- FTSE 100 falls by 70 points
- AstraZeneca off 3%
- JD Sports leads footsie risers
4.01pm: FTSE 100 flounders
The FTSE 100 looks set to close the day in the red, with the index trading 70 points down at 8,200 in the final stretch.
AstraZeneca PLC (LSE:AZN) was the biggest faller of the day after results from a recent cancer drug trial disappointed.
Big-cap stocks were largely down or flat across the board, although UNITE Group plc, JD Sports Fashion PLC (LSE:JD.) and miners Fresnillo and Endeavour put in a decent showing with low-single-digit gains.
3.45pm: Trustpilot preview: North America growth in focus
Online review aggregator and marketing platform Trustpilot Group PLC (LSE:TRST) is expected to show strong top-line growth in the North American market when it reports its interims tomorrow.
The FTSE 250-listed company has guided towards 23% bookings growth in the region, with group-wide revenue growth capped at 20%.
Trustpilot has only turned a net annual profit once, in 2023 due to deferred tax assets, since going public in March 2021.
It has never turned an operating profit due to extensive sales, marketing and technology expenses, and has only once delivered a positive free cash flow (also in 2023).
However, annual recurring revenue growth has been consistent as have total cumulative reviews, which recently exceeded 300 million.
In its annual report published in July, Trustpilot expressed “confidence in continuing to deliver mid-teens constant currency revenue growth, and we also expect to achieve further operating leverage in the current financial year”.
Trustpilot shares took a hit in July after a major shareholder sold down its stake, though they remain nearly 50% higher year to date thanks to the March profit beat.
Strong retention rates and the above-mentioned bullish performance in North America supported that profit beat, so investors will be eager to see continued growth of these metrics tomorrow.
3.30pm: FTSE 100 hits intraday lows
London's blue-chip index has travelled to an intraday low of 8,198, marking a 72-point dip that has largely wiped out yesterday’s solid performance.
AstraZeneca PLC (LSE:AZN) remains the biggest drag on the index having dipped 3%, although Croda, BP plc, Barclays PLC (LSE:BARC), Melrose and B&M are also down more than 2%.
2.51pm: Nasdaq rallies
The Nasdaq 100 shot up around 0.3% when markets opened today, despite a nearly 2% fall in Apple Inc (NASDAQ:AAPL, ETR:APC)’s share price following a lukewarm reaction to the Cupertino megacap’s new iPhone 16 handset.
The Dow Jones Industrial Average dipped slightly, though the broader S&P 500 index remained well bid, shooting 0.36% higher to 5,490.
Some of the biggest risers on the US markets include Oracle Group, which rallied over 10% following yesterday’s revenue beat; Nvidia Corp, which is in recovery mode following a trouble previous week; and other Magnificent Seven stocks including Tesla, Microsoft and Meta.
2.45pm: Checking in on the pound
The British pound remains the best-performing G10 currency this year by a wide margin, per Rabbank analysis.
Despite a sharp decline following the Bank of England’s 25-basis point rate cut last month, the EUR/GBP exchange rate has returned to its July levels.
Meanwhile, the EUR/USD has seen a slight upward trend since the start of this month, with the market hesitating to push the pair below the 0.84 level.
Rabobank believes the pound could break below this threshold within a three- to six-month window due to a combination of euro weakness and pound strength.
However, the upcoming UK budget, slated for October 30, could pose challenges to the pound’s recent positive sentiment, especially if potential tax hikes dampen investor confidence.
At the time of writing, the EUR/GBP pair was swapping for 84p and Cable was swapping for US$1.306.
2.18pm: TSMC monthly revenues surge 33%
Taiwan Semiconductor Manufacturing Company (TSMC) reported consolidated net revenue for August 2024 of approximately NT$250.87 billion, reflecting a 2.4% decrease from July 2024.
However, the figure represents a significant 33% increase compared to August 2023, driven by strong demand for artificial intelligence chips.
For the first eight months of 2024, TSMC's total revenue reached NT$1.77 trillion, marking a 30.8% rise compared to the same period in 2023.
TSMC is the world’s largest dedicated semiconductor foundry, manufacturing chips for the world’s largest technology companies including Apple, Nvidia, and Qualcomm.
2.10pm: Oil prices fall
Brent crude prices fell nearly a percentage point today, with futures prices currently at US$71.15 a barrel.
US crude fell to a 16-month low of US$68.3 a barrel.
The dip in prices follows a lower demand forecast from OPEC.
