- FTSE 100 down 62 points at 8255
- Shop price inflation 'back to normal' says BRC
- Intermediate Capital hits all time high on results
4.03pm: Boohoo backs down
Boohoo Group PLC (AIM:BOO) has backed down over its bonus plan after shareholders objected.
The online clothing retailer has withdrawn the proposal from its annual meeting schedule, after investors did reacted with surprise after the remuneration committee decided to ignore its own rules and offer £1 million bonuses to its CEO and two founders despite them missing their targets and and overseeing a fall in sales and a £160 million loss.
Boohoo says its has "engaged with certain shareholders" regarding the proposed pay deals and has now "decided not to implement the incentive plan at this time".
It said it will "consider further engagement with shareholders on this matter in the future."
4pm: Markets affected by low volatility
The reason for the softer markets today is "a light economic calendar and lack of triggers after a prolonged weekend in the US and UK", says Axel Rudolph, market analyst at IG, leading to "low volatility trading".
Rudolph also points to hawkish comments by Minneapolis Fed pPresident Neel Kashkari, who said that the US central bank wants to see "many months" of slowing inflation before deciding to cut rates.
The oil price has also continued to rise today, with Brent futures up 0.8% to $83.79.
"The price of oil regained more of last week's losses due to expectations that OPEC+ will extend voluntary output cuts of 2.2 million barrels per day into the second half of the year at its meeting on June 2," says Rudolph.
He also notes that gold and silver prices also are in "slightly positive territory" for the day.
3.50pm: FTSE reshuffle effects
Ocado Group PLC (LSE:OCDO) shares are up more than 8% and up by 14% in the last 5 days - is it a concerted effort from traders who seem to love to buy and sell this rare example of a UK blue chip, to save it from relegation from the FTSE 100?
It "may not be enough to save the stock from demotion", says market analyst Kathleen Brooks at XTB, ahead of index organisers FTSE Russell carrying out their quarterly reshuffle.
St James’ Place, the wealth management company hit by a wave of complaints, are both expected to be demoted to the mid-cap ranks, even though SJP has seen its share price rise by 13% in the past month.
Helped by bid interest, Hargreaves Lansdown PLC (LSE:HL.), which fell back into the FTSE 250 last year, is due to bounce back, while housebuilder Vistry Group PLC, the former Bovis, will be promoted, though its shares are down 4.5% today.
Flutter, which recently dual-listed its shares in the US will also drop out soon, which will also likey drop out soon, with Endeavour Mining PLC, Darktrace PLC (LSE:DARK) and LondonMetric Property PLC (LSE:LMP) favourites to take its place.
"The rebalancing usually has a mild impact on stock prices. The fact that Ocado and SJP have rallied into their demotions is interesting, and if they continue to recover then they may not be in the FTSE 250 for long," says Brooks.
3.46pm: Footsie keeps dropping
Heading towards the close in London and the FTSE 100 is falling ever lower, down 0.9%.
Many of the top 15 are down more than 1%, with some like AstraZeneca, RELX, Diageo and Compass down at least 2%.
The mid-caps of the FTSE 250 index are now down as much, down 0.34% to 20,701.
3.42pm: Couple of crypto things
First is our daily crypto report, which has a bit more of the reasoning why bitcoin (BTC) and ethereum are moving this week.
BTC briefly tipped across the $70,000 price point yesterday following a week of mediocre performance for the world’s largest cryptocurrency, today has seen a rather sharp reversal with the BTC/USD pair dropping 1.7% to trade at $68,193 at the time of writing.
Analysts have pointed to a large-scale bitcoin transfer, estimated at $7 billion, from wallets owned by Mt Gox, the cryptocurrency exchange that collapsed a decade ago.
Elsewhere, Riot Platforms, one of the most highly valued bitcoin miners globally, has gone public and hostile with a $2.30 per share offer for smaller rival Bitfarms (TSX-V:BITF).
According to Riot’s press statement, the Bitfarms (TSX-V:BITF) board rejected the April offer “without engaging in substantive dialogue with Riot” and has some charged language, highlighting allegations etc... read more on the Riot-Bitfarms battle here.
