- Blue chips down 13 points to 8,425
- Energy prices to hit 2-year low
- Gamestop tumbles back to reality
15.59pm: FTSE 100 to close lower
The FTSE 100 is set to close out the week lower after it suffered a 14-point drop on Friday.
Attempting to push the blue-chip index higher were several mining companies including Rio Tinto, Fresnillo, Antofagasta and Anglo America, all of which lifted more than 2.5%.
However, the rise was unable to limit the drops being led by the likes of Entain, Ashtead, Spirax-Sarco Engineering (LSE:SPX) and Burberry.
Land Securities, the commercial property developer, suffered a 3% drop after it reported a loss before tax of £341 million due to a valuation writedown of £625 million.
This significant hit in the value of its property portfolio reflected market conditions and changes in investor sentiment, as well as losses on disposals and increased financing costs.
Sainsbury's shares kept flat despite penning a five-year deal with Microsoft to incorporate artificial intelligence (AI) into its supermarkets.
Generative AI will be used to make the supermarket’s website more interactive, including through improved search capabilities, the supermarket noted.
Looking forward to next week, investors can prepare from results from Aviva, Royal Mail, Nvidia and more, as well as inflation data for April.
15.43pm: Bitcoin lifts higher following strong week
Bitcoin (BTC) is up around 1.5% on Friday cancelling out the 1.5% drop suffered on Thursday.
However, neither day's movement has been nearly enough to offset the remarkably strong performance on Wednesday when the world’s largest cryptocurrency penned its strongest green candlestick in nearly two months.
Week on week, the BTC/USD pair is up 5% to $66,314.
Neil Roarty, analyst at investment platform Stocklytics, said bitcoin’s strong performance this week is “most likely linked to the growing consensus that much-anticipated interest rate cuts are finally around the corner”.
According to Roarty: “With central bankers worldwide seemingly in agreement that it’s time to slash interest rates, Bitcoin suddenly looks like a more appealing investment - particularly for those willing to take on some risk in search of a higher return.”
15.25pm: Silver prices hit decade high
Silver prices have rallied to a ten-year high, with the spot price breaching US$30 an ounce for the first time since 2013.
It comes as the precious metal rallied 28% in the year-to-date.
Silver's performance is currently less influenced by its traditional driver of manufacturing activity, which remains sluggish, Deutsche Bank noted.
According to Deutsche's analysis, manufacturing tends to be a weaker driver for silver prices outside of recession periods and early recovery phases, suggesting that investors might see more influence from macroeconomic factors and gold price movements in the near term.
Gold prices have also experienced a strong 2024, rallying 16%.
14.56pm: Gas and electricity bills to fall to lowest level in 2 years
Gas and electricity bills are set to drop to their lowest levels in over two years.
Energy costs are expected to drop by 7% in July, with the average household in Britain expected to see bills reach £1,574 a year, new data from Cornwall Insights found.
Should the forecasts be correct it means household bills would drop by £116 a year compared to the maximum of April's energy price cap.
It would mark the lowest level for gas and electricity prices since the price cap of £1,216 was introduced back in the winter of 2021/22 and represents a 25% drop in the last twelve months.
“Looking further ahead we forecast the cap will rise slightly in October before falling again in January 2025,” said Cornwall Insights.
Ofgem is scheduled to announce its quarterly price cap next week.
14.35pm: US opens flat
US stocks opened flat on Friday with video games and social media appearing to be today's focus for the markets.
The Dow Jones opened at around 39,907, while the S&P 500 was at 5,303.
Meanwhile, the tech-heavy Nasdaq lifted 12 points higher to 16,711.
One stock making moves was Take-Two Interactive, the gaming company which owns Rockstar and 2K, as it opened around 3.5% higher after GTA 6 was given a release date.
The Rockstar Games owner announced that the latest instalment in the series would be released in the fall of 2025 alongside results on Thursday.
Reddit (NYSE:RDDT) shares jumped 15% after it announced a new partnership with ChatGPT creator OpenAI.
Content from the Reddit (NYSE:RDDT) platform is expected to be taken in by OpenAI’s ChatGPT system and other products, meanwhile, OpenAI will also become a Reddit (NYSE:RDDT) advertising partner.
