- Blue-chip index up 85 points
- US markets to open higher as new iPhone launch nears
- Entain rallies
4.02pm: FTSE 100 marks solid start to week
London’s premier index has started the week on a strong note, having added some 85 points to 8,266 as Monday trades come to a close.
Entain PLC (LSE:ENT) led the charge, having rallied as much as 8% in intraday trades. Though the betting giant has fallen back a bit, it is still set to close the day in the mid to high single digits.
Beleaguered Burberry Group PLC (LSE:BRBY) was the blue-chip index’s biggest drag, having shed 4.5% following numerous downgrades, including one from Barclays.
Other top risers included Melrose Industries PLC (LSE:MRO, OTC:MLSPF) and JD Sports Fashion PLC (LSE:JD.), while other big fallers included Pearson PLC (LSE:PSON) (off 1.2%) and Primark owner Associated British Foods PLC (LSE:ABF) (off 1%).
In the US, tech stocks surged higher as the market awaits the unveiling of the new iPhone 16 handset.
3.47pm: HSBC’s new boss contemplating dramatic company shakeup
HSBC Holdings PLC (LSE:HSBA) is contemplating a merger of its commercial and investment banking divisions as part of recently appointed chief executive Georges Elhedery's cost-cutting drive.
According to a Bloomberg report citing “people familiar with the matter”, the move would create HSBC's largest revenue generator, contributing approximately $40 billion annually.
The potential restructure would integrate HSBC’s global banking and markets division with its commercial banking arm.
No final decisions have been made, and details could still change, said Bloomberg.
Elhedery, in his first town hall company meeting after taking over as boss earlier this month, stated that cost control is his big priority
HSBC shares rose immediately following the report. At the time of writing, the stock was 2.14% up from Friday’s close.
3.30pm: GSK drug promotes ‘significant and clinically meaningful reduction’ in asthma symptoms
British pharmaceuticals giant GSK PLC (LSE:GSK, NYSE:GSK) has presented late-breaking data at the European Respiratory Society (ERS) International Congress, highlighting a 54% reduction in severe asthma exacerbations in patients treated with depemokimab.
The findings are based on the Phase III AReS study, which focused on patients with eosinophilic asthma.
Depemokimab, an IL-5 inhibitor developed by GSK, is administered twice yearly.
The treatment aims to improve patient outcomes while reducing the number of injections.
According to the company, depemokimab “delivered a statistically significant and clinically meaningful reduction in exacerbations over 52 weeks versus placebo plus standard of care.
Kaivan Khavandi, AGK’s global head of respiratory/immunology R&D, said: “With a dosing schedule of just two injections per year, depemokimab has the potential to be the first approved ultra-long-acting biologic with six-month dosing.
“This could offer physicians and millions of patients with severe asthma an option that provides reassurance of sustained suppression of a key marker of type 2 inflammation and a reduction in the rate of exacerbations and hospitalisation – the fundamental treatment goal in asthma.”
GSK shares moved 0.5% higher in late Monday exchanges.
2.55am: US chip stocks on the move
The Nasdaq 100 surged a full percentage point when US markets opened on Monday, which has served to claw back last week’s substantial losses for the tech-focused index.
Arm Holdings PLC (NASDAQ:ARM) shot to the top of the movers table with a 4.3% gain. This comes as Apple Inc (NASDAQ:AAPL, ETR:APC) prepares to unveil its latest iPhone 16 model, which incorporates Arm’s latest chip designs.
Fellow chipmakers Marvell, Nvidia, Qualcomm and Texas Instruments were also well bid in early trades.
The Dow Jones Industrial Average is up 0.75% and the broader S&P 500 index has moved 0.9% higher.
2.44pm: UK financial watchdog takes gas off greenwashing deadline
The Financial Conduct Authority has kicked back its deadline for firms to comply with the Sustainability Disclosure Requirements (SDR) regime.
Introduced last November, the SDR regime includes new standards for investment funds, particularly around naming and marketing practices for sustainability-related products.
These rules are designed to ensure that funds using terms like ‘sustainable’ or ‘impact’ accurately reflect their sustainability characteristics.
They have been introduced following allegations of ‘greenwashing’, referring to the practice of making false, misleading, or exaggerated claims about a product, service, or company’s environmental or sustainability benefits.
The labelling rules officially take effect on 2 December, but the FCA is allowing for temporary flexibility until 2 April 2, 2025, for those needing more time to align with the ‘naming and marketing’ rules.