3.20pm: Bookmakers lead fallers
Flutter Entertainment PLC (LSE:FLTR), Draftkings Inc (NASDAQ:DKNG) and Entain PLC (LSE:ENT) fell after a bill passed in Illinois to impose a new tax on sports betting revenue.
Senators approved the progressive tax, which starts at 20% for adjusted gross receipts of up to $30 million and caps out at 40% for AGR above $200 million, as part of the state’s 2025 budget.
Flutter, which is in the process of dropping its London primary listing, and therefore also its FTSE 100 status, is leading the fallers today, down 6.3%, while Ladbrokes, which is a 50% owner of BetMGM, is down 2.5%.
US-listed DraftKings plunged 10.4%, with trade websites calculating it would have to pay a 20% tax on its $7 million retail AGR and 40% on its digital AGR, which was $350 million.
3.12pm: US confidence improves
US consumer confidence data has been printed for May, coming in higher than expected.
The confidence index rose to 102.0 from a revised 97.5 the month before, better than the 96.0 consensus estimate.
Confidence about the present situation rose to 143.1 from 140.6, while expectations improved to 74.6 from 68.8.
Wall Street indices fell in advance of the release but are rising again after.
2.55pm: US stocks open mixed
Wall Street stocks have mostly opened higher, though the Dow Jones is down 0.25% as health stocks weigh.
The Nasdaq Composite is up 0.2%, led by a near-5% Nvidia rise for Nvidia, while the S&P 500 is flat, having traded higher initially.
Apple, Alphabet and ASML are in the green, but they are the only ones in the Nasdaq's top 15.
1.31pm: Election influence for markets?
Last week's general election news is not likely to impact monetary policy but investor confidence could be influenced by changes in opinion polls, says UBS.
Markets have been pretty indifferent to the PM's rain-sodden announcement, but this is not expected continue up to polling day.
"There are certainly a few things that could get investors excited," says UBS economist Dean Turner. "The first of these will be the opinion polls.
"History tells us that opinions can, and often do, change quite quickly during an election campaign," he says, noting Theresa May's 2017 campaign when a 15% lead for the Conservatives all but evaporated by election day.
"If Labour’s lead in opinion polls, hovering around 20%, starts to erode, investors may start to question their current confidence in the result."
The other interesting development to watch is when the party manifestos are published, though we have a fair idea already, on economic matters.
There will not be much to separate the two main parties, the UBS economist says, with both likely to commit to sticking to the existing fiscal rules, which leaves neither of them with much room for manoeuvre and little impact on a macro perspective, he says, though there is always the potential for surprise.
"So, we should expect a lot of headlines and a few surprises over the next few weeks, but when it comes to investing in the UK markets, we still think investors should stick to fundamentals," Turner says, with the UK market rated as 'most preferred' for UBS.
"We... stick with this view as FTSE 100 companies, which generate a significant portion of their revenues internationally, should be largely sheltered from domestic political events.
"For bonds, rate cuts from the Bank of England should lead to falling yields, which is positive for bond prices."
1.22pm: Pension promise
More electioneering, this time a new higher 'triple lock' for pensions.
Prime Minister Rishi Sunak promised today that pensioners will never pay tax on their state pension under his government if it wins the next election.
Building on the "triple lock" introduced by David Cameron, Sunak said if he is returned to power he will also make sure the personal allowance for pensioners would increase by at least 2.5% or in line with the higher of earnings or inflation.
Labour’s shadow chancellor Rachel Reeves, who earlier revealed that more than a hundred leaders of large and small businesses have declared their support of the party's economic plans, called the scheme a "desperate gimmick".
Read more: Tories or Labour - who's best for markets?
1.05pm: Europe in the red, US hard to read
Like the FTSE 100, the major European indices are all in the red too, having mostly started higher. Germany's Dax is just below the flatline, while France's CAC is the worst position, down 0.6%.
Looking across the Atlantic, US markets are heading for a mixed start as they reopen after the Memorial Day holiday.
Tech stocks seem to be expected to drive the rise, with Nasdaq 100 futures pointing to a 0.2% gain, with S&P 500 futures up 0.1%, while Dow Jones futures are down 0.1%.