OpenAI will access Reddit (NYSE:RDDT)’s data API to obtain real-time, structured, and unique content from the social media platform, the social media group said.
14.22pm: Gamestop crashes down to reality following results
Gamestop shares have sunk 20% in premarket trading as the memestock was hit by a douse of reality in the form of its first quarter results.
Shares in the video game retailer stormed 271% higher on Monday and Tuesday following the return of Roaring Kitty, the online financial analyst famed for his involvement in the first round of the Gamestop saga.
However, they crashed 57% in the following two days and Friday's results have helped this trend continue.
Sales in the first quarter dipped to between US$872 million and US$892 million, representing a sharp decline compared to last year's US$1.2 billion.
Giacomo Pierantoni, head of data at Vanda Research, said: “It appears to me that the mini bubble is collapsing.”
Shares are set to open on Friday at US$21.70, up on the US$17.21 it started the week at.
13.35pm: US stocks flat in premarket trading
Wall Street is set to open flat on Friday, closing out a week which saw both the Nasdaq and S&P 500 hit record highs, as well as the Dow Jones break through the 40,000 mark.
Dow Jones futures are trading around 22 points higher, implying an open of around 39,998, while the S&P 500 and Nasdaq are expected to open at 5,319 and 18,644, respectively.
Todd Morgan, chairman at Bel Air Investment Advisors, said: "The Dow’s remarkable rise has exceeded many expectations, including my own, but our perspective remains unchanged
"Through wars, recessions, elections, impeachments, financial crises and on and on, investing for the long term in high-quality stocks is the key to building wealth.”
David Morrison, senior market analyst at Trade Nation, added: "Investors have been keen to jump on positive news while ignoring anything that could upset the bullish narrative.
"This week’s PPI and CPI data wasn’t great. But the fact that CPI matched expectations with a modest year-on-year dip from the prior month was enough to keep the rally going."
13.16pm: Tesla wins bid to extend Berlin gigafactory
Tesla has won its bid to extend its Berlin factory into a nearby forest despite receiving heavy pushback from environmental activists.
Local councillors in Gruenheide voted in favour for the extension of the gigafactory, German reports revealed.
Activists have been protesting the pans since February over fears the construction could affect water supplies and cause deforestation.
Last week, hundreds of activists were seen storming the site after the police were unable to keep them at bay.
In March, protestors launched an arson attack which cut power off for the facility and caused production to be suspended. It also left hospitals and homes without electricity.
Despite the decision, a court has ruled that the police are not allowed to demolish any treehouses that activists have built in the trees near the site.
Tesla plans to open a freight depot and add logistical space with the extension but had to compromise on felling fewer trees to get it approved.
12.48pm: King Charles worth less than prime minister, claims Times Rich List
King Charles's wealth has ranked at £610 million, meaning Prime Minister Rishi Sunak is richer than him, according to the Times Rich List 2024.
With an expansive property portfolio, the newly-crowned King owns estates such as Sandringham and Balmoral Castle.
When Queen Elizabeth II passed away last May, Charles inherited all of his mother's wealth as well as around £120 million in investments.
Yet, the true wealth of the King remains shrouded in mystery, with the exact figure from his mother's will kept private.
What the public does know is that he now owns the Duchy of Lancaster, the property portfolio which spans around 44,700 acres of land, and the Crown Estate, which covers real estate, land, marine and the Windsor Estate.
Added with the Crown Jewels, which could be worth anywhere between £3 billion and £5 billion, and there is a strong case King Charles should rank higher on this list.
12.23pm: Flutter sales dented by March Madness, says broker
Sky Bet owner Flutter has undergone a mixed week following the release of its first-quarter results on Tuesday.
Shares initially tumbled 3% after it reported net losses widening to $177 million from $111 million and a 16% revenue lift.
Analysts at Deutsche Bank have been slightly more focused on its operations in the US however, with the company readying to move its primary listing over there in the coming months.
Deutsche Bank said: :The US gave, and then it took away. After reporting spectacular 56% revenue growth for the first 11 weeks of Q1, US revenues fell 51% in the last 2 weeks of the quarter."
