- FTSE 100 down 55 points to 8,149
- Microsoft outage causes havoc
- Retail sales miss the mark
4.20pm: Markets firmly in red
The FTSE 100 is wrapping up the week on a glum note, with the blue-chip index getting slammed 55 points lower to 8,149 in the final 30 minutes of trades.
It brings the weekly losses to more than 100 points, with some of the biggest losers including Burberry Group PLC (LSE:BRBY), Antofagasta plc, Glencore PLC (LSE:GLEN) and Severn Trent PLC (LSE:SVT).
3.37pm: CrowdStrike boss ‘deeply sorry’ for global IT meltdown
The boss of the cybersecurity firm seemingly to blame for the unprecedented IT outage on Friday said he is “deeply sorry for the impact that we’ve caused to customers”.
Speaking to NBC, George Kurtz, founder and chief executive of CrowdStrike, conceded that it “could be some time for some systems” to come back online.
CrowdStrike apparently caused the global IT meltdown, which saw airlines grounded, emergency services go offline and broadcasters and telecoms companies go dark, because of a defect found in “a single content update” for Microsoft Windows hosts.
The error sent the world into turmoil on Friday, causing widespread disruption to businesses.
“We identified this very quickly and remediated the issue,” said Kurtz, stating that CrowdStrike was “working with each and every customer to make sure that we can bring them back online”.
NBC queried why a faulty update could cause such mayhem. “We have to go back and see what happened here”, Kurtz replied, though he ruled out the possibility of a malicious cyber attack.
Trains were heavily disrupted in the UK, while the NHS warned that thousands of GPs have been affected by an issue with the EMIS Web system.
2.56pm: Unilever results: What to expect
Unilever PLC (LSE:ULVR) is forecast to report 4.7% year-on-year underlying sales growth in the second quarter, according to UBS analysts.
Total sales volumes are tipped to expand by 3%, with an observable increase in gross margins also predicted.
They represent modest projections for an FMCG giant attempting to kickstart a turnaround plan labelled by one bank as “the most compelling turnaround story in European consumer staples".
As part of this attempt to get sales growth ticking up again, Unilever recently decided to scoop out its ice cream division, which is home to Ben & Jerry’s. Magnum, Wall’s and others.
Announcing the spinout in March, Unilever said it “is confident that the future growth potential of ice cream will be better delivered under a different ownership structure”.
But Unilever must convince shareholders that this was the right idea by showing progress on its income statement.
That is unlikely to happen as immediately as the second-quarter and interim trading update on 25 July, leaving the emphasis on forward sales guidance for the rest of the year.
Analysts remain fairly conservative on this front.
According to Berenberg’s latest guidance, Unilever should see underlying sales growth of 3-5% for the full year, with modest margin expansion.
2.45pm: Wall Street fumbles, Nasdaq flat
The Nasdaq and S&P 500 opened flat at 19,714 and 5,540 respectively today, with the Dow Jones Industrial Average plummeting 228 points.
Banking stocks caused the biggest drag on the DJIA, with JPMorgan Chase & Co (NYSE:JPM, ETR:CMC) and Goldman Sachs falling more than 3% each.
Boeing, Amazon and Apple are also down.
Luckily for the tech-heavy Nasdaq, buoyant chipmaking stocks including Broadcom, Intel and Nvidia Corp are keeping the index afloat.
In London, the FTSE 100 continues to trade in the red and was last seen down 43 points at 8,161.
1.42pm: Bitcoin’s Trump trade on shaky ground
Benchmark cryptocurrency bitcoin’s recent ‘Trump trade’ rally has cooled off as weekly trading enters the final stretch.
Bitcoin initially pumped following the shock attempt on presidential nominee Donald Trump’s life last Saturday, as traders weighed up the heightened prospect of a (comparatively) pro-crypto candidate taking office in November.
The BTC/USD pair saw one of the best daily sessions in weeks on Monday, but market bullishness has since fallen back, with losses posted across the previous two trading sessions.
Bitcoin has, however, added around 0.3% against the US dollar today, bringing the BTC/USD pair to $64,195 at the time of writing.
Back to stocks, the FTSE 100 remains firmly in the red, down 43 points to 8,161.
1.20pm: US markets react to IT disaster
US stocks look like they will hold their ground when trading commences today, as a major IT outage continues to reverberate around the world.