In the energy markets, WTI crude prices have steadied after rebounding sharply yesterday from more than three-month lows ahead of the online OPEC+ meeting next weekend.
In US data, consumer confidence numbers are due today, the Federal Reserve's Beige Book tomorrow, followed by the second reading of GDP and the trade balance on Thursday with the Chicago PMI alongside the PCE inflation reading that is seen as a key reading for the Fed as policymakers' preferred inflation measure.
"All roads this week point towards the April US core PCE print on Friday," says Deutsche Bank's Jim Reid. "You don't need me to tell you how well scrutinised this data will be and how important it is to the Fed."
Versus the previous month, PCE inflation is expected to edge down from 0.32% to 0.26%.
Trading volumes have been light for stock index futures markets, says market analyst David Morrison at Trade Nation.
"Stock indices are a touch firmer this morning, but it’s difficult to gauge investor sentiment. We’ll probably need to wait until volumes pick up later this afternoon."
12.44pm: EU hydrogen funding
The European Commission has approved €1.4 billion of hydrogen funding for 13 projects and 11 companies, including Airbus, BMW and Michelin.
The Hy2Move programmes aim to develop technologies and processes "that go beyond current technology and will allow major improvements notably in the areas of mobility and transport applications, fuel cells, on-board hydrogen storage and generation of hydrogen for the use in mobility and transport".
It is designed to help the EU reach its target of reducing transport emissions by 90%.
The hydrogen funding is also accompanied by a separate €1 billion healthcare project to help the discovery of drugs to treat rare diseases and cancers, which the EU estimates will unlock an extra €5.9 billion in private funding.
12.25pm: Retail sector remains cautious
We have the second retail sector update of the day, this time from CBI.
Like the BRC survey said earlier, selling price inflation in the retail sector eased considerably in May, the CBI report says, adding that retail sales grew at their fastest pace since December 2022 in the year to May.
The CBI distributive trades survey found that retailers expect sales to fall slightly next month, but to remain broadly in line with seasonal norms.
Conditions elsewhere in the sector also appear to be more mixed, with headcount continuing to fall and investment plans weakening further.
"May’s increase in retail sales adds to the swathe of data pointing to an improvement in activity over the near-term," said Alpesh Paleja, CBI lead economist.
"Falling inflation, and continuing real wage growth will contribute to a healthier consumer outlook, in turn supporting the retail sector further.
“That being said, retailers are restrained about their business situation over the coming quarter. Headlines sales are expected to fall moderately next month, and it’s concerning that retailers’ investment intentions have deteriorated noticeably."
12.03pm: Meme update
Shares in GameStop Corp (NYSE:GME) are up 23% in premarket after the retailer raised new funds.
The king of meme stocks said it had raised over $900 million from selling shares during the rally earlier this month.
11.49am: City broker's overseas offices closing
The value of City broker Numis has been halved since being bought by Deutsche Bank, according to a Telegraph report.
Having bought the UK company for £410 million in April 2023, since renaming it Deutsche Numis, the German bank wrote down the value of the subsidiary by €233 million (£200 million).
Deutsche is closing the UK and European offices of Numis and merging them into its own buildings, with UK staff also moved into its new London office.
11.38am: FTSE slips lower
The FTSE 100 has dropped below the 8300 mark that it first broke through almost a month ago, well the 5th of May.
Many of the index's largest companies are dragging, including AstraZeneca down 0.9%, HSBC, Diageo and Compass all down more than 1%.
Only three of the top 15 are in green.
11.23am: Economy the focus of the election
PM Rishi Sunak is on a campaign visit in Stoke-on-Trent today.
Sunak says: "The only certainty you're going to get with a Labour Party is that they are going to run out of money and put up your taxes."
Labour's shadow chancellor Rachel Reeves, speaking at a Rolls-Royce Holdings PLC (LSE:RR.) factory, says taxes are at a 70-year high and says there are not additional tax rises needed under Labour’s plans beyond those already set out.