It explained that March Madness, the annual tournament to decide the college basketball national champions, was partly to blame for the drop.
Winners UConn were keen favourites to win this year's championship, and along with other "customer-friendly US sports results" it led to Flutter suffering a US$76 million dent to its revenues.
"It took a further hit from start-up losses in North Carolina, where it launched on March 11th," analysts added.
Over the last few days, shares in the betting firm have recovered finding themselves at a higher level than before the results.
Today, they slipped 2%.
12.00pm: Eurozone inflation holds at 2.4% in April
Inflation in the Eurozone kept steady in April, holding at 2.4% despite an uptick in Germany, official figures revealed.
Consumer price inflation remained at the same level as in March, despite the figure in Germany, the region's largest economy, lifting from 2.3% to 2.4% month-on-month.
Money markets are now 96% certain the European Central Bank will vote to cut rates from record highs of 4% when it meets in June, beating both the UK and US in the race to slash.
Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics said: "Looking ahead, the bump in energy inflation to +5% between May and July has now virtually disappeared in our forecasts.
"This makes us a a bit more confident keeping a second July 25bp rate cut in our forecast, assuming the ECB cuts by 25bp in June as widely expected."
Euro area annual #inflation stable at 2.4% in April 2024 https://t.co/BeRxtE27UD pic.twitter.com/nNw7vNY19z
— EU_Eurostat (@EU_Eurostat) May 17, 2024
11.43am: Sunak Britain's richest PM as his wealth continues to grow
Rishi Sunak has ranked in Britain's top 250 richest people, making him the wealthiest prime minister to step foot in 10 Downing Street.
Sunak and his wife Akshata Murty ranked 245th in the Times Rich List 2024, boasting a total wealth of £651 million.
Much of the couple's fortune stems from Murty's stake in her father's Bangalore-based IT firm Infosys (NASDAQ:INFY).
Throughout the last twelve months, their stake in the company has risen by close to £109 million to £590 million, with Murty's earnings smashing that of her husband.
Nevertheless, Sunak still made £2.2 million in 2022/23, making him one of the best-paid PMs, with only 6.5% of his earnings coming from his ministerial wages.
Other income streams including an investment portfolio helped Sunak achieve a salary 60 times that of the average Brit.
11.18am: Royal Mail takeover to face national security checks, says Hunt
Royal Mail's takeover will be analysed from a national security standpoint should shareholders accept the offer, chancellor Jeremy Hunt said.
Czech billionaire Daniel Kretinsky is closing in on acquiring the postal service's parent company for £3.5 billion after his improved offer was met favourably by management.
"We welcome international investment in British companies... one of the reasons that we have attracted more foreign direct investment than anywhere else in the world than the United States and China is because of our openness to companies from overseas," Hunt said.
He added that it was not only the cash being brought into the UK that was welcomed but also the "expertise and funding".
"We will continue with that approach," he added.
"But we do always look at national security considerations and make sure that in terms of our core infrastructure there are no risks to those going forward and any bid for Royal Mail would go through that normal process."
10.54am: Insolvencies surge by fifth as interest rates bite
Despite the growing optimism surrounding the economy as the UK nears its first interest rate cut in around four years, it hasn't been plain sailing for everyone.
In April some 2,177 companies declared insolvency, marking an 18% jump compared to the 1,838 in March, highlighting the effect of interest rates being held at a 16-year-high.
David Hudson, restructuring advisory partner at FRP, said: "Last week’s GDP figures suggests that the UK economy is finally emerging from its lengthy post-Covid hangover.
"But while there is optimism this growth can be sustained, the coming months will continue to be turbulent with more businesses faltering as they weather the legacy of high interest rates, input costs and wage growth.
"Indeed, while we anticipate monthly fluctuations as insolvency levels settle, our own data suggests the profile of firms going into administration is increasingly that of larger employers which will ultimately have a more pronounced effect on supply chains and the labour market."
10.18am: FTSE 100 trades lower
The FTSE 100 is trading lower on Friday, continuing on from yesterday's drop, which saw the end of a nine-day winning streak.
Annual losses led by valuation writedowns at Land Securities pushed the group's share more than 2% lower, while easyJet continued to shed value following the announcement that its chief executive of seven years will leave next year.