Microsoft servers crashed in all corners of the world this morning, with the tech giant’s cybersecurity partner CrowdStrike seemingly to blame.
Emergency services went dark as did communications and broadcast services, with CrowdStrike president George Kurtz conceding that “a single content update for Windows hosts” was the culprit.
“CrowdStrike is actively working with customers impacted by a defect found in a single content update for Windows hosts. Mac and Linux hosts are not impacted,” said Kurtz.
As the global economy reboots, the Dow Jones Industrial Average is set to open 71 points lower, but the Nasdaq 100 is expected to gain 28 points.
The broader S&P 500, meanwhile, is tipped to open flat at 5,550.
On the company news front, American Express posted a bumper 39% profits in a second-quarter trading update this morning.
Profits were supercharged by high-end spending on travel and entertainment.
12.37pm: Watch to watch for in British Gas-owner Centrica’s results
UBS predicts another £250 million top up to British Gas owner Centrica PLC (LSE:CNA)’s share buyback programme when the utilities company reports on 25 July.
Centrica has been walking a tightrope between committing to investor returns and diverting cash flow to value-enhancing energy projects.
In February, Citigroup researchers suggested that the energy giant’s share price at the time stemmed “from an investor meeting feedback referencing Centrica not wanting the entire equity story to be around share-buybacks”.
Centrica boss Chris O’Shea acknowledged the company needed to keep hold of "quite a bit" of cash to deal with energy market volatility.
Next week’s interim results follow a June trading update confirming that current-year has been in line with analyst expectations despite a return to a "more normalised" market backdrop, as gas prices staged a retreat from the highs following the Ukraine invasion.
Centrica has not budged from its full-year earnings guidance of 18.3p per share and UBS analysts do not expect that to change.
“We believe it is too early for the company to materially raise full-year EPS guidance,” they said.
Analysts stated that Centrica’s profitability is “hugely exposed” to domestic volumes, energy volatility, LNG diversion spreads and nuclear output.
11.55am: Deadline extended in Hargreaves takeover talks
Hargreaves Lansdown has extended the deadline for private equity firm CVC to make a formal takeover offer.
CVC tabled a revised £5.4 billion bid for Hargreaves on 18 June, giving CVC until this Friday to set the offer in stone under Code of Conduct rules.
"Discussions between Hargreaves Lansdown and the Consortium, as well as the negotiation of definitive transaction documentation, remain ongoing,” Hargreaves said in a regulatory statement announcing the extension.
CVC now has until 5 August to make a formal offer.
“There can be no certainty that a firm offer will be made for Hargreaves Lansdown nor as to the terms on which any such firm offer might be made,” Hargreaves added.
The proposed takeover has proved controversial, with investor Lancaster Investment Management slamming it as unfair to smaller shareholders.
11.30pm: Crowdstrike president blames ‘single content update’ for global IT outage
President George Kurtz of Crowdstrike Holdings, the cybersecurity firm in the hot seat amid a global IT outage, has blamed “a single content update for Windows hosts” for a fault that impacted airlines, emergency services and broadcasters around the world.
“CrowdStrike is actively working with customers impacted by a defect found in a single content update for Windows hosts. Mac and Linux hosts are not impacted.
“This is not a security incident or cyberattack. The issue has been identified, isolated and a fix has been deployed, Kurtz wrote on X.
Crowdstrike shares are expected to fall sharply when US markets open, with pre-market trades pointing to a 16.5% decline.
11.20am: LSEG back in full swing
The London Stock Exchange’s regulatory news service (RNS) has resumed operations after going dark this morning due to a global IT outage.
A backlog of RNS statements was published at 10.36am.
LSE trading was unaffected by the global outage, which saw airlines, emergency services, broadcasters and communications networks go offline after an apparent “flawed anti-viral update” from cybersecurity firm Crowdstrike caused Microsoft Windows to crash on millions of servers.
Crowdstrike president George Kurtz blamed a “single content update” for the crash.
Markets remain in the red, with the blue-chip FTSE 100 index falling 33 points to 8,171 at the time of writing.
11.04am: Government borrowing falls
The latest government borrowing data that was eclipsed by the global IT outage ballyhoo this morning showed that borrowing fell sharply in June.
ONS said that UK borrowing in June was £14.5 billion, or down by £3.2 billion from a year ago, and the lowest June borrowing total since June 2019.