As party leader Kier Starmer has set out, the top of Labour's 'first six steps for change' is to deliver economic stability with tough spending rules, to grow the economy and keep taxes, inflation and mortgages as low as possible.
Reeves says watchwords if the election is won will be "stability, investment, reform".
The full speech text is here.
11.11am: No Budget til September if Labour wins
If Labour wins the general election in July there earliest a budget would be held is late September, says Rachel Reeves, Labour's Shadow Chancellor, who is giving a speech right now.
She says this would be to allow the Office for Budget Responsibility (OBR) 10 weeks to weigh up her plans.
Reeves said earlier that the PM has called an early election is that the government's running of the economy is not working, noting that taxes have reached a 70-year high, national debt has more than doubled, and mortgages have gone up as a result of Liz Truss’s mini-budget.
If the UK economy had grown at the rate of the OECD average over the past 14 years, it would be £150bn larger, she says.
11.03am: Some market analyst thoughts
Let's catch up with some market analysts and see what their thoughts are on this morning's news.
Dan Coatsworth at AJ Bell notes some "strength in the aviation, mining, energy and insurance sectors" that helped give the index its initial lift, and says Asian markets are looking "resilient".
"Later this week a second estimate of US GDP for the first quarter, the core PCE reading of inflation which the Federal Reserve likes to pore over when making decisions on rates, and Chinese manufacturing figures are likely to dominate the market’s agenda," he adds.
Guy Lawson-Johns at Hargreaves Lansdown has more, noting some of the initial policy proposals emerging as the UK general election campaign gets underway.
"Last week’s election announcement is causing some short-term volatility in the markets, but longer-term investors can usually take this as background noise," he says.
This includes Rishi Sunak betting on a £2.4 billion tax break to win the support of pensioners and last week's National Service pitch another defensive strategy to shore up core Tory voters, while shadow chancellor Rachel Reeves, ahead of a speech today, has sought to burnish her business credentials with a letter signed by 150 business people supporting Labour’ approach to the economy, including bosses and ex-bosses from WPP, Iceland, JP Morgan, Tesco Bank and Heathrow.
He also flags that the put-up-or-shut-up deadlines of the bids for Royal Mail owner IDS and Anglo American come on Wednesday.
Looking at commodities, Brent crude is up 0.25% at $83.31, continued its rebound from near four-month lows.
"This comes amid expectations that OPEC+ will extend voluntary output cuts at its next meeting on 2 June. On the demand side, markets are also awaiting key US inflation data this week to gauge the direction of Federal Reserve monetary policy," Lawson-Johns says.
10.52am: ECB cut 'done deal'
Overnight, senior officials from the European Central Bank sent clear signal that interest rates will be cut from their record highs next week.
Chief economist Philip Lane said in a speech: "At our June meeting, if our updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission were to further increase our confidence that inflation is converging to our target in a sustained manner, it would be appropriate to reduce the current level of monetary policy restriction."
French central bank chief Francois Villeroy de Galhau, who with Lane is also one of the 26 members of the ECB’s governing council, said: "Barring a surprise, the first rate cut in June is a done deal."
As for further cuts in July and beyond he added, "let us keep our freedom on the timing and pace".
10.42am: NatWest update
And now NatWest says its digital banking services are back up.
They “should now be working as expected” now, the lender's customer service team said, telling complaining customers on social media to “try logging in as normal”.
However, NatWest’s service updates page still says its mobile app is suffering from a "service disruption", with some customers still not able to view their credit card information. "We're working hard to fix this, sorry if it’s causing you any issues," it says on the page.
The mobile app and online banking service should now be working as expected. Please try logging in as normal. Thank you for your patience and apologies for any inconvenience caused. If you have any other questions or need any further support then please let me know. ????~ Margaret
— NatWest (@NatWest_Help) May 28, 2024
10.22am: NatWest app crash
An outage of the NatWest Group PLC (LSE:NWG) online banking app seems to be making news this morning.
It has been down since around 5:40 am, according to Downdetector, hitting thousands of users who have reported various error messages when attempting to log in.
NatWest reassured customers that they can still use their cards to make payments and withdraw cash from ATMs, branches, and the Post Office, and it is "working hard getting everything back up and running".