In its September report published on Tuesday, the cartel revised its forecast for global oil demand growth in 2024 downward to around two million barrels per day (mb/d), representing an adjustment of 80,000 barrels per day (tb/d).
it remains significantly above the pre-pandemic historical average of 1.4 mb/d.
Looking ahead to 2025, global oil demand growth has also been revised down by 40 tb/d, now standing at 1.7 mb/d.
Non-OECD nations are again set to lead this increase, with growth of around 1.6 mb/d, spurred by countries such as China, India, and those in the Middle East and Other Asia.
1.25pm: Nasdaq to open flat despite Apple drag
A tepid reaction to Apple Inc (NASDAQ:AAPL, ETR:APC)’s iPhone 16 debut is expected to cause a 0.7% fall on the world’s most valuable company’s share price when US markets open today.
That will not be enough to drag the Nasdaq 100 into the red though - futures contracts have the tech-led index staying flat at 40,834.
Buoyant bids for megacap tech stocks including Microsoft Corp (NASDAQ:MSFT) and Nvidia Corp as expected to keep the index afloat.
The Dow Jones Industrial Average is also tipped to open flat, while the broader S&P 500 is tipped to open 0.25% higher at 5,484.
More reactions to Apple’s new AI-powered handset are expected to filter in throughout the day. Elsewhere in company news, GameStop Corp (NYSE:GME) is posting its second-quarter results.
Back in London, the FTSE 100 continues to trade in the red, 36 points lower ar 8,235.
1.04pm: JD Sports leads FTSE 100 risers
JD Sports has shot to the top of the FTSE 100 risers list with a 2.8% share price gain.
It comes as the sports apparel and sometimes buyer of distressed companies confirmed that it is closing a distribution warehouse in Derby, which will result in close to 200 jobs being lost.
This follows a strategic review of its global supply chain network, with redundancy consultation begun in July.
The wider FTSE 100 index is down 43 points at 8,227, largely due to a sharp dip in AstraZeneca stock.
12.50pm: Why is wage inflation so important to the BoE?
Wage inflation is becoming a key figure in anticipating the course of the Bank of England’s interest rate cuts.
While new job additions came in far hotter than expected in today’s jobs data print for July, the wages being paid in those jobs are beginning to cool.
Specifically, year-on-year wage inflation came in at a flat 4%, down from 4.6% in June and substantially below the 8.6% rate on inflation in July 2023.
Wage inflation is a great indication of a buoyant economy and good news for struggling households, but it also keeps the pressure on the Bank of England to keep interest rates high.
This results in higher borrowing costs for someone wanting to take out a mortgage, for instance.
Although wage inflation is beginning to moderate, “it is also still well above of what the Bank of England would believe is compatible” with its 2% annual inflation target, explained Rob Morgan, chief investment analyst at wealth manager Charles Stanley (LSE:CHAS).
“Wage inflation is a key number to help the BoE assess how quickly it should cut interest rates as it’s a significant component of services sector prices,” he continued.
“While goods inflation has been largely contained for the time being, services inflation continues to be tough to control.
“An employment market taking a long time to balance strengthens the case of the MPC hawks who want to wait for more evidence before they reduce rates any further.”
As it stands, the odds are slim of a further interest rate cut occurring later this month, but a move in November “is still very much on the cards”, reckons Morgan.
12.14pm WPP makes a bolt-on acquisition
FTSE 100-listed advertising firm WPP PLC (LSE:WPP) has acquired New Commercial Arts (NCA), an independent creative and customer experience agency.
NCA will now operate as part of WPP’s subsidiary Ogilvy's global creative network.
NCA was founded in 2020 by James Murphy and David Golding, and has worked with the likes of Sainsbury's, MoneySuperMarket, and Vodafone.
The agency employs around 90 people and operates from offices in London and Glasgow.
"Plugging into Ogilvy and WPP's network will give us access to data and AI tools at scale through WPP Open and to a broad set of Ogilvy capabilities that were simply out of our reach as an independent,” said NCA co-founder James Murphy, who will take on the role of chief executive of Ogilvy Group UK.
WPP shares added 0.2% on Wednesday.
11.59am: iPhone 16 met with relative indifference
Apple Inc (NASDAQ:AAPL, ETR:APC) shares are expected to lose around 1.1% on the Nasdaq today, suggesting a fairly cold reception to the iPhone 16 unveiling.
