- FTSE 100 33 points higher at 8,257
- Cable at 12-month high
- Superdry exits London Stock Exchange
4.15pm: Market ends week on high note, your turn now England!
The FTSE 100 is poised to end the week on a high note, with the blue-chip index seen 33 points higher at 8,257 in end-of-day exchanges.
It marks an overall bullish week for the footsie, with it likely to end the five days around 50 points higher.
Top risers for the week included a smattering of utilities, housing and mining stocks.
Rightmove took gold with a 3.5% week-on-week gain.
Speaking of gold, Proactive will be cheering the Three Lions to victory against the Spaniards on Sunday. C'mon England!
4pm: US producer prices come in hot
US wholesale prices rose more than expected in June, in another blow to the market’s hopes of an interest rate cut from the Federal Reserve.
Producer prices climbed 2.6% year on year in June, exceeding the 2.3% forecast, marking an acceleration from an upwardly revised 2.4% gain in May.
It gives a mixed picture for the US economy- yesterday’s inflation print for June came in softer than anticipated, sparking hopes of a dovish turn on central bank policy.
US policymakers are struggling to get a grip on the US’s overheated economy, at a time when the Fed’s counterparts in Europe and the UK are warming up to the prospect of rate cuts.
The hot PPI result has done nothing to quell the markets this Friday though. Wall Street was up 240 points as last count, while the tech-focused Nasdaq flew more than a percentage point higher.
3.52pm: British Airways owner IAG falls following Lufthansa profit warning
Shares in British Airways owner International Consolidated Airlines Group SA (LSE:IAG) fell sharply following German counterpart Lufthansa Group’s profit warning earlier today.
The German flag carrier lowered its full-year guidance following a dramatic slide in quarterly earnings.
Lufthansa reported a preliminary Adjusted EBIT of €686 million in the second quarter, down sharply from €1.1 billion the previous year.
Fearing cross contamination with other major international carriers, the market swiftly bid IAG shares lower, bringing the stock nearly 3% down from yesterday’s close.
3.42pm: German carrier Lufthansa issues profit warning
Lufthansa Group has issued a profit warning, lowering its full-year guidance due to a significant slide in earnings.
The German international carrier reported a preliminary Adjusted EBIT of €686 million in the second quarter, down sharply from €1.1 billion the previous year.
This decrease was primarily driven by a market-related decline in yields across all traffic regions, particularly in Asia.
"Lufthansa Airlines is particularly affected by the challenges posed by the negative market trend and by inefficiencies in the flight operations of Lufthansa and Cityline, also due to delayed aircraft delivery," said the group.
For the full year 2024, Lufthansa now anticipates an Adjusted EBIT in the range of €1.4 billion to €1.8 billion, significantly lower than the previous forecast of around €2.2 billion.
"It is becoming increasingly challenging for Lufthansa Airlines to break even for the full year," the company noted.
Shares were down 0.6% following the announcement.
3.30pm: Unilever to slash thousands of jobs in Europe
Dual-listed FMCG giant Unilever plans to cut a third off its office-based workforce in Europe, according to a Financial Times report.
Up to 3,200 team members will lose their jobs under the reported restructuring, which forms part of what Unilever has dubbed a “productivity programme”.
FT reported that employees expressed outrage at the plans in a video call.
“I am honestly so disappointed if that is the view for employees — how is that acceptable?” said one.
“Complete failure to read the room and shows zero awareness of how people feel on the ground,” wrote another.
One year into his role, Unilever Hein Schumacher has been at pains to get the Unilever ship back on course following a period of stagnation.
As part of a turnaround plan, Unilever revealed a scooping out of its ice cream division in March.
“Ice cream has a very different operating model, and as a result the board has decided that the separation of ice cream best serves the future growth of both ice cream and Unilever,” the British multinational said at the time.
Also that month, Unilever announced plans to sack 7,500 team members across its global operations.
3.20pm: US stocks rally
The Dow Jones Industrial Index got off to a stellar start today, climbing over 150 points from yesterday’s close.
Tech stocks joined the party, with the Nasda 100 similarly jetting up 150 points, while the broader S&P 500 index was also trending in the right direction.