10.14am: ICG results look good but broker has a "but"
Intermediate Capital Group (LSE:ICP) is near the top of the FTSE 100 leaderboard as its shares have risen 5.5% to new-all time highs on the back of its results, where the investment firm reported a bigger profit than expected and said it is benefiting from the current market.
Analyst Rae Maile at broker Panmure Gordon said the new medium-term target for fund-raising averages at least $13.8 billion per year and consensus assumes $12.4 billion and $14.1 billion for the current and next year.
"So far, so very good", said Maile. "The risk is that expectations have increased with the share price, as they have always tended to do."
Consensus forecasts assume the operating margin for the fund management company (FMC) over 56% but guidance is “in excess of 52%”, notes Maile, adding that the dividend was "increased by just 2%".
A year ago, a reasonable p/e on the FMC delivered the balance sheet “for free”.
"Now the share price discounts 14x for the FMC and the balance sheet at book value. That is still fine, the FMC deserves a premium and book value undervalues the balance sheet, but further growth and re-rating is now a requirement rather than a free ride," the analyst concludes.
9.51am: Death of a CEO
Sad news from US operating oil developer TomCo Energy, which has announced the sudden death of John Potter, its CEO, at the age of 54.
He passed away suddenly on Friday, according to the company, which he had led for six years.
TomCo said non-execs Malcolm Groat, Louis Castro and Zac Phillips, will take interim responsibility for operations.
Chairman Groat said: "All of us in and around TomCo, all who knew John, are deeply shocked and saddened by his sudden death. His hard work, dedication and good humour will be sorely missed. Our job, collectively, is to fulfil John's plans for TomCo."
9.44am: Water companies leaking
Reports that the regulator will refuse water companies' requests for big customer bill hikes is hitting shares in United Utilities Group PLC (LSE:UU.), Severn Trent PLC (LSE:SVT) and Pennon Group PLC (LSE:PNN, OTC:PEGRY), which owns South West Water and Bristol Water.
Some water companies have applied to raise consumer bills over 90% and others between 60% and 30% as they look to invest in improvements to the network while also keeping up dividends for their shareholders.
Watchdog Ofwat is poised to turn down these pricing proposals, the Guardian is reporting, with some water companies getting half of what they requested.
The draft determination from Ofwat is due on 11 July, which will decide pricing and investment levels for the next five years.
8.56am: AstraZeneca drug update drags
The FTSE 100 is now sliding lower, with the post-long weekend good mood seeming to be fleeting.
There seem to be slightly more stocks in green (55) than red (45), with one flat, but most of the larger names are lower, with only four of the top 15 in green.
A notable faller is one of the largest, AstraZeneca down 1.6%.
An announcement from the drug giant this morning revealed that survival rates from datopotamab deruxtecan (Dato-DXd), which it is developing with Daiichi Sankyo, were "numerically favoured... but did not reach statistical significance".
Housebuilder Persimmon is down, following weekend stories that it might bid £1 billion for smaller rival Cala Group, which current owner Legal & General is apparently looking to offload.
8.48am: Pay revolution?
Shareholder revolts against director pay and bonuses have quietened down, data from the Investment Association suggests.
The number of companies hit by major investor pushback on pay fell 80% during the AGM season, it found, with only five meetings so far this year seeing more than 20% of investors voting against remuneration plans.
These were Hunting, Pearson, STV Group, Clarkson and Synthomer (LSE:SYNT).
Investors disapproved of the pay deals at 25 companies over the same period in 2023, the IA noted.
8.27am: Footsie flip-flop
Now the Footsie is down into the red, a familiar place in recent days, down just three points though.
The FTSE 250 is higher, however, up 25 points at 20,795. Defence technology outfit QinetiQ Group PLC (LSE:QQ.) and transport company FirstGroup are top of the mid-cap list.
Great Portland Estates (LSE:GPOR) PLC is down 16% after putting out further details following its rights issue announced last week.
There's been some macroeconomic data this morning, from the British Retail Consortium, with further evidence of easing inflation.
The retail trade body found that shop price annual inflation softened to 0.6% in May, down from 0.8% in April and the lowest since November 2021.
