- FTSE 100 falls 19 points to 8164
- Ocado surges after cutting first-half losses
- UK grocery inflation falls further
4.10pm: Stocks mixed, gold hits record
Minutes before the closing bell, the FTSE 100 has been brought close to erasing most of its losses, while the FTSE 250 is slightly in the green. , up 11.6 points.
Most European markets are also in the red, apart from Italy's FTSE MIB, while US markets are mostly in the green, apart from the tech-heavy Nasdaq.
The price of gold meanwhile has climbed to a record just shy of $2460 per ounce.
Demand for the yellow metal has continued to grow this week, following a resumption to strength for US Treasuries after Fed chief Jerome Powell spoke yesterday and a number of banks cut rate forecasts.
The majority of bulge bracket banks now expect two cuts in 2024 totalling 50bp, with the majority expecting this to start in September, notes SP Angel analyst John Meyer, with markets now pricing in a 60% chance of a third 25bp cut in 2024.
"We would expect these to be on the conservative side if labour market weakness accelerates and unemployment rises over the 5% mark," he adds.
3.45pm: US big tech in the red
A 2% fall in Nvidia and other tech stocks dragged the Nasdaq index into the red in the past hour, down 0.3% at one point, but now just below flat.
Many of the big tech names are in the red, with Microsoft down 1.2%, Meta down 1%, Tesla down 1.8%, Broadcom 1.5%, AMD 2.4%.
Back in the UK, the two main FTSE indices are finishing off their worst.
In fact, the FTSE 250 is up 10 points back above 21,200.
This is no longer down to Ocado, which has given back most of its earlier gains, but still up 7.8%.
Next are Carnival, up 4.3%, Close Brothers Group up 3.4% and Ascential up 3.1%.
3.27pm: UK growth upgrade from IMF
The International Monetary Fund has made a U-turn on its forecasts for the UK economy, now expecting it will not now be the slowest growing of the G7 nation this year - even predicting that it will be the fastest growing in Europe next year.
UK growth for 2024 has been upgraded to 0.7% by the Washington-based fund, up from 0.5% before.
In its wider world economic outlook, the IMF warned the global economy is "in a sticky spot".
The IMF said "the escalation of trade tensions could further raise near-term risks to inflation by increasing the cost of imported goods along the supply chain” and that interest rate cuts might not arrive as soon as many people hope.
"The risk of elevated inflation has raised the prospects of higher-for-even-longer interest rates, which in turn increases external, fiscal, and financial risks."
Global growth is projected at 3.2% for 2024, the same as its May forecast, with 3.3% forecast for 2025.
3pm: US stocks open higher
US stocks have opened higher, led by the small-cap Russell 2000, which is on track for its fifth day of 1%-plus gains, up almost 10% since the start of the month.
Analysts at Bespoke Investment Group noted that if the index keeps that up to the closing bell, it would only the fifth time such a run happened times since 1979.
The Dow Jones is up 1%, led by UnitedHealth, IBM and Amazon, while S&P and Nasdaq are up either side of 0.3%.
Of the mega caps, Apple and Meta are flat, Microsoft down 0.4%, Nvidia down 0.3% and Tesla are down 1.2%. Alphabet is up 0.3%.
The S&P 500 "has gone 350 sessions through Monday without a drop of at least 2% — on pace for its best streak in 17 years, if the index reaches 352 sessions by Wednesday’s close"
h/t BBG's @JessicaMenton
— Michael Brown (@MrMBrown) July 16, 2024
2.30pm: Frasers bid
Mike Ashley’s Frasers Group PLC is down 0.5% after reports earlier that it is moving closer to bidding for Yoox Net-a-Porter, the online luxury fashion retailer.
Investment bank Goldman Sachs, which is overseeing the sale of the online platform, is believed to have been approached by the Sports Direct owner, according to Retail Week.
The two are said to be in the process of drawing up a non-disclosure agreement regarding the deal.
Not only would the deal help boost Fraser’s luxury arm, adding to its brands such as in-store retailer Flannels, while also bolstering its online offerings.
