- FTSE 100 up 61 points
- Rate cut boosts housing market
- Job vacancies climb in July
3.52pm: Barratt tops FTSE 100 risers as Redrow takeover looms
Barratt Developments PLC (LSE:BDEV) climbed 3.1% on Monday and top of the FTSE 100’s daily risers after signalling earlier in the day that its proposed takeover of Redrow PLC (LSE:RDW) would soon be complete.
The housebuilders announced in a joint statement this morning that their proposed tie-up could be finalised this week, seeing FTSE 250-listed Redrow also climb during the day.
Miners remained among the FTSE 100’s risers in the meantime as they regained on declines seen over the past week, while BAE Systems PLC (LSE:BA.) and Rolls-Royce Holdings were stuck in the red late on.
The defence firms had taken a hit earlier in the day on reports Germany was to stop directly financing new military aid for Ukraine.
Overall, London's blue chips added 61 points to reach 8,372.
Elsewhere, US stocks continued to trade higher after Monday’s open, with the Dow Jones enjoyed a 0.5% gain, while markets across Europe were also in the green.
Gold also retook its spot above US$2,500, having surpassed the mark for the first time late last week.
Come Monday afternoon, the yellow metal was trading at US$2,503 per ounce following a dip during the day and just off its record of US$2,509, seen on Friday.
This came on growing expectations for base rate cuts in the US, alongside heightened tensions in the Middle East, seeing the dollar slip 0.26% on the pound to 0.7705p.
3.37pm: S&P 500 could hit 6,000 this year, Goldman Sachs says
Goldman Sachs analysts have projected the S&P 500 to hit 6,000 points this year after sentiment toward US stocks bounced back last week following a sell-off earlier in August.
According to the Wall Street bank, “the bar for being bearish [...] is high” as systemic funds re-leverage and volatility-targeting put positions are wound down.
Some US$27 billion could flow into US stocks over the coming weeks as a result, Goldman said, ahead of a typically worse period in September but likely growth later in the year.
JPMorgan analysts echoed optimism toward the S&P 500, highlighting the likes of solid retail and unemployment data last week, alongside positive earnings reports in the US.
“While upside appears to be more muted than when we adopted this stance earlier this year, there remains material upside,” the bank said.
An average 4.2% return was forecast for the US benchmark over the final quarter, as the likes of Federal Reserve base rate cuts come into play.
2.56pm: Wall Street climbs early on
US stocks enjoyed a positive start on Monday morning, as the Dow Jones, S&P 500 and Nasdaq looked to build on gains seen last week on growing hopes for base rate cuts soon.
The Dow Jones ticked up 142 points to 40,802 as the market opened, while the S&P 500 and Nasdaq added 9 and 26 points respectively.
This comes after a string of positive economic data last week helped fuel a week-long recovery for stocks, following a sell-off on fears earlier in the month that the US economy was heading for recession.
Figures also boosted expectations for base rate cuts by the Federal Reserve, with two policymakers at the central bank, Neel Kashkari and Mary Daly, signalling on Monday that debates could now be had over a reduction in September.
Minneapolis Fed President Kashkari noted “the balance of risks” had now shifted in the US following solid retail and unemployment data last week, alongside figures showing inflation was subsiding.
San Francisco Fed President Daly had said earlier on Monday that it was time to start considering base rate cuts.
2.30pm: FTSE 100 moves in positive territory
The FTSE 100 rebounded into Monday afternoon, racking up a 26-point gain to reach 8,337 after slipping early on amid a quiet day of company news.
Miners including Glencore PLC (LSE:GLEN), Anglo American PLC (LSE:AAL) and Rio Tinto PLC sat among the day’s risers as they reversed on declines seen over the past week.
JD Sports Fashion PLC (LSE:JD.) led the way though, racking up a 2.6% gain, as rival retailers Next PLC (LSE:NXT) and Frasers Group PLC (LSE:FRAS) also climbed.
BAE Systems PLC (LSE:BA.) and Rolls-Royce Holdings PLC (LSE:RR.) remained off the mark in the meantime, following reports Germany was to cut back on military support for Ukraine.