Other fallers included Auto Trader, Ashtead and Spirax-Sarco Engineering (LSE:SPX).
Only Rio Tinto and United Utilities were able to rise above 1%.
9.56am: GTA 6 to release in Autumn 2025; Take-Two shares slip
Take-Two Interactive, the video game company which owns Rockstar and 2K, is trading close to 3% lower in the US premarket after it revealed the long-awaited Grand Theft Auto 6 would not be released until Autumn 2025.
The announcement helped quell concerns that the action-adventure game would be delayed until 2026.
GTA 6 will officially release in Fall 2025. pic.twitter.com/gpTF4R3XdA
— DiscussingFilm (@DiscussingFilm) May 16, 2024
Rockstar Games shattered YouTube's record for the most viewed video within 24 hours after it racked up close to 90.5 million watches.
GTA V, the predecessor to the latest instalment, has sold 200 million copies since being released in 2013, Take-Two said in the results.
A US$2.9 billion loss was also revealed for the company’s fourth quarter, reflecting acquisition-related impairments and a 3% fall in revenue to US$1.4 billion.
9.31am: Tyson Fury to earn close to Ronaldo salary from Usyk fight
Tyson Fury is set to receive close to what Cristiano Ronaldo earned for his entire ten-month season at Al Nassr when the boxer takes on Oleksandr Usyk for the undisputed heavyweight title on Saturday.
According to research from talkSPORT BET, Fury will take home 70% of tomorrow's fight purse, adding up to around US$145 million, only slightly lower than the US$166 million Ronaldo recieved for heading to the Saudi Pro League.
The Gypsy King's purse from the fight is believed to be more than the combined season earnings of F1 star Max Verstappen, the NBA's Steph Curry, golfer Viktor Hovland and Superbowl winner Patrick Mahomes.
In comparison to Fury, Jones Jones, who is the heavyweight champion in the mixed martial arts organisation UFC, recieved US$6.4 million for his title fight with Cyril Gane in March 2023.
Source: talkSPORT BET
Ryon Scott-Douglas, spokesperson of talkSPORT BET, said: “The astronomical sum Tyson Fury is set to earn from Saturday’s fight with Oleksandr Usyk shows the huge power of Saudi Arabian investment in sport.
“Max Verstappen may well be the biggest earner in Formula 1 and Viktor Hovland and Novak Djokovic both had hugely successful years in 2023 but they can’t compete with the pull of Saudi riches for the biggest boxing fights.”
9.08am: China enacts plan to save battered housing market
China is hoping to save its suffering real estate industry after it launched new measures to help combat the plummeting in house prices.
Chinese regulators and its central bank will greenlight local governments to buy apartments, ease mortgage requirements and promise to complete unfinished properties.
It comes after Chinese house prices sunk to a nine-year low, with the reverberations of the weaker industry, which at one point accounted for a fifth of the country's economic activity, being felt across the nation.
Some 20 million homes are believed to have been left abandoned or unfinished because of the housing market downturn, denting consumer confidence and reducing overall spending.
In April, retail sales grew by 2.3%, marking the weakest increase since December 2022 and falling from 3.1% in March.
8.48am: The morning so far
The London stock market entered Friday relatively unbudged from yesterday’s closing price, with the FTSE 100 index currently trading 13 points lower at 8,425.
Landsec was among the biggest fallers in opening exchanges following publication of its annual results.
The Central London-focused real estate group’s annual earnings from rental income stood at £371 million, a decrease from £393 million in 2023, while losses before tax of £341 million due to a valuation deficit of £625 million. Shares fell 1.7%.
Elsewhere in company news, GSK PLC (LSE:GSK, NYSE:GSK) sold 385.32 million ordinary Haleon shares at 324p per share, raising approximately £1.25 billion.
With this sale, GSK has fully exited its stake in the Sensodyne and Panadol maker and no longer holds any ordinary shares in Haleon. GSK was down 0.8% and Haleon was down 0.5%.
J Sainsbury PLC (LSE:SBRY) announced a five-year deal with Microsoft Corp (NASDAQ:MSFT) to incorporate artificial intelligence (AI) into its supermarkets. The supermarket’s shares added 0.6%.