2.11pm: Thoughts on US retail sector
Although US retail sales were unchanged in June, there was a 0.9% month-on-month rise in control group sales.
This strong growth in the control group "should ease concerns about the plight of the consumer in the wake of the renewed slump in sentiment", says Paul Ashworth at Capital Economics.
The control group is a subset of retail categories used to calculate key economic indicators, excluding volatile categories such as autos, gas and building materials to give a clearer view of underlying retail trends.
"Admittedly, both second-quarter consumption and GDP growth still appear to have been no better than 2% annualised, but the strong gain in June does set up for a better third quarter performance."
He says the 2.0% monthly decline in motor vehicle sales values was a "little bigger than we expected" and the 3.0% fall in gasoline station sales was "a bit on the high side given the size of the drop back in gasoline prices".
A 1.4% rise in building material sales suggested warm weather last month may have provided a boost, but didn’t do much for food services sales, up 0.3%.
The surge in control group sales was led by a 1.9% rise non-store retail, which Ashworth said was enough to push the three-month-on-three-month annualised growth rate back to 3.3%, from a low of 1.3% back in March.
1.45pm: US optimism not filtering over here
US stock futures have perked up further after US retail sales came flat for June, better than expected.
New US Census Bureau data shows US retail sales in June were unchanged month on month, while the market had forecast a 0.3% drop. May's figure was revised to a 0.3% increase.
Excluding automobiles, sales were up 0.4%, improving from the revised 0.1% rise the prior month and beating the 0.1% consensus estimate.
In futures markets, the Dow Jones and Nasdaq 100 are both seen up more than 0.3% with S&P futures up 0.26%.
In London it's not moved the dial, with the Footsie down 0.5% still and the FTSE 250 index down 0.3%.
1.29pm: Gold nears high
After an extra slide, the FTSE is now sitting down 41 points or 0.5% lower for the day.
Gold is the more interesting market for market analyst Fawad Razaqzada at City Index, as he wonders if it could reach a new record today.
"Thanks largely to weakness in economic data, and falling inflationary pressures, bond yields are continuing to remain under pressure. This is helping to boost the appeal of low- and zero-yielding assets, and thereby keeping the gold outlook positive," he says.
Gold has extended its weekly gains to 4% to $2434 per ounce, while bitcoin has also climbed back 2% higher to almost $64,000.
"Both assets are now close to their all-time highs," Razaqzada says, with gold only a few dollars shy of breaking its May high of $2450.
"The underlying trend is clearly bullish with the metal already achieving three consecutive weeks of positive closes. This persistent performance positions gold to potentially conclude its sixth straight month of gains and achieve a new record while at it."
Over the past ten months, gold has experienced only one monthly decline, he says, the 1.1% drop in January, which he says makes buying the dip strategy more effective than shorting gold.
1.12pm: US big banks beat forecasts
Bank of American and Morgan Stanley (NYSE:MS) have almost concluded the US big bank reporting season, both beating Wall Street expectations.
Morgan Stanley (NYSE:MS) reported 40% profits growth, despite slower growth from its wealth management business.
Second quarter earnings per share came in at $1.82, well ahead of the $1.24 a year ago and the $1.65 Street consensus, as revenues beat at $15 billion versus $14.3 billion.
Net income jumped to $3.1 billion from $2.2 billion a year earlier, ahead of analysts’ estimates, as investment banking fees surged to $1.6 billion from $1.1 billion last time, echoing a trend among big banks so far this year.
For Bank of America, EPS fell to $0.83 from $0.88 a year ago, but this topped the $0.80 consensus forecast, as revenues rose 1% to $25.4 billion, also beating estimates of $25.22 billion.
Consumer banking revenues shrank 3% for BofA, but jumped 29% at investment banking and 9% at global markets and trading, and increased 6% in global wealth.
12.30pm: What to watch in US earnings season
With US equities trading at all-time high levels as the second-quarter earnings season kicks off in earnest this week, and the S&P 500 index already up 18.1% so far this year, "investors will be looking for evidence that can sustain the rally further", says UBS chief investment officer Mark Haefele.