2.17pm: DIY investors eye riskier strategies as confidence returns to market - survey
Retail investors are set to take on increasing levels of risk over the coming months as confidence seeps back into the UK market, according to Charles Stanley (LSE:CHAS).
Some 42% of respondents to a survey said they would take on a higher than usual level of risk over the next three months, the investment management firm said on Monday.
This was as optimism toward the London market picks up, according to Charles Stanley (LSE:CHAS), with 40% of those surveyed saying they had increased exposure to the FTSE 100 over the last three months.
“Investors are currently recovering from a tough few years, full of economic uncertainty, political turmoil, and market volatility,” Charles Stanley (LSE:CHAS) analyst Rob Morgan commented.
“Now, the future looks bright, with expectations for higher growth, lower interest rates, and something that looks suspiciously like stability.”
Having surveyed 1,007 ‘DIY’ investors who choose their own portfolios, Charles Stanley (LSE:CHAS) added 35% had increased exposure to the FTSE 350 in recent months, while 28% did so for London’s Alternative Investment Market.
1.24pm: Wall Street seen slightly higher
Wall Street looked set to tick up on Monday’s opening bell, after a string of positive economic data drove a recovery last week following a global sell-off earlier in the month.
Futures had the Dow Jones just above the mark ahead of the opening bell, while the Nasdaq and S&P 500 also looked set to slightly tick up.
Shares had enjoyed gains last week as solid retail and weekly unemployment data, alongside figures showing inflation was moderating, appeared to quell fears that the US economy could be heading for recession on weak jobs figures previously.
Following the return of calm to the markets, this week brings a quieter schedule, with any indications on rate cuts from central bankers at Jackson Hole set to be in focus.
Last week’s data left markets pricing in a rate cut from September, though economists are still split over the depth of the reduction.
Among companies, Estee Lauder dipped over 3% in pre-market trading on Monday after the cosmetics firm underwhelmed with its 2025 outlook on weakness in China.
Palo Alto Networks ticked up by 0.6% in the meantime, ahead of the cybersecurity company’s own fourth-quarter update later today.
12.54pm: Pub numbers finally pick up
Pub and licensed premises numbers picked up for the first time in two years over the second quarter, marking a turnaround for Britain’s embattled hospitality sector.
The number of UK pubs, bars, restaurants, clubs and hotels ticked up by 0.5% between March and June to 99,207, CGA by NIQ and AlixPartners data showed on Monday.
This marked a net increase of 462 venues and the first uptick in two years since surging living costs began to plague the sector... Read more
12.11am: Gold could hit $2,600 by year-end - analyst
Gold is set to continue enjoying a rally this year which has taken the yellow metal above the US$2,500 per ounce mark for the first time in recent days.
After gold hit a record US$2,509 on Friday and also opened the new week above the mark, UBS said on Monday that further gains were in store.
“Despite gold having hit a new record high, we expect prices to move even higher over the coming months,” analyst Giovanni Staunovo noted.
According to the bank, gold is forecast to top US$2,600 by the end of the year, driven by expectations the Federal Reserve will cut interest rates over the coming months... Read more
11.44am: Water sector facing £2 billion in fines - Moody's
Water firms risk being hit with £5 billion worth of fines over the next five years as regulators clamp down on sewage issues.
Rating agency Moody’s forecast tougher regulation by Ofwat would result in a flurry of fines over the coming years, “based on Ofwat's draft determination and if companies perform in line with their business plan assumptions”.
Many water firms are already struggling with high debt, including 16 million customer-strong Thames Water, which is said to only have enough cash to last until May... Read more
11.13am: Job vacancies tick up as labour market builds strength
Job vacancies ticked up in July for the first time this year as employers stepped up advertising for roles in a positive sign for the UK’s labour market.
According to search portal Adzuna, the number of jobs being advertised climbed by 1.1% month on month to 862,043 in July.
Jobs seekers per vacancy also improved, reaching 2.09, meaning the UK labour market was at its most competitive level since May 2021.