Microchip stocks including Arm Holdings PLC (NASDAQ:ARM), Intel Corp (NASDAQ:INTC, ETR:INL) and Micron Technologies plc were among the top risers, while Tesla Inc (NASDAQ:TSLA) managed to buck the pre-market trend with a 1.8% spike.
3.02pm: Carpetright faces collapse, up to 2,000 jobs at risk
Carpetright has called in the administrators in an attempt to save the company, with up to 3,000 jobs at risk if the Purfleet-on-Thames-based business can’t find a buyer.
According to reports, administrators from PwC are in talks with competitor The Floor Room, as well as FTSE 100-listed B&Q owner Kingfisher plc.
The Times earlier this week reported that Carpetright was seeking a buyer.
Under administration rules, Carpetright, which is owned by Nestware Holdings Limited (which is part of The Meditor Group), has 10 days to secure a buyer.
Carpetright was previously listed on the London Stock Exchange before succumbing to a takeover bid from The Meditor Group in 2019.
The Sun earlier reported on the administration, quoting one insider as saying the business was “a real mess”.
2.20pm: Aviva takes 7.7% stake in 'son of Melrose' Rosebank
Aviva has confirmed it is one of the cornerstone backers of Rosebank Industries, the new investment vehicle of six former Melrose executives.
A stock exchange statement today showed that insurance giant Aviva had taken a 7.7% in the start-up, which has rocketed in value since trading started yesterday.
Share in Rosebank started trading on AIM at 250p with a value of £50 million on Thursday but by today lunchtime were changing hands at 675p making another paper fortune for the financial wheeler-dealers behind the group.
The Melrose band, who own 10% of Rosebank, include its co-founders Simon Peckham and Christopher Miller with former Melrose chairman Justin Dowley chairing the new group.
Reports in June said that these Melrose executives shared the bulk of a £180 million bonus after the company’s 2020 employee share scheme matured.
Melrose’s model is ‘buy, improve, sell’, which it applied when it bought UK engineer GKN in 2018 for £8 billion in a fiercely contested bid battle.
GKN was then split into Dowlais, comprising its auto parts business, and Melrose, the aerospace bits, that, combined, are currently valued at £8.5 billion.
Peckham has said Rosebank will buy industrial companies and manufacturers in the UK, North America and Europe with a value of up to £2.3billion.
FTSE 100 up 14 at 8,237.
1.50pm: Wall Street to open high, Tesla to take a hit, bank season kicks off
The Dow Jones Industrial Index is expected to open 61 points higher this Friday, according to pre-market trades.
The Nasdaq 100, on the other hand, looks set to open effectively flat, having retreated from all-time highs on Thursday.
Tesla Inc (NASDAQ:TSLA) will be a drag on the tech-led index after the electric vehicle titan reportedly delayed its hotly anticipated Robotaxi Day by two months.
The broader S&P 500 index is tipped to open a few points higher at 5,590.
Bank earnings season will get well and truly underway, with BlackRock Inc (NYSE:BLK), Citigroup Inc (NYSE:C), JP Morgan Chase & Co and Wells Fargo and Co all due to report.
1.10pm: Bitcoin continues volatile streak
Bitcoin had another rocky day on Thursday, flip-flopping between intraday highs of $59,650 and lows close to $57,000.
The world’s largest cryptocurrency ultimately closed around 0.6% lower against the US dollar, with losses mounting for the third day in a row this Friday.
As Bitcoin continues to flounder below $60,000, one political heavyweight has given his strongest endorsement of the decentralized economy yet.
In a surprising move, Republican presidential candidate Donald Trump has been announced as a speaker at the upcoming Bitcoin 2024 conference, which kicks off on 25 July.
Trump has become increasingly supportive of the cryptocurrency industry, with the Republican National Committee pledging to “end Democrats’ unlawful and un-American crypto crackdown and oppose the creation of a Central Bank Digital Currency.”
The Bitcoin 2024 conference’s somewhat bizarre line-up also includes Russell Brand, who is facing sexual misconduct allegations, independent presidential candidate Robert F. Kennedy Jr., and whistleblower Edward Snowden.