He has outlined a number of factors that he expects could "shape market sentiment" during earnings season:
UBS expect the fastest earnings growth in over two years, with S&P 500 earnings predicted to grow 10-12% on a year-over-year basis, which would represent a 2-3% beat to Wall Street consensus forecasts. If the Swiss bank is correct, it would be the strongest growth rate since the start of 2022.
If correct, it would also be likely to a result of a broadening in earnings growth to companies outside the Magnificent 7, in what Haefele says would be the first quarter of positive EPS growth since 2022.
Artificial intelligence is the next trend, specifically, how companies are monetising it. "We believe the debate around AI capex versus monetization will take center stage for AI-related companies during this earnings season, after a significant upward revision in big tech’s capex during the last quarter’s results." Just beating profit expectations "may not be enough" to lift tech shares, he adds, with management also needing to provide insights about future revenue and capex trends. This "will likely matter more, in our view".
Volatility, as measured by the VIX index, which picked up yesterday, could rise more amid the uncertain political environment. "The attempted assassination of former US President Donald Trump over the weekend has added another layer of complexity to an already tumultuous election season, and we expect further market volatility as the presidential campaigns continue," says Haefele.
12.12pm: Losing traction in Europe
Stocks in London and the rest of Europe are continuing to wallow in the red, though Wall Street futures are indicating another positive session is coming across the Atlantic.
The FTSE 100 is down 0.30%, though on the continent the worst losses are in France and Spain, where the CAC 40 and IBEX 35 are both down around 0.8%. The wider Euro Stoxx 600 is down 0.45%.
"European markets are losing traction once again today, with equities remaining under pressure after yesterday’s session that saw Chinese economic data highlight the ongoing demand issues from the world’s largest economy," says Joshua Mahony at Scope Markets.
Markets were down even before the first decline in a year was reported in the German ZEW economic sentiment survey report, falling to a four-month low.
Eurozone trade balance figures also came in well short of expectations, driven primarily by weak imports.
"With the ECB interest rate decision due on Thursday, traders will likely hope that this fresh source of economic weakness could further enhance the chance of a rate cut in September," says Mahony.
He also highlights Donald Trump’s decision to opt for JD Vance as his vice presidential pick, which has "doubled down on the bullish bitcoin narrative", with the cryptocurrency soaring to a three-week high of $65,000 yesterday.
With Vance declaring $250k of Bitcoin holdings two years ago, "2024 could go down as the year that Crypto hit the mainstream, with Wall Street and the White House both on-board", he adds.
"While we are seeing a decent pullback for cryptocurrencies this morning, bulls will be hoping for fireworks when Trump makes an appearance at the bitcoin conference in Nashville next week."
Looking ahead to the rest of today, the latest US retail sales figure will bring "a fresh insight into the US consumer at a key moment," he says.
US earnings today include Bank of America, Morgan Stanley (NYSE:MS), Charles Schwab, and State Street.
11.38am: Betting odds on new England manager
Both FTSE 100 is dropping lower (following the resignation of Gareth Southgate as England manager).
The Footsie is down 21 points or 0.26% now, having been down just 3 points an hour ago.
The more domestically focused FTSE 250 is buoyed by the Southgate news, it seems, down less than 0.1%.
We've got our first email about Southgate, with bookmakers eyeing who will be the new man at the helm of the Three Lions.
Ex Brighton and Chelsea manager Graham Potter is at 3/1, Newcastle manager Eddie Howe at 6/4, Mauricio Pochettino at 4/1, England Under 21 chief Lee Carsley at 10/1.
Recently departed Liverpool boss Jurgen Klopp is at 12s and would likely be a popular choice, while Man City boss Pep Guardiola is at 25s, seemingly a less probable choice.
27% of the goals England have ever scored at international tournaments came under Gareth Southgate
— Duncan Alexander (@oilysailor) July 16, 2024
11.16am: Southgate resigns as England manager
Gareth Southgate has resigned as manager of the England men's football team, after taking them to consecutive Euros finals but coming away without a trophy.
How will it affect markets? Not much. But I'm bound to get some emails that try to find a link.
After 102 games and almost eight years in charge, Gareth Southgate has announced he is to leave his role as manager of the #ThreeLions.