Chris Cummings, chief executive of the Investment Association stated: "We are pleased that the FCA has listened to industry and granted investment management firms additional time to comply with the SDR investment labelling rules.
“Our industry has been working hard and at pace to implement the SDR requirements, which will raise standards and improve confidence for investors in the market for sustainable investments.
Today's announcement will provide firms seeking to apply labels to funds with the much-needed additional time to work together with the regulator to comply with the new regulation.
“We will continue to work constructively with the FCA and support our members to meet these deadlines, noting the more limited extension for firms complying with the 'naming and marketing' rules."
2.14pm: Apple iPhone 16: What to expect
Apple Inc (NASDAQ:AAPL, ETR:APC) is set to reveal the iPhone 16 today, with AI features expected to be a key highlight.
New models, including Plus, Pro, and Pro Max, as well as the latest Apple Watch and AirPods, are also anticipated.
A major focus will be on how Apple’s AI system, called Apple Intelligence, integrates into its products.
Apple has already introduced AI-enabled features to iPhone 15 Pro models in the US, including upgrades for Siri, writing tools, and image generation.
The upcoming devices are expected to feature the faster A18 chip based on Arm Holdings' latest design.
Apple’s new iOS 18 software is also set for release, bringing AI to users outside the US, though rollout details are still uncertain.
Additionally, rumours suggest new design features, including a photo button on the iPhone’s side.
Pricing for the iPhone 16 is expected to start at around US$799 in the US, similar to the iPhone 15.
The launch is set for 10am Pacific, 1pm Eastern and 6pm British summer time. Read more in our preview.
1.24pm: US markets show signs of recovery following bearish week
The Dow Jones Industrial Average is expected to add 0.6% the trading commences on Monday, which should help to offset a bruising previous week.
The broader S&P 500 index is also set to open 0.6% higher, while the tech-focused Nasdaq 100 is tipped to open 0.7% higher, per pre-market futures contracts.
Nasdaq has a steep hill ahead if it hopes to recover the 5.5% worth of losses chalked up across the previous week.
The sell off was largely driven by tech stocks like Nvidia, which corrected by a walloping 13%.
On the macroeconomic calendar, wholesale inventories are forecast to add 0.3% month on month.
Apple Inc (NASDAQ:AAPL, ETR:APC)’s hotly anticipated unveiling of the new iPhone 16 handset will be the point of focus on the company news front.
Key to the latest launch, set for 10am Pacific, 1pm Eastern and 6pm British summer time, will be how AI software, dubbed Apple Intelligence, fits in with these new products.
These included a ChatGPT-powered version of speech recognition software Siri, AI-enabled writing tools and image-generating technology.
Back in London, the FTSE 100 is currently 50 points higher at 8,230.
1.12pm: Isaacs has ‘put a rocket’ under Entain’s share price
Ladbrokes owner and BetMGM partner Entain PLC (LSE:ENT) remains in high spirits with shares trading near three-month highs following a trading update.
The FTSE 100-listed bookmaker reported that year-on-year growth had returned to the online business in the UK and Ireland earlier than expected, across both gaming and sports betting, with its international divisions also said to have maintained positive trading.
Here’s what AJ Bell’s investment director Russ Mould said of the update: “Gavin Isaacs has only been chief executive of gambling group Entain for a week and he’s already managed to issue a trading update that’s put a rocket underneath the share price.
“Trading has been good in recent months, helping to restore market confidence in the company’s ability to bounce back after a patchy few years.
“Isaacs will certainly welcome a more positive backdrop as there was a big risk he was wading immediately into quicksand on the first day of the job, having to fight hard to stop the business sinking further into the ground.
“Entain has had a problematic few years, dealing with a bribery investigation and allegations that it overpaid for acquisitions which haven’t lived up to expectations.
“The business has been circled by activist investors hoping to push through change and score an easy win, particularly as the share price had fallen by 75% between September 2021 and August 2024. So much bad news has been priced into the company’s valuation that it might only take the smallest bit of positivity to drive a recovery rally, just as we’re seeing from the latest trading update.”
Shares are up 8.2% to 692p.
1pm: Pound dips as super Fed rate cut expectations slashed
The pound dipped to a three-week low against the US dollar on Monday, with the GBP/USD pair trading at 1.208 at the time of writing.