Adzuna data science head James Neave noted the figure reflected “optimism about the UK economy” after other surveys have shown declining job postings in previous months... Read more
10.08am: Goldman Sachs cuts odds of US recession
Goldman Sachs has lowered the odds of a US recession to 20% from 25% just two weeks after increasing expectations.
Following solid retail sales and weekly unemployment data late last week, the Wall Street bank said the chances of the US slipping into recession over the next year were lower.
Goldman had hiked odds from 15% to 25% earlier this month on the back of weak job market data, which subsequently caused a global sell-off in stocks.
“Data for July and early August released since August 2 shows no sign of recession,” the bank reassured though, with better figures coinciding with a recovery for global markets.
9.46am: BAE Systems, Rolls-Royce drop as Germany reportedly mulls Ukraine support
BAE Systems PLC (LSE:BA.) and Rolls-Royce Holdings PLC (LSE:RR.) sat among the FTSE 100’s biggest fallers on Monday following reports Germany was looking to cut military support for Ukraine.
BAE fell 2.6% early on, while Rolls-Royce fell by 1.9%, on the back of news Germany could stop sending new aid to Ukraine under government cutbacks.
According to The Frankfurter Allgemeine Zeitung, the German Finance Ministry is looking to scale back on support for Ukraine as part of budget savings this year.
The ministry has reportedly disputed such claims, suggesting instead that bilateral support for Ukraine would be redirected to international programs, including efforts funded by frozen Russian assets.
9.25am: Gold holds above US$2,500
Gold remained within record-breaking territory on Monday morning, after surpassing the US$2,500 per ounce mark for the first time late last week.
The yellow metal was trading at US$2,506 in the morning, having hit a peak and new all-time high of US$2,509 on Friday.
This was as expectations built for a base rate cut in the US by the Federal Reserve over the coming months, with the dollar dropping 0.17% on the pound to 0.7712p.
Weak US housing market data late in the week had fuelled rate cut hopes, with a reduction in September now widely expected.
Hargreaves Lansdown analyst Susannah Streeter noted heightened global tensions, including in Eastern Europe and the Middle East, were also pushing up demand for gold.
“While a lower dollar helps boost demand for the commodity, the uncertain outcome of ongoing conflicts is also pushing up appetite for the safe haven asset,” she said.
“Ukraine’s incursions into Russia continue, with unknown repercussions, and as negotiations for a ceasefire in the Middle East look set to reach a decisive moment.”
9.14am: Plus500 gains after guiding for expectation-beating results
Plus500 Ltd (LSE:PLUS) climbed over 4% on Monday morning after hiking its dividend and announcing full-year results would beat expectations in interim results.
Full-year trading will be “ahead of current market expectations,” the group said Monday, as increased shareholder rewards were unveiled on an uptick in first-half profit… Read more
The trading platform gained 4.4% following the report to take the lead as the FTSE 250’s biggest riser for the day.
8.59am: Energy price cap set to rise in October
Energy prices will jump in October as the UK approaches the colder winter months, according to consultancy Cornwall Insight.
Ofgem’s price cap is expected to climb by 9% from £1,568 to £1,714 come the autumn, reflecting the typical amount a British household would pay on an annualised basis.
This comes after volatility within the global energy market, Cornwall said, as gas prices have climbed in recent months and been driven by Ukraine’s incursion into Russia most recently.
The October cap will determine energy unit prices for the remaining three months of the year, with costs having sat at their lowest for two years between July and September.
Cornwall added that an increase in prices ahead of the winter was always expected, but warned further volatility could emerge as fighting continues between Russia and Ukraine.
“While we don't expect a return to the extreme prices of recent years, it's unlikely that bills will return to what was once considered normal,” principal consultant Craig Lowrey said.
He added: “Without significant intervention, this may well be the new normal,” with Ofgem’s cap having sat lower before the war at £1,277 in October 2021.
Ofgem is set to officially announce the cap price for October this Friday.
8.33am: FTSE 100 falls early on
London’s blue chips started off the week in the red, falling 9 points to 8,302 as trading got underway on Monday and adding to a decline seen on Friday.