— England (@England) July 16, 2024
11.11am: Days are getting longer - could it influence markets?
Interesting story doing the rounds in a few places this morning: the climate crisis is very slightly increasing the length of each day.
This is based on the melting of polar ice, which is adding milliseconds to the length of the day, which scientists say could be enough to disrupt financial markets due to the affect on atomic clocks.
"All the datacentres that run the internet, communications and financial transactions, they are based on precise timing. We also need a precise knowledge of time for navigation, and particularly for satellites and spacecraft," Professor Benedikt Soja of ETH Zurich in Switzerland told the Guardian.
Added to slight increases over millions of years due to the gravitational drag of the moon on the planet’s oceans and land, the more rapid melting of the polar ice sheets due to global warming led to more water in the seas nearer the equator, making the Earth 'fatter' and minutely slowing the rotation of the planet to add to the length of the day.
10.50am: Markets to turn more cautious later this year, says Aviva
Disinflation and political risk are the two key themes driving market movements, according to the latest quarterly update from Aviva Investors.
"We expect the next 12 months to be somewhat of a tug-of-war for markets, as the disinflation process slows, while political risks rise," says Michael Grady, head of investment strategy and chief economist at the asset manager.
"On the one hand that could be supportive of risk assets while limiting the extent of rate cuts as inflation only slowly falls back to 2%.
"On the other hand, election outcomes that result in more isolationist policies could result in increased market volatility and a more challenging environment for risk assets."
Looking into the coming few months, Grady says Aviva has a "moderately overweight" preference for equities, as economic and corporate fundamentals are supportive.
"However, with the main political risk likely to come with the US elections in November, we expect a more cautious allocation may be necessary as it approaches."
The asset manager predicts that global growth will slow very slightly to around 2.7% across 2024, marking a small decrease on the 2023 figures of 3%.
Grady said the equities tilt is towards "quality and growth markets, such as Japan and the US on a country level.
"Their stock markets are more expensive than the UK and the Eurozone, and concentration risk is a concern, but 'cheap' markets on simplistic valuations do not automatically augur value. "
He's probably talking about the UK there, where shares are "cheap" but have remained so for several years.
Aviva's investment team view on government bonds is generally neutral as "their negative carry relative to cash, inverted yield curves, and positive correlation to risky assets making them poor diversified".
10.22am: HSBC creates new green infrastructure finance unit
HSBC Holdings PLC (LSE:HSBA) has launched a new green infrastructure finance division, led by former coalition government minister Danny Alexander.
Alexander, the former chief secretary to the Treasury under David Cameron's coalition government, has been hired as CEO of HSBC Infrastructure Finance, according to a staff memo seen by various media organisations.
The new unit will provide finance and advise on projects supporting the transition to cleaner energy sources, according to plans outlined in a memo to staff from HSBC's Global Banking & Markets chief.
"HSBC Infrastructure Finance will facilitate deployment of HSBC’s balance sheet, including through the net-zero portfolio, supporting project development in partnership with clients,” the memo said.
10.11am: Retailers helping cut FTSE losses
The FTSE 100 is making another effort to climb towards the flat-line again, cutting its loss to 0.2% from almost 0.5% earlier as B&M, M&S, Sainsbury's, Kingfisher and Tesco are among the risers.
London's doing the best among the major European markets, with Frankfurt's DAX and Milan's FTSE MIB both down around 0.45%, while in Paris the CAC 40 is losing 0.57% and in Madrid the IBEX is off 0.66%.
In France, and the wider Euro Stoxx 600, which has fallen 0.46%, luxury stocks are notable fallers, including Kering, LVMH, L’Oréal and Hermes.
US stock futures are pointing to a flat start, currently.
Among the continental news, Deutsche Bank has been ticked off by Germany’s financial watchdog over its 2019 financial report, as it failed to include €2.1 billion of deferred tax assets linked to multiyear losses at US operations. Deutsche Bank put out a statement saying it disagreed, arguing that the results "comply fully with IFRS requirements".