The iPhone 16 debut “had promised to kickstart a new artificial intelligence-fuelled era for the technology giant but was rather met with relative indifference by investors”, writes Proactive’s Josh Lamb.
Swissquote Bank analyst Ipek Ozkardeskaya warned Apple’s AI capabilities were already viewed as “weak” in comparison to rivals, such as Samsung and Google which have already introduced phones incorporating the technology.
“Many think [these] can’t trigger a massive surge in new product sales,” Ozkardeskaya said, “even less so as these features will be gradually updated and won’t even be available at the products’ launch date”.
AJ Bell’s investor director Russ Mould said of the launch: “At face value, some of the initiatives look interesting. A new version of the iPhone with a camera button on the side is a smart move as that should appeal to wannabe influencers eager to capture every moment.
“The incorporation of AI into the phone is also a good step forward, so are the enhancements to its air pods. Unfortunately for Apple, competitors are already one step ahead of the game with AI.
“There is a danger that Apple becomes the imitator, not the trendsetter.
It cannot afford to be in that position from a reputational perspective. Apple built its empire through innovation and being at the cutting edge of technology. It needs to work harder to stay on top.”
11.44am: Spectator portion of Telegraph Media Group sold to GB News founder
Redbird IMI, owner of the right-wing Telegraph Media Group news empire, has sold The Spectator portion of the business to arch Brexiteer and controversial hedge fund manager Paul Marshall.
Marshall, who bankrolled the launch of the GB News TV channel in 2021, paid £100 million for the publication, the Spectator said.
It marks the latest twist in a convoluted saga over The Telegraph’s ownership after United Arab Emirates-backed Redbird IMI bought it out of Lloyds Banking Group PLC (LSE:LLOY)’s receivership last year.
Lloyds seized control of the business when former owners the Barclay brothers failed to make interest payments on their borrowings with the bank.
Since then, the former Tory government blocked Redbird IMI’s takeover of the Telegraph Media Group due to fears of political influence from the UAE.
Numerous suitors have since lined up to wrest control of the business after Redbird IMI put it back up for auction.
Alongside Marshall, Maurice Saatchi, private equity group CVC, the Murdoch empire and the Daily Mail have entered talks.
The Spectator called the £100 million deal a “vindication” of its “unusual business model”.
“The price we’ve been sold for, £100 million, speaks to that belief in our potential,” said the Spectator’s editor Fraser Nelson.
“We were valued at £20 million when we separated from the Daily Telegraph in 2005. Since then, the magazine market has fallen by about two-thirds but our subscriptions have more than doubled.
“This five times valuation increase is, to put it mildly, rare in our industry. The auction attracted 22 potential bidders, including some of the greatest and most respected names in British and European publishing.
“Not bad for a publication with barely three dozen journalists.”
11.02am: AstraZeneca the biggest FTSE faller of the morning
AstraZeneca PLC (LSE:AZN) shed £9 billion of value after its shares dipped 4.8% this morning, making it the biggest drag on the FTSE 100.
This is due to some disappointing results from a trial of a lung cancer drug.
Late-stage trial results of the TROPION-Lung01 showed that the overall survival rate from the new drug “did not reach statistical significance”, according to AstraZeneca.
The trial was to test the datopotamab deruxtecan (Dato-DXd) antibody-drug conjugate compared to docetaxel, the current standard of care chemotherapy, in adult patients with advanced or metastatic nonsquamous non-small cell lung cancer (NSCLC) who had been treated with at least one other therapy.
Shares in Britain’s most valuable company are currently trading at 12,102p with a market capitalisation of £187.58 billion.
The FTSE 100 is down 35 points to 8,235.
10.39am: China’s lack of appetite for foreign goods leads to soaring trade surplus
China’s trade surplus trounced expectations in August after year-on-year exports increased by 8.7%.
Forecasters had expected total export growth to be a flat 7%, but double-digit growth in household appliances, aluminium, general machinery and integrated circuits led to these forecasts being smashed.
As a result, China’s balance of trade exceeded $91 billion, up from less than $84 billion in July and more than 34% higher year on year.
This is despite persistent trade tension with the US- where the surplus widened to $33.81 billion in August from $30.84 billion in July.
Exports to the European Union rose by 13.4% year on year.
A lack of domestic demand for foreign goods contributed significantly to the surplus.
Imports increased just 0.5% against 2% expectations, primarily because of falling demand for EU-originated goods amid a drought in luxury demand.
Imports of rare earth materials were notably poor, having fallen by nearly a third.