This comes after stocks last week largely recovered from a global sell off earlier in the month, which had been prompted by fears over the US economy on weak job market data.
Frasers Group PLC (LSE:FRAS) and DS Smith PLC (LSE:SMDS) were among top risers on Monday morning, climbing 2.4% and 2% respectively, while BAE Systems PLC (LSE:BA.) slipped 2% to lead fallers.
8.16am: Buyers flock back to housing market after BoE rate cut
A cut to base interest by the Bank of England earlier this month has led to an immediate surge in buyers returning to the housing market, according to Rightmove PLC (LSE:RMV).
Following an 11% uptick in July, the number of prospective buyers contacting estate agents has climbed by 19% since the first of August, the property portal said Monday.
This led Rightmove to up its forecast for house prices to climb by 1% over 2024, against -1% previously.
The number of sales agreed over the year so far is up 16% on 2023, while new sellers coming to market has increased by 5%, the group added.
“The first bank rate cut since 2020 has sparked a welcome late summer boost in buyer activity,” Rightmove director Tim Bannister commented.
“While mortgage rates aren’t yet substantially lower since the rate cut, the fact that the long-hoped-for first cut has finally arrived, and mortgage rates are heading downwards, is positive for home-mover sentiment.”
Average prices of properties coming to market fell by 1.5% to £367,785 between July and August, Rightmove said, in line with drops seen over the period historically.
Bannister added: “The conditions are there for a more active autumn market.”
7.57am: Barratt-Redrow merger set to be completed this week
Housebuilder’s Barratt Developments PLC (LSE:BDEV) and Redrow PLC (LSE:RDW) are set to complete a tie-up over the coming days, the duo have announced.
The proposed £2.5 billion takeover of Redrow by Barratt had previously come under the gaze of the Competition and Market Authority, which launched a Phase 1 investigation in March.
But the CMA stopped short of pursuing a Phase 2 investigation after concluding that the duo has a "high combined share" in just one local area of Whitchurch, Shropshire… Read more
7.52am: Strike threshold laws to be scrapped
Laws meaning strikes can only go ahead if a certain proportion of union members vote in favour of action are set to be scrapped in the UK.
This is as Britain’s new Labour government presses ahead on pledges to reverse the Trade Union Act, with The Telegraph reporting rules could be tabled by mid-October.
These require half of a union’s membership to vote in ballots for a strike to be legal, while 40% of those in public services unions have to approve action.
7.35am: Ted Baker to shut remaining stores
Ted Baker is set to close its remaining UK and Irish stores in the coming days, placing over 500 jobs at risk.
All 31 of the fashion brand’s stores in the region are expected to be shut by Tuesday after Ted Baker’s UK holding company, No Ordinary Designer Label, fell into administration in March.
Some 15 stores, alongside 245 jobs, were axed in April, with talks over a potential licensing deal with Sports Direct owner Frasers Group PLC (LSE:FRAS) being held more recently.
These are said to have stalled in recent months, however, according to Sky News.
Over 500 people still work across the fashion brand’s stores and head office, with these jobs in doubt as the remaining stores are closed by administrators.
Ted Baker was taken off the London Stock Exchange in 2022 after being acquired by US-based Authentic Brands Group for around £210 million.
This was after founder Ray Kelvin left Ted Baker in 2019 over claims of inappropriate behaviour, which preceded a string of profit warnings during the pandemic.
7.11am: Stocks seen lower
The FTSE 100 looked set to fall on Monday, following a recovery last week after fears over the US economy had hit stocks globally earlier in August.
Futures had London’s blue chips falling 16 points on Monday morning in what is set to be another quiet day for companies on the reporting front.
FTSE 250-listed Plus 500 Ltd is among the few set to report in London, before Estee Lauder Companies Inc (NYSE:EL, ETR:ELAA) and Palo Alto Networks Inc (NYSE:PANW, ETR:5AP) in the US.
Asian markets saw a mixed showing overnight, with Shanghai just above the mark and Japan’s Nikkei 225 slightly off.