9.56am: Ocado 'at crossroads', Rio iron ore 'weak'
Let's hear what market analysts think of this morning so far.
The Footsie is being dragged down by Rio Tinto and Experian (LSE:EXPN), says Dan Coatsworth, investment analyst at AJ Bell.
He says Rio Tinto's latest production update was disappointing, with iron ore the biggest worry area after a weak quarter for output.
Experian (LSE:EXPN)’s update was "generally fine but didn’t deliver the earnings upgrades needed to justify its premium stock rating".
Burberry is also extending yesterday’s losses as "investors continued to lose patience with the luxury goods company. While it is getting a new boss this week, the scale of the challenge to fix the business looks large", says Coatsworth.
Susannah Streeter at Hargreaves Lansdown says the blue-chip index is struggling "as investors assess the struggles in the retail sector" following the updates from Burberry and Hugo Boss.
"The wash-out weather and its effect on buyer behaviour has been highlighted in Kantar’s update, showing that sales of cold and flu products rose 35% and fake tan jumped 16% as the sun has remained hidden for much of the July," she says.
Water companies United Utilities and Severn Trent have both fallen around 2% after it was revealed they are joining those facing enforcement cases brought by regulator Ofwat.
"Ofwat is showing more teeth following the huge public outcry about the amount of pollution in the UK’s waterways. Bringing an enforcement case means that Ofwat is concerned that the companies have failed to meet their obligations. A detailed investigation will follow to determine if contraventions have occurred and what measures they may have to take to clean up their act. If there are serious breaches fines could follow," says Streeter.
Shares in Ocado have roared ahead jumping 17% in early trade, with John Moore, senior investment manager at RBC Brewin Dolphin, saying: the company "finds itself at a crossroads".
"While there is decent growth at its business divisions, the deferral of rolling out additional customer fulfilment centres is a drag on the momentum the company needs to ramp up cashflow and refinance the debt that falls due over the next three years.
"On the positive side, revenue and cashflow remain on a positive trend, and the easing of inflation should help attract more customers.
"However, there is a lot of ground to make up for Ocado to get to where many analysts hoped it would be by now, and some self-help will be required to meaningfully reverse the share price decline of the past three years."
9.35am: Small cap fallers
There's some big share price drops among the small caps this morning, including auto component supplier Strip Tinning Holdings PLC (AIM:STG), wjocj saw its shares fall 25% following a warning about the impact of a slowdown in the glazing and battery technology markets.
The company, a supplier of specialist connection systems, reported a challenging first half of 2024 with revenue and profitability impacted by market headwinds.
Vanquis Banking Group PLC (LSE:VANQ), which has slumped 16% after warning that a series of new impairments will affect its financial strength metrics.
In its statement, Vanquis said £29 million of the new write-downs related to its vehicle finance activities with a further £11 million for a redundant app and property.
Ian McLaughlin, the sub-prime lender's chief executive, said: "We have been carrying out a comprehensive review of our balance sheet and this has led to the revaluation of some historic balances. While finding these one-off items is disappointing, it does mean that our financial position is now clearer and more stable.”
Fintech group TruFin plunged 31% after it emerged that its Satago Financial Solutions business had seen the early termination of an agreement with Lloyds Banking.
Satago was providing the high street lender single invoice finance and whole-of-book invoice factoring services. TruFin said that Lloyds' decision does not reflect the quality or robustness of Satago's platform.
9.10am: Experian (LSE:EXPN) dips
Experian (LSE:EXPN) shares have fallen 2% after it was revealed that its chief operating officer is jumping ship to run the American online protection specialist McAfee.
Craig Bounds' departure was announced alongside robust, but largely anticipated numbers for the third quarter. Overall, revenues from the credit checking giant were up 8% in the three months ended June 30, with the UK and Ireland region the laggard with growth of just 4%.
For the year, the FTSE 100-listed group expects the top line to rise by 6-8% with margins to expand by up to half a percentage point.
Analysts at Panmure Liberum said: "Q1 trading is in line with our expectations, albeit with a different geographic mix, and the FY25E outlook is unchanged."
8.56am: B&M 'relatively good'
One of the top risers on the FTSE is B&M European Value Retail SA, the discount retailer.