More conventional guests will include Microstrategy’s chairman Michael Saylor and tech investor Cathie Wood.
Returning to the stock market, the FTSE 100 was last seen 22 points higher at 8,245.
12.12pm: Burberry at risk of sluggish luxury rebound
JPMorgan Chase & Co (NYSE:JPM, ETR:CMC) has warned that the ‘re-acceleration’ of the luxury sector could be slower than anticipated, leading to downside risk for luxury stocks including Burberry.
The luxury sector has undergone a dramatic de-rating over the past year, due in no small part to a fall off in demand in the key China market.
“Based on current newsflow and latest sector trends, we think the re-acceleration might happen at a slower pace than what is currently factored into consensus and hence that earnings revision for the sector might still be skewed to the downside,” wrote JPM.
Although shares are trading at “more compelling levels” following the de-rating, JPM expects an “uninspiring” reporting season ahead and with earnings cuts likely, “we do not see a catalyst short term to turn more constructive for now”.
Burberry’s first-quarter trading update is due on 19 July.
Shares were up 0.8% this Friday, but remain 37% lower year to date.
11.57am: FTSE 100 stays afloat
Blue chips remain in high spirits as midday approaches, with pharmaceuticals giants AstraZeneca PLC (LSE:AZN) and GSK PLC (LSE:GSK, NYSE:GSK) helping to keep the FTSE 100 in the green.
Though coming off morning highs of 8,275, the index is still 20 points higher from yesterday’s close.
Utilities stocks are providing some drags, with water big caps United Utilities plc and Severn Trent PLC (LSE:SVT) falling 2% and 3% respectively, having been overbought on Thursday.
11.34am: Ten million pints for the Three Lions
The British Beer and Pub Association expects pubs to rake in an extra £48 million on Sunday as the Three Lions seek Euro glory against Spain.
Landlords estimate an extra 10 million pints will be pulled from the pre-match build up through to the extended 1am closing bell.
Home Secretary Yvette Cooper is expected to pass a bill under section 172 of the Licensing Act 2003, allowing for a relaxation of licensing hours under “exceptional national significance” circumstances.
Former Tory Home Secretary James Cleverly initially proposed the measure if England managed to reach the finals.
Emma McClarkin, chief executive of the BBPA, said: “On what promises to be a hugely exciting day for the country we expect an incredible 10 million extra pints to be poured in our pubs this Sunday to toast England’s Euros final.
“A huge £48 million in additional trade for pubs and breweries will be generated by fans across the nation.
“As with the semi-finals, pubs will be licensed to stay open until 1am on Sunday night, giving fans even more time to enjoy the game, support our pubs and hopefully celebrate football finally coming home.”
11.16am: Tesla downgraded
UBS has downgraded Tesla Inc (NASDAQ:TSLA) to sell following news reports that Elon Musk’s electric vehicle giant is delaying its much-hyped robotaxi event by two months.
Bloomberg reported that Tesla’s hotly anticipated ‘Robotaxi Day’ will not go ahead in August as planned, instead pushing the event back to October.
Over $60 billion was wiped from Tesla’s valuation following the report, with shares expected to fall again when markets open on Friday.
UBS also highlighted concerns that Model 3 price increases in Europe were less than the tariffs on China-made vehicles recently implemented by the bloc.
10.49am: Graphcore boss rips into risk-adverse UK pension funds
Graphcore boss Nigel Toon has delivered a broadside to Britain’s pension funds as the chipmaker prepares to be taken over by Japanese conglomerate SoftBank.
Toon criticised UK pension funds’ risk-adverse approach to investing in British growth companies, saying they “tend to focus on cost rather than growth”.
In comments published by The Telegraph, Toon said: “We have about £4.6 trillion of capital managed in London as a result of pension funds and insurance. A tiny, tiny percentage of that goes into private companies today
Toon warned that pension funds are missing a “huge opportunity” in ignoring unquoted plcs and startups.