Interest payable on central government debt was £7.4 billion, £5.5 billion less than in June 2023, largely because the interest payable on index-linked gilts rises and falls with the Retail Prices Index (RPI).
ONS chief economist Grant Fitzner said: “The reduction from last year reflected a fall in spending, thanks to lower debt interest payments and the ending of energy support schemes, as well as higher tax revenues.”
10.43am: FTSE 100 remains in the red
Markets remain bearish this Friday as the global IT shortage continues to throw the usual programme into disarray.
The London Stock Exchange’s regulatory news service (RNS) remains offline, although trading has not been affected.
At the time of writing, the blue-chip index was down 45 points to 8,159.
10.01am: Ladbrokes, JD Wetherspoon hit by global IT outages
Entain PLC (LSE:ENT)-owned bookie Ladbrokes has been hit by the global IT outage apparently caused by a major upgrade issue at Microsoft’s cybersecurity partner Crowdstrike.
Ladbrokes Tweeted: “You might have seen the news about the global technical issue affecting airlines, banks etc. unfortunately we're experiencing this too.
“We're working hard to resolve the issue but don't know when it will be fixed. Thanks for being so patient and apologies for the inconvenience.”
Responding to one gazumped punter, Ladbrokes wrote: “Looks like the shops are impacted too. As it's a global issue you should be able to find out when it's fixed by following the news or right here on X.”
For anyone hoping to bunk off work early and head for a morning pint, make sure to bring cash.
“We can confirm the Wetherspoons app is currently not working. We are working hard to resolve the situation. However, customers can pay for their food and drinks in cash,” the company stated.
Downdetector shows a spike in outages at all major supermarkets including Tesco and Sainsbury’s; payment rails Mastercard and Visa; most major high-street banks; broadcaster Sky; and BT.
Entain shares were last seen 2.1% lower and JD Wetherspoon 0.8% lower.
9.38am: Puts on Crowdstrike ramp up amid global network chaos
Cybersecurity giant Crowdstrike Holdings plc is coming under immense selling pressure as its role in a major global outage becomes clearer.
Airlines, emergency services, broadcasters and and communications networks across the world have reported issues after an apparent “flawed anti-viral update” caused Microsoft Windows to crash on millions of servers.
"CrowdStrike is aware of reports of crashes on Windows hosts related to the Falcon Sensor," Crowdstrike said in a statement. Falcon Sensor is a cybersecurity software platform developed by Crowdstrike.
Markets reacted in expected fashion, sending Crowdstrike shares 14% lower and counting in pre-market trades, while microsoft shares were last seen 2% lower.
9.14am: The morning so far
As the world grapples with a debilitating technical hiccup of gargantuan proportions, blue-chip stocks in London are taking a clobbering.
Global transport, communications, web and emergency networks were thrown into disarray following what Microsoft Corp (NASDAQ:MSFT) has dubbed a “flawed anti-viral update” to its platform.
In the UK, train operator Govia has warned of widespread cancellations.
The London Stock Exchange managed to open as expected, though it was a mixed blessing, with the FTSE 100 plummeting 50 points in the first hour.
Losses were fairly sector agnostic, with top fallers including Burberry Group PLC (LSE:BRBY), Fresnillo PLC (LSE:FRES), Entain PLC (LSE:ENT), Glencore PLC (LSE:GLEN) and Frasers Group PLC (LSE:FRAS).
Retailers are off due to vastly underwhelming retail sales figures from the ONS. Sales in the UK declined 1.2% month over month in June, a threefold undershoot against the 0.4% slip expected by analysts.
Lower interest payments on inflation-linked debt cut government borrowings to the lowest monthly for June for five years, the ONS also said today.
UK borrowing in June was £14.5 billion or down by £3.2 billion from a year ago and the lowest June borrowing total since June 2019.
Elsewhere on the company news front, wealth platform Hargreaves Lansdown avoided any mention of a contentious takeover approach from private equity firm CVC Partners in a fourth-quarter trading update posted today.
Hargreaves stuck to the numbers in today’s update, noting stronger share-dealing volumes and record assets under management of £155.3 billion. Shares were down 0.6%.
8.50am: UK train disruption warning
Southern, Thameslink, Gatwick Express and Great Northern operator Govia has given a bleak warning to UK commuters hoping to travel this morning.