The shares are up 1.8% after it reported higher sales for its first quarter, helped by new store openings and volume growth.
Group sales increased by 2.4%, reaching £1.3 billion for the 13-week period to 29 June, with growth across its UK, French, and Heron Foods segments.
However, B&M UK experienced a 3.5% decline in like-for-like sales when including the impact of Easter timing.
Analysts at Peel Hunt said it was a "relatively good quarter", given the strength of the comparatives from a year ago.
"While last year saw ideal conditions, this year has been more difficult due to unseasonal weather. However, management planned conservatively and there is no issue with excess stock.
"The new stores have started well, with 19 new outlets (mostly Wilko’s) exceeding expectations. Management continues to highlight improved store standards, which are evident from our store visits."
8.47am: London stocks trim losses
Both FTSE 100 and FTSE 250 have both trimmed their early losses, with the mid-cap index breaking into positive territory.
The blue-chip index is down just over 19 points now, or 0.2%, while the mid caps are down 20 points or less than 0.1%.
Ocado is doing some of the heavy lifting, up 15.5%, but it's partly offset by a near-8% fall for Trustpilot Group PLC.
Shares in the online rating group took a hit on Tuesday after shareholder Vitruvian Partners sold off a 3% stake, worth £27.5 million.
8.27am: Ocado and Tesco growth stands out
More news on Ocado, via the Kantar supermarket data update.
Ocado Retail, the joint venture between Ocado Group PLC (LSE:OCDO) and Marks and Spencer Group PLC (LSE:MKS), was the fastest growing grocer for the fifth month in a row, with sales up by 10.7% over the 12 weeks to 7 July.
Its market share rose to 1.8% from 1.7% a year ago.
Market leader Tesco PLC (LSE:TSCO) grabbed its largest chunk of further share gain in over two and a half years, taking 27.7% of the market, up from 27% last year.
J Sainsbury PLC (LSE:SBRY) sales grew 4.7% over the 12-week period, with its share standing at 15.3%, up from 14.9%.
More declines for Asda, down 5.3% in the period, meant its market share gap to Aldi continued to shrink, 12.7% to 10.0%, though Aldi grew only 0.1%.
The race is tighter for Morrisons to hold onto its fifth place, with Lidl growing 7.8% to the Bradford-based chain’s 1.0%, though the gap remained at 8.7% versus 8.1% as it was a month ago.
8.18am: Grocery inflation continues to fall
Boosted by booze and snacking for the Euros football viewers, UK supermarket sales picked up in the past month, while grocery inflation fell to its lowest since September 2021.
Supermarket price inflation dropped to 1.8% for the 12-week period ending 7 July, new data from Kantar showed today, with prices falling fastest in toilet tissues, butter and dog food.
Prices continued to rise for vitamins and supplements, as well as chilled drinks and deodorants.
Kantar found that sales increased 2.2% over the four weeks to 7 July, up from 1.0% in the preceding four-week period.
Supermarket sales benefited from the men’s Euros, as football fans drove up purchases of beers, crisps and snacks on matchdays
Unseasonably wet weather boosts sales of artificial tan and cold and flu treatments but dampens demand for sun cream, Kantar found.
8.15am: FTSE 100 tumbles at open
The FTSE 100 has tumbled 46 points lower at the open, down 0.6% to 8137.
Leading the fallers is Burberry Group PLC (LSE:BRBY), down another 3.3% today to add to the almost 18% yesterday.
Other luxury retailers have added their worried voices, with Cartier owner Richemont this morning warning that weak China demand had hit sales, and Hugo Boss also cuts full year sales guidance over weaker demand in China and the UK.
Rio Tinto has dropped 2.2% as investors quail over the $6.2 billion investment it will make in its Guinea iron ore project or maybe its second-quarter production update, though it claimed this showed "we are beginning to see a step-change in production".
On the FTSE 250, Ocado has jumped 18% after its reported lower half-year losses.
7.56am: Rio Tinto green-lights iron ore project
Rio Tinto Ltd (LSE:RIO, ASX:RIO, OTC:RTNTF) said the final green lights have been given for the $11.6 billion development of the Simandou high-grade iron ore deposit in Guinea.