BT Group PLC (LSE:BT.A) was the morning’s biggest riser, adding over 1.5% to continue its rally following yesterday’s results and dividend hike.
Vodafone, Rio Tinto, Severn Trent, United Utilities and Sage Group were also among the top risers in the first 45 minutes of trading.
8.27am: Stocks slightly lower
The FTSE 100 opened eight points lower to 8,431 on Friday, with Landsec among the biggest fallers following its annual results. Auto Trader, Flutter, Ashtead Group and Rightmove were also down.
Top risers in opening exchanges included BT Group, Rio Tinto, Vodafone and Severn Trent.
8.09am: Sainsbury's and Microsoft in AI partnership
J Sainsbury PLC (LSE:SBRY) has penned a five-year deal with Microsoft Corp (NASDAQ:MSFT) to incorporate artificial intelligence (AI) into its supermarkets.
This will aim to improve store operations, aid staff to work more efficiently and create a more effective service, Sainsbury’s said on Friday.
“Our collaboration with Microsoft will accelerate our ambition to become the UK’s leading AI-enabled grocer,” Sainsbury’s chief technology officer, Clodagh Moriarty, commented.
Generative AI will be used to make the supermarket’s website more interactive, including through improved search capabilities, the supermarket noted.
Staff will also be provided with real-time data to help with restocking and customer queries.
Sainsbury’s shares added 0.8% in opening exchanges.
8am: More workers returning to office, Landsec results suggest
Central London-based real estate group Landsec today disclosed that unique daily entries across its portfolio were up by 18% compared to the previous year.
This suggests a steady trend of workers returning to the office following years of post-Covid remote/hybrid working.
According to the results, Central London offices saw an occupancy increase of 140 basis points to 97.3%.
It had a positive impact on Lansec’s leasing activity, though as reported below, property devaluations meant Landsec still posted a loss before tax.
7.40am: Landsec incurs losses from write down in property values
Central London-focused real estate group Land Securities Group PLC (LSE:LAND)’s annual earnings from rental income stood at £371 million, a decrease from £393 million in 2023, while earnings per share (EPS) remained stable at 50.1 pence.
Despite these earnings, Landsec reported a loss before tax of £341 million due to a valuation deficit of £625 million.
This significant write-down in the value of its property portfolio reflected market conditions and changes in investor sentiment, as well as losses on disposals and increased financing costs.
Net debt increased slightly to £3.5 billion and the Group loan-to-value (LTV) ratio rose to 35%. However, the company maintained a strong balance sheet with a long average debt maturity of 9.5 years and substantial cash and undrawn facilities amounting to £1.9 billion.
Looking ahead, Landsec anticipates a positive outlook for return on equity as property values begin to stabilise.
The company expects further growth in ERVs by a low to mid-single-digit percentage in Central London and major retail assets.
EPS for financial 2025 is projected to be slightly below the 50.1p recorded this year.
7.19am: GSK completes Haleon sale
GSK PLC (LSE:GSK, NYSE:GSK) has announced the sale of 385.32 million ordinary shares in Haleon PLC (LSE:HLN, NYSE:HLN) at 324p per share, raising approximately £1.25 billion.
With this sale, GSK has fully exited its stake in the Sensodyne and Panadol maker and no longer holds any ordinary shares in Haleon.
Haleon was established in 2022 as a corporate spin-off from GSK.
Following the demerger and premium listing of Haleon on 18 July 2022, GSK initially retained a 12.94% stake.
Through numerous disposals since (including today’s), GSK has rained approximately £3.9 billion.
7.10am: Futures point to blue-chip losses
The FTSE 100 is expected to open nine points lower at 8,422 this Friday after closing a few points lower yesterday.
Sage Group and easyJet were among the biggest fallers, along with a horde of companies going ex-dividend.
Today, eyes are trained on Land Securities Group PLC (LSE:LAND)’s finals, with its disposals programme front and centre of investors’ minds.
There is little of note on the macroeconomic calendar, barring the latest inflation print and CPI data from the eurozone.
Across the Atlantic, the Dow Jones is bracing for a momentous session as it attempts to reclaim 40,000 after briefly touching the record level on Thursday.