- FTSE 100 up 19 points
- UK economy returns to growth
- Sainsbury's investor cuts stake
3.58pm: FTSE 100 on course for gain
London’s blue chips appeared on course for a positive end to the week, having climbed by 19 points to 8,257 come the afternoon.
This came after the Office for National Statistics reported the UK economy returned to growth in August following two stagnant months, leaving eyes fixed on this month’s Budget… Read more
Vistry Group PLC (LSE:VTY) led risers late on, up 3.1%, as shares looked to recover slightly following a steep drop after the housebuilder’s profit warning earlier in the week.
Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) followed with a 2.5% gain, coinciding with a bounce back in gold prices on Friday.
Mondi PLC (LSE:MNDI), Centrica PLC (LSE:CNA), Taylor Wimpey PLC (LSE:TW.) and Barratt Redrow PLC (LSE:RDW) also sat among the day’s risers.
J Sainsbury PLC (LSE:SBRY) emerged as the day’s biggest loser in the meantime, having dropped by 6.0% after news major shareholder the Qatar Investment Authority had sold over £300 million worth of stock in the supermarket… Read more
The FTSE 100’s rise on Friday did not prove enough to recoup on heavy declines seen earlier in the week though, with the index heading for a 23-point fall over the past five days.
3.35pm: S&P 500, Dow Jones hit record intraday highs
Gains on Wall Street saw both the S&P 500 and Dow Jones surpass record intraday highs on Friday.
Up 0.6%, the S&P 500 surpassed the 2,800 mark for the first time to reach 2,816, while the Dow Jones added 0.7% to hit 42,753.
3.31pm: Endeavour Mining tops risers as gold rallies
Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) emerged as the FTSE 100’s biggest riser on Friday, coinciding with a reinvigorated rally for gold.
Shares in the miner ticked up 2.8% throughout the day, leading the likes of Vistry Group PLC (LSE:VTY) and Mondi PLC (LSE:MNDI) higher.
This coincided with a 1.1% rise for gold to US$2,652, after a sudden reverse in expectations for further steep US rate cuts caused a blip in the yellow metal’s recent rally this week.
Overall, the FTSE 100 overcame a decline earlier in the day to tick up 27 points to 8,264 by late trading.
3.13pm: UK economic growth seen slowing through latest quarter
Gross domestic consumption (GDP) likely grew by 0.2% over the third quarter, the National Institute of Economic and Social Research has said.
This comes after ONS figures on Friday morning showed the UK economy ticked up by 0.2% in August, after two flat months in June and July.
NIESR’s forecast, which includes September, would mean economic growth slowed over the most recent quarter, after GDP ticked up by 0.5% in the three months to June.
2.54pm: Nasdaq falls in mixed start on Wall Street as banks report
Wall Street got off to a mixed start on Friday, as the Nasdaq fell but the S&P 500 and Dow Jones both gained.
The Nasdaq dipped 0.3% as trading got underway, while the S&P 500 and Dow Jones climbed by 0.4% and 0.1% respectively.
A 2.9% gain by JPMorgan Chase & Co (NYSE:JPM, ETR:CMC) saw the bank top the Dow Jones’ risers early on, after third quarter results showed earnings per share beat market expectations.
Wells Fargo enjoyed an even stronger start in the meantime on its update, jumping 5.1%, while BlackRock Inc (NYSE:BLK) also racked up a 3.3% gain following results.
Producer price index figures on Wednesday also proved positive for the Federal Reserve’s efforts to stem inflation, showing a rise of 1.8% in September against August’s 1.9%.
2.48pm: Housebuilders to be handed deadline to fix cladding
Housebuilders are set to be handed a deadline to begin fixing dangerous cladding on blocks of flats, seven years after the Grenfell Tower disaster.
A five-point plan addressing slow progress in remediation work is to be put to developers by the Ministry of Housing, Communities and Local Government, according to the Financial Times.
Deputy prime minister Angela Rayner is expected to meet industry bosses next month to firm up the plan, which will give housebuilders six months to assess where remediation is needed and a further 12 months to begin work... Read more
1.39pm: JPMorgan sets aside more for bad loans as income dips
JPMorgan Chase & Co (NYSE:JPM, ETR:CMC)’s update showed more was set aside to cover bad loans over the third quarter, as net income also dipped.
Some US$3.1 billion was set aside to cover credit losses against US$1.4 billion a year ago, the Wall Street bank reported on Thursday.
This included cover for US$2.1 billion of bad loans over the third quarter, as a further US$1.0 billion was set aside in case of future losses.