It comes amid a scaling back of the market’s expectations of a 50-basis-point rate cut from the US Federal Reserve later this month.
While an interest rate cut is all but a foregone conclusion, the jury is still out of whether a 0.25% or 0.5% cut is in store.
The latter’s odds have been reduced following a mixed US payrolls report last Friday
Higher interest rates are typically supportive of a currency’s value as they encourage traders to buy into the money markets to gain exposure to healthy yields.
The Fed is scheduled to make its next call on 17 September.
As for UK stocks, the FTSE 100 remains bullish in early afternoon trades and is currently trading 58 points higher at 8,238.
12.45pm: Brent crude forecasts slashed by Morgan Stanley (NYSE:MS)
Morgan Stanley (NYSE:MS) has lowered its Brent crude oil price forecasts, citing a weakening demand outlook similar to patterns observed during past recessions.
The bank now expects Brent prices to remain at $75 per barrel for all quarters in 2024, down $5 from its previous forecast for the fourth quarter.
Brent crude futures recently settled at $71.06 per barrel, marking their lowest level since December 2021.
Morgan Stanley (NYSE:MS) noted that rising fuel inventories, weaker refining margins, and a drop in price spreads signal softening demand, which is consistent with prior periods of economic downturns such as the 2008 financial crisis and the COVID-19 pandemic.
11.57am: Flutter’s FanDuel retains dominant position in US sports betting market
Paddy Power and FanDuel owner Flutter Entertainment PLC (LSE:FLTR)’s secondary share listing on the London Stock Exchange is well bid this Monday, with the stock adding 1.75% to 16,315p.
In a broker note, Jefferies analysts remarked that FanDuel continues to outperform its competitors in the US.
For August, FanDuel secured 42% of the gross gaming revenue (GGR), maintaining its dominance despite a slight year-on-year decline.
Its primary competitors, DraftKings and BetMGM, held 32% and 6% of the GGR share, respectively.
Jefferies noted that FanDuel's position allows it to benefit from the ongoing growth in the US online sports betting (OSB) market.
American Football remains the most important sport for US sportsbooks, generating 26% of OSB handle and GGR in 2023, noted analysts.
11.23am: AIC floats idea of government-sponsored investment companies
The Association of Investment Companies (AIC) has proposed the creation of government-sponsored investment companies aimed at boosting UK economic growth.
According to a new paper titled ‘Making people better off’, these partnership funds could help achieve national goals such as the transition to net zero, regional economic growth, and the advancement of new technologies.
AIC proposes making the new National Wealth Fund a cornerstone investor in these funds.
Under the proposals, the shares of these companies would be listed on the London Stock Exchange, allowing both the public and institutional investors, including pension schemes, to participate.
Richard Stone, Chief Executive of the AIC, said: “Investment companies provide a tried-and-tested way of overcoming the practical challenges of investing in infrastructure and new technologies.
“Their permanent capital structure removes the need to redeem investors’ units when they want to sell and therefore facilitates stable, long-term decision-making.
“As well as offering permanent capital, investment companies have independent governance and offer liquidity through the stock market – a combination of features that could be attractive to pension funds, other institutions and the general public, as well as to the government.”
The AIC also put forward several policy recommendations, including abolishing stamp duty on investment company shares and creating a regulatory environment that fosters transparency and investment in scaling up companies.
11.10am: Ryanair boss slams Gatwick ATC once again
Ryanair Holdings PLC (LSE:RYA)’s outspoken boss Michael O’Leary has renewed calls for Martin Rolfe, chief executive of air traffic controller Nats, to step down.
His plea follows another bout of weekend chaos at Gatwick in which at least 100 flights were cancelled, affecting around 15,000 passengers.
The cancellations were put down to staff shortages at Nats.
O’Lary called it “the latest in a long line of cock-ups” by the air traffic controller, which also saw easyJet PLC, Wizz Air Holdings PLC (AIM:WIZZ) and International Consolidated Airlines Group SA (LSE:IAG)-owned British Airways flights affected.
Nats has previously stated it was “working in line” with a staffing plan agreed alongside Gatwick after the firm took over air traffic operations at the airport in 2022.
“Airlines and passengers deserve better,” said O’Leary.
Ryanair’s Euronext-listed shares were off 2.2% on Monday.
The FTSE 100 in London remained 56 points higher at 8,237 at last count.