“Our pension funds tend to focus on cost, rather than on growth (and) performance,” said Toon. “That creates its own issues in terms of ‘what’s the future value of your pension going forward?’ And how do we expose some appropriate portion to the high-growth opportunities that some of these scale-up opportunities represent.
“I think there’s a massive opportunity to do that, but there’s a lot of structural things still, I think that needs to be fixed.”
Graphcore, which ambitiously aims to compete with global chipmaking titans like Nvidia and AMD, is being acquired by SoftBank at a reported $600 million valuation.
This falls far short of its $2.5 billion valuation in 2020.
10.10am: Equity exodus escalates
Retail investors pulled a record £1.8 billion out of UK equity funds in May, data from the Investment Association shows.
It marks the continuation of a trend that saw £13.6 billion withdrawn from UK equity funds in 2023 and £12 billion the year earlier.
IA attributes the outflows to “diversification of portfolios” as “investors and their advisors continue to reallocate outside of the UK, with strong inflows for global, Europe and North American funds”.
British policymakers are at pains to rejuvenate London’s struggling capital markets, where delistings and private equity takeovers have ramped up and valuations have shrunk relative to the US.
The Financial Conduct Authority is overhauling the UK listing regime with a simplified and streamlined process coming into effect at the end of this month.
But this is “unlikely to have any impact on retail fund flows, which do not ebb and flow based on the number of companies listing in London”, said Laith Khalaf, head of investment analysis at AJ Bell.
Rather, “there are deep structural changes in the way retail investors buy funds which have led to the exodus from UK equities”.
9.29am: AstraZeneca on the move
British pharmaceuticals megacap AstraZeneca PLC (LSE:AZN) shares surged nearly a percentage point higher on Friday, reflecting what broker Shroe Capital Markets sees as a “catalyst-rich period ahead”.
“AstraZeneca outlined its ‘bold ambition’ to deliver $80bn revenue by 2030 during its recent Investor Day, something we believe looks readily deliverable given the depth, breadth and momentum of the R&D pipeline, particularly in Oncology,” said Shore Cap.
In response, the broker upgraded its long-term forecasts with projected earnings of 11% compounded annually.
This should translate into $15 core earnings per share, comfortably above current consensus estimates of $13.2 EPS.
Shore Cap sees AstraZeneca stock at a fair value of 15,000p per share- a 23% increase from the current 12,200p spot price.
8.55am: The morning so far
The FTSE 100 got off to a strong start today, adding more than 30 points in the opening hour.
As of 8.55am, the blue-chip index was trading at 8,254, bolstered in no small part by pharmaceuticals giants AstraZeneca PLC (LSE:AZN) and GSK PLC (LSE:GSK, NYSE:GSK). They surged 1.25% and 1.3% respectively.
Other top movers in early trades included Rightmove PLC (LSE:RMV) and Barratt Developments PLC (LSE:BDEV), continuing the theme of bullish housing and housing-adjacent stocks since Labour’s recent election victory.
Retailers JD Sports Fashion PLC (LSE:JD.) and Tesco PLC (LSE:TSCO) were bid higher, while water utilities groups United Utilities plc and Severn Trent PLC (LSE:SVT) were knocked lower after being overbought on Thursday.
FTSE 250-listed fund manager Ashmore Group (LSE:ASHM) plc slipped 3% after the emerging markets specialist clocked its second straight quarter of multibillion-dollar net outflows.
“Investor risk appetite remains subdued and institutional decisions to reduce emerging markets exposure continue to drive net outflows,” said Ashmore.
Elsewhere in company news, distressed fashion chain Superdry PLC (LSE:SDRY) will have its last day of trading on the London Stock Exchange today, bringing its listing to an end after 14 years.
Superdry will move its shares to unquoted trading platform JP Jenkins.
In the forex markets, the pound rallied to a 12-month high against the US dollar as traders began to cool on the prospect of interest rate cuts in the short term.
This follows yesterday’s bumper GDP figures that showed the UK economy growing more than expected in May.
8.43am: Tesla sheds $60 billion in value
In overnight news, Bloomberg reported that Tesla Inc (NASDAQ:TSLA)’s highly anticipated Robotaxi Day has been postponed from August 8th to October.