First production from the Simfer mine is expected in 2025, ramping up over 30 months to an annualised capacity of 60 million tonnes per year, with Rio's share to be 27 million tonnes a year.
Guinean and Chinese regulatory approvals have now been received for the project so that co-investment will be made in the development of rail and port infrastructure that is expected to be Africa's largest new mine and infrastructure investment.
"Simandou will deliver a significant new source of high-grade iron ore that will strengthen Rio Tinto's portfolio for the decarbonisation of the steel industry, along with trans-Guinean rail and port infrastructure that can make a significant contribution to the country's economic development," said Rio Tinto copper chief executive Bold Baatar.
7.49am: Water regulator warns two FTSE firms about environmental performance
Water regulator Ofwat has opened four new enforcement cases against British water and wastewater companies, including two formal notices served on FTSE 100-listed water companies, Severn Trent PLC (LSE:SVT) and United Utilities Group PLC.
It follows a detailed analysis by Ofwat of their environment performance and the rate at which these companies spill from storm overflows.
Following this latest round of enforcement cases, all 11 water and wastewater companies across England and Wales are, or have been, under investigation by Ofwat for how they treat sewage and wastewater.
United Utilities said Ofwat issuing an information request "does not imply" that the regulator will conclude that formal enforcement action and/or a financial penalty will be imposed.
"We understand and share people's concerns about the health of the environment and the operation of wastewater systems, including combined sewer overflows," it said in a statement, adding that it has "a dedicated 500 strong team working across the region, driving reductions in the number of spills".
7.36am: Ocado cuts losses, ups guidance
Ocado Group PLC (LSE:OCDO) has reported a smaller first-half loss and raised its earnings and cashflow guidance for the full year.
The online grocery group posted interim numbers showing revenue of £1.5 billion for the 26 weeks to 2 June, up 12.6%.
Group underlying profit (EBITDA) mushroomed more than fourfold to £71.2 million, with all three segments in positive territory.
Its reported losses before tax shrank to £154 million from £290 million a year ago.
Ocado said it expects underlying cash flow to improve by £150 million, up from £100 million previously, and for the Technology Solutions arm to "achieve a mid-teens EBITDA margin", compared to at least 10% previously.
Boss Tim Steiner, who lost the support of one longstanding bullish analyst yesterday, who downgraded the shares after a number of overseas clients paused or stopped their Ocado developments, said: "We have come through an unprecedented period for online grocery, with multiple years of high food inflation following a surge in demand during the pandemic.
7.17am: FTSE 100 to keep falling
The FTSE 100 is expected to extend its losses on Tuesday despite more record highs achieved overnight on Wall Street.
Continuing where it left off the day before, London's blue-chip index is heading for a 40-point drop, according to spread-betting platforms.
Asian stocks are mixed, with the Hang Seng down, Shanghai flat, and Nikkei up, while the Asia Dow is down 0.6%.
Overnight, the Dow Jones rose 0.5%, the Nasdaq 0.4% and the S&P 500 climbed 0.3%, while the small-cap Russell 2000 surged 1.80% to a two-and-a-half year high.
Donald Trump was confirmed as the Republican nominee for the presidential election and stocks that are expected to benefit from him winning were among the biggest risers.
But while many assets benefited from the prospect of a Trump presidency, there were also points of weakness, said Deutsche Bank macro strategist Jim Reid, pointing to solar energy firms falling, given the view they’d fare better under a Democratic administration.
Elsewhere, there was a significant underperformance for Mexican assets, with the Mexican Peso down by almost 1% against the US dollar, and Mexico’s equity index falling 1.1%.
The other major story of the day, said Reid, was Fed chair Jerome Powell's interview at the Economic Club of Washington DC, which somewhat coincided with the pricing of Fed cuts for the rest of the year rising to the highest since early April.
Powell’s initial comments noted that “the three readings in the second quarter… do add somewhat to confidence” that inflation is returning to the 2% target, and that the inflation and labour market mandates are now “in much better balance”.