10.48am: Hostmore shares collapse
Checking in on the small-cap space, Hostmore PLC (LSE:MORE)'s share price collapsed by over 90% after the restaurateur announced it would no longer pursue its planned acquisition of TGI Fridays.
Hostmore, which is the largest franchisee of the TGI Fridays restaurants, tabled a £177 million paper deal to effectively merge with the franchisor in April.
But it has walked away from the ambitious deal after TGI lost control of a key revenue stream, severely impacting its future earnings potential.
Time was called on talks after the American group was removed as the manager of TGIF Funding, the entity that controls the royalties from franchise agreements and intellectual property.
This was seen as central to the Hostmore transaction.
Hostmore is now valued at less than £1 million following the dramatic share repricing.
10.03am: ASOS snubbed Shein
A weekend report from The Sunday Times disclosed that ASOS PLC (LSE:ASC) rejected an offer for its Topshop and Topman brands from Chinese fast-fashion giant Shein and Reebok owner Authentic Brands Group.
Notably, the Shein-ABG offer was reportedly £215.5 million- considerably more than the £118 million ASOS will get via the joint venture recently established with Danish multinational clothing business Bestseller.
Bestseller’s holding company Heartland, which was already a major ASOS shareholder, will control 75% of the joint venture with ASOS controlling the rest.
As part of the deal, ASOS will retain distribution rights for Topshop and Topman in exchange for a royalty fee.
The topshop.com web portal, which went offline in 2020 after the business went into administration before being acquired by ASOS in 2021, will relaunch within six months of the joint venture transaction closing.
9.38am: Burberry shares plumb new depths
Burberry shares continue their terminal decline with another 5% knocked off the British luxury label this morning.
At 571p per share, it means Burberry’s valuation has retraced to lows not seen since November 2009- nearly 15 years ago.
Burberry is expected to leave the FTSE 100 at the next reshuffle on 23 September in place of insurer Hiscox Ltd (LSE:HSX).
The company has hit roadblock after roadblock amid a sluggish global rebound in the luxury sector, a departing chief executive and a suspended dividend, all of which have led to a dramatic repricing of the stock.
9.17am: Computacenter shares fall 5%
FTSE 250-listed IT group Computacenter fell 5% this morning after disclosing a drop in interim sales, profits and cash generated.
Sales in the six months to end June 2024 were down 11.6% at £3.1 billion while pre-tax profits fell 31% to £84 million. Cash generated crashed 99%.
Mike Norris, chief executive, added: "Our performance in the first half largely reflected the expected normalisation of Technology Sourcing volumes against an exceptionally strong comparative.”
The second half had started better, he added.
“We have made an encouraging start to our third quarter and continue to expect stronger momentum in the second half, resulting in progress in the full year on a constant currency basis."
Shares were last seen at 2,458p.
8.58am: The morning so far
The FTSE 100 opened in high spirits on Monday, having added up to 50 points in the opening hour.
It marks a turnaround for the blue-chip index following a consistently bearish week prior.
Ladbrokes-owner Entain PLC (LSE:ENT) led the morning charge with a 7% gain following an optimistic trading update showing that that online net gaming momentum outpaced expectations in the third quarter.
Morning gains were fairly evenly distributed elsewise, with Melrose Industries PLC (LSE:MRO, OTC:MLSPF), JD Sports Fashion PLC (LSE:JD.), Lloyds Banking Group PLC (LSE:LLOY), Barratt Developments PLC (LSE:BDEV), easyJet plc and NatWest Group PLC (LSE:NWG) all eking out low-single-digit gains.
Lloyds and Barratt were bid higher following news of a joint venture with Homes England to create the MADE Partnership, which will focus on developing large sites “to help deliver thousands of much needed new homes across the country”.
According to the press statement, MADE will act as master developer for multiple large scale, residential-led developments from 1,000 to more than 10,000 homes along with a variety of community facilities and employment uses.
Outside of the FTSE 100, budget supermarket chain Aldi pledged £800 million to accelerate its expansion plans in the UK.
It comes as new financial figures show annual sales increased by more than 15% to £17.9 billion in 2023, representing its highest ever period of sales growth.
Perhaps the plans will help with faltering employment figures- According to a new report from KPMG and the Recruitment and Employment Confederation (REC), recruitment for both permanent and temporary job placements continuing to fall in August.
Permanent job placements registered their softest decline since April 2023, while temporary job appointments fell for the 12th consecutive month.