Hype over the event has kept Tesla shares well bid recently, so it was unsurprising to see the stock fall more than 8%, erasing more than $60 billion in value.
Tesla shares are expected to fall another 1.8% when the Nasdaq opens today.
8.24am: Footsie off to strong start
The FTSE 100 got off to a strong start this Friday, with the blue-chip index adding 36 points to 8,258.
Top risers include Rightmove PLC (LSE:RMV), AstraZeneca PLC (LSE:AZN), GSK PLC (LSE:GSK, NYSE:GSK) and JD Sports.
8.10am: Cable crushes 12-month high
Yesterday’s surprisingly strong economic figures helped the pound to zip past 12-month highs against the US dollar this Friday.
The latest gross domestic product data showed that Britain’s economy grew by 1.4% year-on-year in May, outstripping the expected growth rate of 1.2% and doubling April’s 0.7% gain.
Markets have taken this as a hawkish sign for interest rate policy, which should help keep Cable elevated in the near term.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: “In the UK, the pound was already bid yesterday morning after stronger-than-expected growth data helped traders scale back the expectation of an August cut from 70% to a coin toss.
“Combined with rising hawkish voices at the Bank of England, waning political risks and softening US dollar, we could see cable make an attempt on the $1.30 level.
“But the fact that the BoE hawks cry louder doesn’t mean that the doves are not around.”
At the time of writing, the GBP/USD pair was swapping for 1.2912.
7.59am: Graphcore snapped up by SoftBank
UK-based chipmaker Graphcore has been acquired by SoftBank, the Japanese conglomerate and majority owner of British chipmaking giant Arm Holdings PLC (NASDAQ:ARM).
The deal's value is estimated at over $600 million, below the $700 million previously raised in venture capital, and significantly less than Graphcore's $2.5 billion valuation in 2020.
Speaking to The Financial Times, Graphcore’s chief operating officer Nigel Toon highlighted the resources his company will be able to tap to compete with chip US giants like Nvidia and AMD.
7.43am: Superdry says goodbye to London Stock Exchange after 14 years
Distressed fashion chain Superdry PLC (LSE:SDRY) will have its last day of trading on the London Stock Exchange today, bringing its listing to an end after 14 years.
It follows a prolonged period of falling sales, widening losses and most recently a £10 million rescue deal from its founder.
At its peak, Superdry was valued at more than half a billion pounds, but shares have since collapsed over 97% and today is a minnow worth barely £3 million.
Superdry has opted to move its shares to JP Jenkins, a securities-matching platform for unquoted businesses.
7.25 am: Ashmore’s outflows escalate as investors cool on emerging markets
Ashmore Group (LSE:ASHM) witnessed a US$2.4 billion (£1.86 billion) sequential decrease in assets under management in the fourth quarter, as investors remained skittish on the fund manager’s core focus on emerging markets.
Net outflows swelled to US$2 billion in the period, although Ashmore stated that emerging markets returns had been positive.
It marks the second straight quarter of multibillion-dollar outflows, after clocking US$2.1 billion in the third quarter.
“Investor risk appetite remains subdued and institutional decisions to reduce emerging markets exposure continue to drive net outflows,” said Ashmore.
“This trend was notable in the blended debt theme this quarter, which, combined with small net outflows from corporate debt and equities, exceeded the net inflows into the local currency and external debt themes.”
Chief executive Mark Coombs added: “As the trajectories of emerging and developed countries continue to diverge, investor appetite for emerging markets exposure will improve and capital flows will follow, supporting higher risk-adjusted returns over the medium term."
7.06am: Stocks to move higher
Pre-market trades have the FTSE 100 climbing 20 points higher when trading gets underway this Friday after marching nearly 30 points higher yesterday.
Water, housing and retail stocks led the index higher on Thursday. Today, attention turns to fund manager Ashmore Group (LSE:ASHM)’s fourth-quarter trading update.
It was another underwhelming quarter for the emerging markets specialist, with assets under management falling by US$2.4 billion and net outflows swelling to US$2 billion.
There is little of note on the macroeconomic calendar until the US reports on factory gate prices later in the day.