to 650p from 800p.
9:00am: Utilities rise on inflation busting price rises
Severn Trent and United Utilities are prominent risers in the FTSE 100 after Water UK, the industry trade body, said bills would increase by 6% or £2 a month on average next financial year – far more than the current 4% inflation rate.
Pennon Group is also higher, rising 1.3%.
Water UK said the average combined bill for water and sewage services would be £473 – or £1.29 a day – from April.
Elsewhere, Sainsbury is up 2.2% ahead of its strategy update next week.
8:35am: FTSE 100 remains upbeat
The FTSE 100 remains in rude health, now up 34 points at 7,656.
BT rose 2.0% on further consideration of Thursday’s trading statement while Scottish Mortgage Investment Trust PLC (LSE:SMT) climbed 1.7% feeling the love from last night’s gains in technolday share prices.
Entain and Flutter Entertainment gained after Deutsche Bank increased price targets for both but BP and Shell are both down after the oil price eased after the London close Thursday.
Elsewhere, Wise jumped 2.6% after Jefferies upgraded to ‘buy’ from ‘hold.
8:15am: FTSE 100 soars amid tech euphoria after Meta fireworks
The FTSE 100 soared on Friday amid renewed tech euphoria in the US after a spectacular jump in the share price of Facebook-owner, Meta Platforms.
At 8:15am, London’s lead index was up 0.6% at 7,667.51 while the FTSE 250 soared 1.3% to 19,381.43.
Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown said a flurry of results from across the pond last night had set a “rather positive scene.”
Meta shares soared 15% in after hours trading which Lund-Yates said was “remarkable” after it announced its first ever quarterly dividend and a hefty share buyback.
She said the returning of cash to shareholders is a “bold and well-regarded move.”
“The amount of free cash pumping through the business means it’s more than able to afford it, and it helps pay investors for their patience as Meta works out the next generation of growth and all the Metaverse entails,” she added.
Back in London, and it was a quiet day for company news.
YouGov fell 2.5% despite saying it expects to meet market expectations despite a slow first quarter.
The company did highlight longer sales cycles which may have knocked the mood.
Analysts at Peel Hunt were positive, raising its price to 1,500p from 1,360p.
It said: “We are now at a turning point where revenue growth should start to accelerate given the much improved sales pipeline.”
Elsewhere, Wizz Air jumped 5.2% after its traffic numbers and as Barclays upgraded to ‘equal weight’ from ‘underweight.’
easyJet also rose, by 2.5%, as Barclays upgraded to ‘overweight’ from ‘equal weight.’
In the currency markets, the pound remains in demand, up a further 0.2% to $1.2764 after the Bank of England’s decision to leave interest rates unchanged on Thursday.
7:41am: RyanAir, Wizz Air load factors drop in January
Ryanair Holdings PLC (LSE:RYA) reported 3% growth in passenger numbers in January but a reduced load factor.
The Irish budget airline said it carried 12.2 million passengers in January compared to 11.8 million the year before with the load factor down 2 percentage points to 89% from 91%.
It operated over 71,700 flights in January with over 950 flights cancelled due to Israel/Gaza conflict.
As previously guided, the short-term reduction to the load factor was due to the removal of Ryanair flights from most online travel agents “pirate” websites in early December.
Elsewhere, Wizz Air Holdings PLC (AIM:WIZZ) carried 4.74 million passengers in January, a 14.2% increase year-on-year, at a load factor of 82.0%, down 4.1 percentage points from last year.
The airline said it the drop in load factor reflected the reallocation of capacity in response to evolving geopolitical events.
Wizz Air said it is actively implementing measures to support a recovery in load factor going forward.
7:29am: YouGov confident of hitting City expectations
Fewer fireworks in London so far this Friday.
But there is a trading update from YouGov PLC which said it was confident of meeting market expectations despite a slow first quarter.
The London-based research and data analytics group said in the six months ended January 31 trading was “resilient,” despite the continued challenging macro-economic environment.
It said sales cycles are longer but that sales momentum, after a slow first quarter, has significantly accelerated in the second quarter.
Encouragingly, the firm said it continues to see sales momentum in the technology sector, while some other sectors have been “more challenging.”
Performance has been driven by stable demand in its Data Products and Research divisions, while discretionary spend continues to be impacted by general market softness.
It said it had delivered revenue growth in the business on a like-for-like basis, and that reported revenue for the first half will be strong, although it gave no specific numbers.
YouGov said the recently acquired Consumer Panel Services of GfK has been trading ahead of expectations since the acquisition announcement in July 2023.
The firm will release half-year results on March 26.
7:00am: FTSE 100 set to open strongly
The FTSE 100 is expected to open sharply higher on Friday after Wall Street rallied and Meta provided some fireworks after the US close.
Spread betting companies are calling London’s lead index up by around 53 points after closing down 8.41 points, 0.1%, at 7,622.16 on Thursday.
On Wall Street, markets leapt recouping most of Wednesday’s heavy losses and closing well above the levels seen at London’s close.
The Dow Jones Industrial Average rose 1.0% white both the S&P 500 and the Nasdaq Composite climbed 1.3%.
After the closing bell in New York, Meta leapt 15.6% after unveiling a $50 billion share buyback, its first ever dividend and better-than-expected results.
Amazon jumped 7.1% after revenue and earnings topped Street expectations but Apple slipped 2.9% after sales in China dropped 13%.
Later today, US non-farm payrolls will take centre stage alongside results from Chevron, Exxon Mobil and Bristol Myers.
Back in London, investors will be digesting yesterday’s interest rate call while YouGov will update on trading.