JPMorgan also reported net income fell 2% to $12.9 billion year on year over the third quarter, despite a 6% rise in revenue from to $43.3 billion
Earnings per share climbed to US$4.37 from US$4.33 however, beating analysts’ expectations.
Chief executive Jamie Dimon noted long-term net inflows climbed to a record US$72 billion during the quarter, coinciding with a 15% uptick in asset management fees.
He also warned of geopolitical tensions “getting worse,” highlighting “significant human suffering”.
“The outcome of these situations could have far-reaching effects on both short-term economic outcomes and more importantly on the course of history.”
1.00pm: Wall Street to drop as banks kick of earnings season
Wall Street looked on course to drop on Friday morning as JPMorgan Chase & Co (NYSE:JPM, ETR:CMC), Wells Fargo & Co and BlackRock Inc (NYSE:BLK) got third-quarter earnings season fully underway.
Futures had the Nasdaq down 0.3% ahead of the opening bell, while the S&P 500 and Dow Jones were also seen slightly below the mark.
This came as 10-year Treasury yields crept higher over the course of the morning to 4.1%, as markets continued to mull slower rate cuts from the Federal Reserve.
A string of updates from Wall Street giants got third-quarter earnings season well and truly underway in the meantime on Wednesday.
BlackRock Inc (NYSE:BLK)hed up 0.5% in pre-market trading after reporting assets under management had hit an all-time high of US$11.5 trillion, aided by record inflows of US$221 billion in the third quarter.
JPMorgan ticked up 1.0%, as profit, despite falling by 2% year on year, beat analysts' expectations at US$12.9 billion.
Revenue of US$42.6 billion was also ahead of expectations, while fees from JPMorgan’s investment banking wing jumped 31% to US$2.2 billion
Shares in Wells Fargo rallied 3.5% ahead of the open meanwhile, as a 37% surge in its investment-banking fees to US$672 million came alongside expectation-beating net income of US$5.11 billion, which was also down year on year.
12.26pm: Santander pulls cheapest mortgages as swap rates rise
A second major mortgage lender has started to withdraw its cheapest products in a sign that the recent price war among lenders might be ending.
Santander UK said eight five-year fixed-term products will be temporarily withdrawn from 10 pm tonight.
That includes its most keenly priced mortgage, at 3.68% for borrowers with a deposit of at least 40% and a £999 fee.
Santander’s move follows the repricing of several mortgages by another major lender, Coventry Building Society from today.
Brokers said that the recent rises in wholesale swap rates, which are linked to gilt rates, are behind the change in the mood in the mortgage market.
The yield on the benchmark 10-year gilt is 4.23% currently compared with 3.75% in mid-September.
Nervousness about the level of public borrowing the government will take on in the Budget allied to the situation in Lebanon has made money markets wary, said commentators.
11.51am: BlackRock’s assets under management hit an all-time high
BlackRock Inc (NYSE:BLK) kicked off America’s third-quarter earnings season on Friday with news its assets under management had hit a record US$11.5 trillion.
This came after the figure grew by US$2.4 trillion year over year, the bank reported, with net inflows totaling a record US$221 billion in the third quarter.
Adjusted operating income ticked up 26% to US$2.1 billion, with earnings per share climbing by 5% to US$11.46 over the quarter.
“Our strategy is ambitious, and our strategy is working,” chief executive Laurence Fink commented.
Shares in the Wall Street giant ticked up 0.5% in pre-market trading.
11.31am: Monzo eyes £4.5bn valuation as another share sale looms
Monzo is reportedly gearing up for a secondary share sale which will value the digital bank at £4.5 billion.
Staff have been offered the chance to sell their shares in the bank, according to Sky News, with tens of millions of pounds worth of stock likely to be offered up.
Existing investors StepStone Group and the Singaporean sovereign wealth fund were said to be among those in the running to build their stakes in Monzo through the sale.
This would follow a fundraising round earlier in the year, through which Monzo issued £500 million worth of new shares, valuing it at £4.1 billion... Read more
10.49am: November rate cut not set in stone after GDP picks up
Another cut to base interest by the Bank of England is by no means guaranteed after the UK economy returned to growth in August.
That’s according to Institute of Chartered Accountants in England and Wales economics director Suren Thiru, with the ONS figures having shown a 0.2% uptick after flat readings for June and July.
“These figures confirm a reassuring rally in output, as easing inflation and better weather helped return the economy to growth,” Thiru noted.
“While interest rates are still likely to fall in November, these positive figures mean it’s not quite a done deal by giving the more hawkish rate setters enough encouragement over economic conditions to hold off voting to relax policy.”