Govia posted this on social media: “We are currently experiencing widespread IT issues across our entire network.
“Our IT teams are actively investigating to determine the root cause of the problem.
“We are unable to access driver diagrams at certain locations, leading to potential short-notice cancellations, particularly on the Thameslink and Great Northern networks.
“Additionally, other key systems, including our real-time customer information platforms, are also affected.
“We will provide additional updates when we can. In the meantime, please regularly check your journey before you travel.”
8.29am: Blue chips falter
Whether due to the Microsoft outage, poor retail sales or sweeping repricings on Wall Street, the FTSE 100 blue-chip index fell 50 points in opening trades.
Some of the biggest fallers include Burberry Group PLC (LSE:BRBY), Entertain plc, easyJet and LD Sports Fashion plc.
8.26am: Microsoft issue causes global headache
An apparent “flawed anti-viral update” at Microsoft has caused turmoil across the globe, with banks and IT systems crippled, planes grounded and Sky forced off air.
A cloud services outage overnight caused chaos in the US overnight with emergency lines reportedly down, only for massive IT problems to hit Australia and now Europe.
Microsoft announced on its social media accounts that it was "investigating an issue impacting users' ability to access various Microsoft 365 apps and services".
Ryanair has warned of a “third party IT issue” affecting “all airlines operating across the network”, while Gatwick Airport has warned of cancellations.
⚠️ We are currently experiencing widespread IT issues across our entire network. Our IT teams are actively investigating to determine the root cause of the problem.
We are unable to access driver diagrams at certain locations, leading to potential short-notice cancellations,…
— Gatwick Express (@GatwickExpress) July 19, 2024
Cybersecurity giant Crowdstrike has also suffered a major outage.
At the time of writing, the London Stock Exchange was in working order. Proactive will keep updating as more news becomes available.
8.08am: Netflix fumbles
There was good and bad to be gleaned from Netflix’s second-quarter trading update published overnight.
Typically, adding 3.4 billion more subscribers than expected – as was the case in the second quarter – would be met with glee, but shares in the streaming giant went in the exact opposite direction.
This was down to weaker-than-expected guidance for the third quarter, with Netflix expecting revenue of $9.73 billion, below the $9.83 billion expected by Wall Street analysts.
Netflix shares closed 0.7% lower and took a steep post-market dip, though more recent pre-market trades have been more bullish.
7.54am: Retail sales plummet
Retail sales for June came in far below expectations in today’s monthly update by the Office of National Statistics.
Sales in the UK declined 1.2% month over month, a threefold undershoot against the 0.4% slip expected by analysts.
It follows a 2.9% rise in May.
Poor June weather took the blame for underwhelming sales among department stores, clothing, footwear and furniture retailers.
But online sales bore the brunt of the shoddy monthly trading conditions, falling 2.7% compared to May.
The June print was more flattering on a year-on-year basis, slipping just 0.2%.
7.34am: Hargreaves Lansdown mum on takeover bid
Wealth platform Hargreaves Lansdown avoided any mention of a contentious takeover approach from private equity firm CVC Partners in a fourth-quarter trading update posted today.
CVC has tabled a £5.3 billion offer to buy the company. While the board is open to the idea, some voters have hit back at what they see as a low-ball bid that is unfair to smaller shareholders.
Hargreaves stuck to the numbers in today’s update, noting stronger share-dealing volumes and record assets under management of £155.3 billion.
Competitor AJ Bell similarly noted highest share-dealing volumes when it updated on Thursday.
Hargreaves added 24,000 new clients in the quarter, spread across its SIPP, ISA and Active Saving products.
“Our ongoing focus on client service, client experience and value continue to deliver results, with client NPS for the second half of the year, which includes the busy tax year end season at 44, up from 41 for the first half of the year,” said Hargreaves’ chief executive Dan Olly.
7.15am: Biden pressure weighs on market
The FTSE 100 is expected to slip 30 points when trading commences today, wiping out yesterday’s 20-point advance.
Stocks took a bit of a late-afternoon hit after mounting pressure on US president Joe Biden to step down sent Wall Street stocks lower.
Here in London, wealth platform Hargreaves Lansdown is following competitor AJ Bell with a trading update while markets will be digesting the latest retail sales and public sector net borrowing data.