Non-food moved further into deflation at 0.8%, from 0.6% deflation last month and the lowest since October 2021.
Food inflation slowed to 3.2% from 3.4%, with fresh food inflation reached its lowest since November 2021.
8.10am: FTSE 100 opens higher
The FTSE 100 has surprised by starting higher as London's blue-chip index looks to break its losing streak.
In initial trading, the benchmark gained 13 points to climb above 8330, up 0.15%.
Rolls-Royce Group PLC is top of the leaderboard, up 2.7%, followed by National Grid PLC and easyJet PLC.
Intermediate Capital Group (LSE:ICP) PLC is up 1.9% after publishing its final results and hiking its dividend for the 14th consecutive year.
8am: Genuit sales down but margins up
Another short update, but not quite as brief and slightly less positive, from pipe and aircon maker Genuit Group PLC (LSE:GEN), formerly known as Polypipe.
It says revenues were down 8.6% in the first four months of the year as the market so far this year has been a bit soft, though this has been in line with management expectations.
On the plus side, ahead of its annual shareholder meeting later today in Leeds, the company said its underlying operating profit margin continued to improve, so it is keeping full-year earnings expectations unchanged.
CEO Joe Vorih reckons Genuit is "in a strong position to benefit from the normalisation of volumes as markets recover".
7.53am: Softcat (LSE:SCT) purring
There are a few FTSE 350 results out this morning, including Softcat (LSE:SCT) PLC, which has helpfully provided an extremely short third-quarter update.
The IT infrastructure technology and services group said that market conditions and trading in the three months to 30 April were pretty much the same as they were in the first half, leading to further growth in gross invoiced income, gross profit and operating profit.
"The board continues to anticipate that full year gross profit and operating profit results will be in line with expectations," Softcat (LSE:SCT) confirmed in its three-line statement.
7.49am: Boohoo faces AGM pay revolt
Boohoo Group PLC (AIM:BOO) faces a shareholder revolt over its plans to reward bosses with sizeable bonuses despite the losses they made in the past year.
The clothing retailer reported a £160 million loss as sales fell 17% but its annual report showed that, even though the management team failed to meet financial targets, the remuneration committee decided to grant payouts anyway as the loss was “not an accurate reflection of the excellent work carried out”.
Several major shareholders are planning to vote against the proposed £1 million bonuses for co-founders Carol Kane and Mahmud Kamani as well as CEO John Lyttle at next month's annual general meeting, according to the Sunday Times.
7.29am: Revolution's rejection
M&A action it is indeed, with Revolution Bars Group PLC (AIM:RBG) confirming that it has rejected a proposal from Nightcap PLC (AIM:NGHT) as it is "incapable of being delivered".
While Revolution's management wants to raise £12.5 million to carry out a restructuring plan, legal advisers have suggested the Nightcap plans would throw a spanner in the works as funding would not be in place in time for the planned relaunch.
Nightcap's due diligence would also add more time, which Revolutuon says would add "material delivery risk" and possible require additional funding, further complicating the feasibility of the proposal.
Earlier this month, Revolution said its hunt for a potential rescuer had yielded 32 potential buyers, but management believes its proposed £12.5 million fundraising and restructuring plans are the only viable way forward.
"The board notes that, should the restructuring plan proceed and be sanctioned by the court, it would preserve value for the company's current shareholders by comparison to the offers received from the M&A process which provided no equity value, whilst acknowledging the dilutive effect of the Fundraising for those Shareholders who have not participated in its pro rata to their current shareholdings," Revolution said.
7.15am: FTSE losing streak to continue
The FTSE 100 is expected to continue its losing run for a fifth day on Tuesday, with the long weekend rest not expected to provide a boost.
Spread-betters are calling the index 12 points lower, having finished last week at 8317.59, losing 1.2% over the five days.
It was a public holiday in both the US and the UK yesterday, but Asian markets were generally positive.
This morning equities in Asia are looking subdued, with mixed moves either side of the flatline.
Today looks quiet day in terms of company news, but with M&A activity having been a driving force in recent weeks, there may be more action on that front this week too.