China is the largest global producer of rare earths, but the US still commands a large share of the global market, alongside Australia and emerging economies across Asia and Africa.
Looking forward, Pantheon Macroeconomics’ senior China economics Kelvin Lam stated: “On balance, we expect Chinese export growth to ease moderately in Q4, due to the higher base over the same period last year.
“Also, the slowdown in US demand — which accounts for 15.3% of total exports in August — will inevitably weigh on Chinese export growth.
“Admittedly, the slacking US market is somewhat offset by a rebounding EU market and China’s pivot towards non-traditional markets.
“We continue to think China’s export growth strategy will face challenges in the next few quarters, thanks to geopolitical/trade tensions with the West, especially in a US election year.”
9.50am: Ocado outpaces Sainsbury's, Asda, other brick-and-mortar grocery rivals
Asda retained its status as the third-largest supermarket in the UK by volume in the September quarter, but the gulf between its and FTSE 100 rivals Tesco PLC (LSE:TSCO) and J Sainsbury PLC (LSE:SBRY) continued to widen.
Asda, whose chairman Stuart Rose recently said he was “embarrassed” by Asda’s performance under the ownership of Mohsin and Zuber Issa, maintained a 12.6% market share in the 12 weeks to 1 September, according to the latest Kantar data.
This is down from 13.8% in the same period in 2023- a 5.6% decline.
Tesco, meanwhile, increased its leading position by 5.3% to 27.8%, with closest competitor Sainsbury’s adding 5.7% to 15.2% of market share.
However, it was Lidl that saw the most impressive growth among the brick-and-mortar supermarket chains by increasing its market share by 9.1% to 8%.
Online-only Ocado, beat out all traditional grocery chains with a 12.9% increase in its market share to 1.8%.
Kantar noted that grocery price inflation eased by to 1.7%, but cost-on-living pressure remained prominent among shoppers.
Fraser McKevitt, head of retail and consumer insight at Kantar, stated: “Despite grocery price inflation easing back to 1.7% over the last four weeks, shoppers' financial confidence hasn’t risen with it.
“Memories of the last two years remain strong, with nearly 60% of shoppers still very or extremely concerned about rising grocery prices.
“This is their second biggest financial worry, only behind home energy bills.”
Kantar’s published grocery market shares are based on the total till roll of retailers that are primarily grocers (but may also sell merchandise (including clothes).
M&S, which is a balanced mix of FMCG and general merchandise, is excluded from the data.
9.34am: UK jobs market like a newly baked cake
Here is what AJ Bell’s investment director Russ Mould said of the latest UK jobs data: “The latest UK jobs figures suggest a labour market which, like a newly baked cake set in front of a group of kids, is cooling, but not quite as fast as the Bank of England might want in order to press the accelerator on rate cuts.
“UK wage growth fell to its lowest level since the quarter to July 2022 but, even in real terms, pay is still up considerably more than the Bank’s 2% inflation target.
“Although most of the data was in line with expectations, a tick lower in the unemployment rate and a much bigger increase in the number of people in employment does hint at some continuing tightness in the jobs market.
“This leaves the Bank’s decision making finely balanced ahead of its meeting next week.
“The ONS acknowledges some volatility around its numbers and this is not the only jobs data out this week with the accountancy group BDO releasing data suggesting August was the worst month for the UK labour market since 2013.
“Another significant takeaway from today’s ONS report is the 4% increase in overall wages which will feed into the uplift in the state pension. The increase will be less than pensioners have seen in recent years.”
8.55am: Steel job losses will be ‘grim’
Up to 6,000 jobs are expected to be slashed from the UK steel and oil refinery sectors this month in what is reportedly being labelled as a “grim” September by the Labour government.
As previously reported, the closures of Tata Steel-owned Port Talbot blast furnaces is expected to take 2,800 jobs with it.
British Steel is set to close blast furnaces at its Scunthorpe site; previous reports had the number of job losses at 2,500, but the BBC has reported a number closer to 3,000 after a government support package fell through.
According to reports, unions say the closure of blast furnaces at both Port Talbot and Scunthorpe will leave the UK without the ability to make virgin steel.
Another 400 will be cut at Scotland's Grangemouth oil refinery.
Labour has pledged up to £3 billion to support the UK steel industry, but investment has been earmarked for green steel initiatives that lossmaking sites like Port Talbot and Scunthorpe sites are out of step with.
The 'grim' September for steel puts a downer on relatively strong jobs data emerging from the UK today.