8.35am: Entain rallies
Ladbrokes owner Entain PLC (LSE:ENT) continues to climb after announcing that online net gaming momentum outpaced expectations in the third quarter.
The FTSE 100-listed bookmaker also reported that year-on-year growth had returned to the online business in UK and Ireland earlier than expected, across both gaming and sports betting, with its international divisions also said to have maintained positive trading.
Entain also flagged recent enhancements to its US joint venture BetMGM’s sports betting offer as the new NFL season kicks off, with enhanced ‘parlay’ bet combinations and individual player ‘prop offerings’, as well as new live betting and bet slip features.
Shares were up 7% to 684.42p.
8.22am: FTSE 100 surges
The FTSE 100 pared back a chunk of last week's losses when markets opened on Monday. In opening exchanges, the blue-chip index was up 50 points to 8,233.
Entain was far and away the biggest riser with a 6% gain following a trading update.
8.15am: Jobs market cools in August
The UK labour market showed further signs of weakness in August 2024, with recruitment for both permanent and temporary job placements continuing to fall, according to the latest survey from KPMG and the Recruitment and Employment Confederation (REC).
The report cited economic uncertainty, inflationary pressures, and a focus on cost control as the main factors behind the ongoing hiring slowdown.
Permanent job placements registered their softest decline since April 2023, while temporary job appointments fell for the 12th consecutive month.
On a positive note, candidate availability has improved, with more job seekers entering the market due to layoffs and people actively searching for new opportunities.
Despite this, wage growth remains strong, though it has started to ease, particularly for permanent roles.
"Employers are still hiring, but are being much more cautious and focused on cost control," said Claire Warnes, head of education, skills, and productivity at KPMG UK.
“Despite the stability of a new government and easing inflationary pressures, employer confidence to recruit has not yet returned, leading to delays with permanent hiring and even a small contraction in the temporary market as worker contracts are not renewed,” added Jon Holt, chief executive and senior partner of KPMG UK.
7.58am: Aldi declares £800mln UK investment spree
Aldi has pledged £800 million to accelerate its expansion plans in the UK.
The budget supermarket chain intends to increase its UK-wide footprint from 1,000 stores to 1,500, starting with 23 new store openings by the end of 2024.
It comes as new financial figures show annual sales increased by more than 15% to £17.9 billion in 2023, representing its highest ever period of sales growth.
Giles Hurley, chief executive of Aldi UK and Ireland, said: “British shoppers are voting with their feet and choosing Aldi as their first-choice supermarket. We’re responding with our biggest ever annual investment in Britain.
“For every £1 of profit generated last year, we’re investing £2 this year – opening more stores and building the supply infrastructure to bring high-quality, affordable groceries to millions more families the length and breadth of Britain.”
7.25am: Barratt, Lloyds and Homes England join forces
Barratt Developments PLC (LSE:BDEV) has joined forces with Lloyds Banking Group PLC (LSE:LLOY) and Homes England to create the MADE Partnership, which will focus on developing large sites “to help deliver thousands of much needed new homes across the country”.
According to the press statement, MADE will act as master developer for multiple large scale, residential-led developments from 1,000 to more than 10,000 homes along with a variety of community facilities and employment uses.
Barratt, Lloyds and Home England are contributing equally to the project’s £150 million initial funding.
Labour’s housing and planning minister Matthew Pennycook called it a “landmark new partnership” that “will support our commitment to ramp up housing supply and boost economic growth by developing more large-scale, attractive and sustainable places across the country”.
“Through the MADE Partnership, we are creating a master developer which can manage the infrastructure and placemaking that is needed to deliver at scale, whilst consistently achieving the high quality and sustainability standards that Barratt is known for,” said Barrat’s chief executive David Thomas.
7.06am: Stock to gain
The FTSE 100 is expected to open around 45 points higher at 8,215 when the week’s trades kick off on Monday, following a particularly bearish last week for the blue-chip index.
On the earnings front, Computacenter PLC (LSE:CCC) is reporting its half-year results, which are expected to underscore tough trading conditions in the UK.
The macroeconomic calendar is largely barren until wholesale inventories and consumer credit data emerge from the US later in the day.
There will be plenty of attention on Apple Inc (NASDAQ:AAPL, ETR:APC) too, with the new iPhone 16 handset expected to be revealed, followed quickly by Chinese competitor Huawei’s new model.