8.23am: Stocks open lower
The FTSE 100 opened in the red this Tuesday, dipping 40 points to 8,231 following yesterday’s bullish performance.
Two biotech giants, AstraZeneca PLC (LSE:AZN) and generics producer Himka Pharmaceuticals plc, were the biggest fallers when trading commenced, with Pearson PLC (LSE:PSON), Tesco PLC (LSE:TSCO) and Beazley PLC (LSE:BEZ) also chalking up losses.
Mining stocks appear to have taken kindly to the £1.9 billion Centamin PLC (LSE:CEY, TSX:CEE, OTC:CELTF) takeover, with Fresnillo PLC (LSE:FRES) and Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) topping the risers list with a 2.7% gain and 1.4% gain respectively.
8.11am: Wickes’ profit hit by weak consumer demand
Wickes Group PLC (LSE:WIX) has dropped an interim trading update showing 3.4% year-on-year decline to £799.9 million.
On an adjusted basis, profit before tax fell by 25%, “reflecting a period of weak consumer demand combined with significant cost increases”, according to management.
The group maintained its full-year profit outlook, citing improvements in trading towards the end of the period. Wickes also highlighted its continued growth in market share, particularly in its Retail segment and the TradePro program, which saw a 14% rise in sales.
Shares were flat when trading commenced on Tuesday.
The FTSE 100 index is currently 53 points down at 8,218.
7.55am: Jobs data sends mixed signals to Bank of England
Employment in the UK increased by 265,000 in July marking the largest rise in employment in over 18 months and clobbering forecasts of 115,000 new jobs.
The increase was largely driven by growth in full-time employment, with more people also taking on second jobs, which now account for 3.9% of all employed individuals, according to the Office of National Statistics.
Unemployment fell to 4.1% in the July quarter, down slightly from 4.2% in the previous quarter, matching expectations.
The strong numbers are likely to spark a conversation around the rate of interest rate cuts from the Bank of England.
Policymakers lowered the bank rate by 25 basis points in August, bringing the benchmark rate down from a 16-year high.
But strong employment figures suggest a resilient economy and raises inflation concerns, which may cause jitters among the more hawkish monetary policy committee members.
On the other hand, Dovish MPC members might highlight that wage growth eased both for the private sector (4.9% year on year in July versus 5.3% in June) and the public sector (5.7% in July versus 6% in June).
The construction sector saw the smallest annual regular growth rate at 3.9%.
The next BoE decision is due on 19 September.
7.30am: Centamin agrees takeover from South African gold giant
FTSE 250-listed gold mining company Centamin PLC (LSE:CEY, TSX:CEE, OTC:CELTF) has agreed to be taken over by South African large-cap miner AngloGold Ashanti (ASX:AGG) plc for a large premium.
AngloGold tabled a cash and equity offer that values each Centamin share at around 163p.
This represents a nearly 37% premium to yesterday’s closing price.
In accepting the offer, the Centamin board called it a “compelling strategic fit” that closely aligns with AngloGold’s core competencies.
Following the acquisition, AngloGold will take control of Centamin’s flagship asset, the Sukari gold mine in Egypt.
Sukari is cited as Egypt's largest and first modern gold mine which has produced over 5.9 million ounces of gold since entering production in 2009.
“This transaction is an endorsement of Centamin's achievement in re-establishing Sukari as a world-class operation and occurs as the Egyptian Government has taken important steps to attract foreign investment to develop the country's significant geological potential,” said Centamin chair James Rutherford.
Martin Horgan, chief executive of Centamin, added: “The transaction will allow our assets to grow as part of AngloGold Ashanti (ASX:AGG)'s larger, diversified portfolio, benefitting from AngloGold Ashanti (ASX:AGG)'s track record of responsibly developing and operating large-scale open pit and underground mines in Africa in close partnership with the host governments and communities."
7.10am: Stocks to pare back gains
The FTSE 100 is expected to pare down the 89-points of gains it racked up on Monday, with pre-market trades pointing to around 37 points of losses when markets open.
Incoming workforce data shows that the unemployment rate fell to 4.1% in July from 4.2% in June, hitting market expectations dead on target.
In employment change terms, 265,000 new jobs were added in July, far exceeding the 115,000 new jobs forecast.
This will be likely to spark a discussion around the pace of interest rate cuts from the Bank of England going forward.
There are no big-cap earnings due today until GameStop Corp (NYSE:GME) in the US comes out this afternoon.