Thiru added the economy “could blow a bit hot and cold over the near term,” as growing incomes are hindered by rising caution over tax hikes in the Autumn Budget and geopolitical uncertainty.
10.38am: Pound off one-month low
Sterling gained on Friday morning to take it off Thursday’s one-month low against the dollar.
A 0.12% gain saw the pound climb to US$1.3076, after a sudden reverse in expectations for further steep cuts in the US last week has weighed recently.
This has seen the pound drop from the US$1.34 mark since late September.
Analysts warned Friday’s news that the UK economy returned to growth in August may also not be enough to reignite the pound against the dollar.
“While there are some pockets of good news in the UK economic data, the UK economy can not compete with the US economy on the growth front,” XTB’s Kathleen Brooks said.
“This growth differential could lead to a dollar positive yield differential down the line, and there is now a growing chance that the Fed may pause in November while the Bank of England cuts rates.”
9.52am: IPO market to remain constrained until 2025 - Peel Hunt
Activity across Britain’s initial public offering (IPO) market is expected to remain muted over the remainder of the year before picking up in 2025, according to Peel Hunt.
Analysts from the investment bank noted post-summer IPO activity had been constrained as companies avoided volatility around the UK’s looming Budget and the presidential election in the US.
Rosebank Industries PLC (AIM:ROSE) and Aberforth Geared Value & Income Trust PLC were the only companies to list in London over the third quarter, joining the AIM and main market respectively.
This meant just 10 companies listed in the first nine months of 2024, drumming up a total of £584.6 million, down 47% compared to the same period in 2023.
Peel Hunt reported its IPO Speedometer had slowed from 29 to 27 miles per hour between August and September, indicating the market was “selectively open”.
A number of companies were said to be holding early-stage meetings or in the process of gearing up for IPOs though, Peel Hunt said, leaving a bounce back expected next year.
9.31am: Saga jumps on Ageas partnership
Saga PLC (LSE:SAGA) racked up an 8.6% gain on Friday morning after unveiling talks with Ageas over a 20-year partnership for motor and home insurance.
Under the proposed agreement, Ageas will also acquire Saga's underwriting arm Acromas for £67.5 million.
The partnership aims to enhance both companies' service offerings in the over-50s insurance market.
Ageas UK will operate Saga's motor and home insurance products, which generated gross written premiums exceeding £479 million in the year ending 31 July… Read more
Saga shares soared to 135.8p on the news, leaving it as the FTSE All-share’s biggest gainer for the day.
9.20am: Gold and oil tick up on Friday
Gold and oil prices picked up again on Friday after this week brought a pause in rallies for both.
Benchmark Brent crude inched closer to the US$80 mark, with the price of a barrel climbing to US$78.67 for a 1.8% gain since Thursday morning.
Gold also accelerated higher, having ticked up by 1.1% to US$2,645 in the meantime, though this saw it remain off last month’s US$2,686 record high.
UBS analysts had forecast on Thursday that the yellow metal would top US$2,850 by mid-2025, as ongoing monetary easing globally and geopolitical tensions also buoyed oil prices ahead.
9.08am: UK economy ‘a picture of slowing growth’ pre-Budget
Though gross domestic product picked up in August, the picture is one of “slowing growth” ahead of this month’s Autumn Budget, XTB analyst Kathleen Brooks has noted.
She highlighted the figures showed just some sectors enjoying “especially strong growth,” such as accountancy, retail and manufacturing, as the likes of oil production was weaker and service growth “barely budged”.
Services are “usually the mainstay of British growth,” Brooks commented, highlighting weakness in wholesale retail, alongside the arts, entertainment and recreation sector, had weighed.
“The economic backdrop to this month’s Budget is one of economic slowdown since Labour have been in power,” she continued.
“Will this make the Budget more pro-growth? Can the government’s initial doom and gloom message be blamed for the slowdown?
“Chancellor Reeves would be wise to use this Budget to boost UK economic growth, however, she has an almost impossible balancing act to perform.”
8.49am: BP warns refining margins squeezed
BP PLC (LSE:BP.) has joined Shell PLC (LSE:SHEL, NYSE:SHEL) in warning refining margins weakened over the third quarter as a drop in oil prices also hit.
Weaker refining margins are set to deal a US$400-600 million hit to third-quarter profits, the oil giant said on Friday.
Net debt is expected to go up at the end as a result, with BP also warning oil trading had been weak over the quarter... Read more
Shares dipped 0.5% on Friday following the news.
8.37am: Sainsbury’s tumbles as biggest shareholder cuts stake
J Sainsbury PLC (LSE:SBRY) tumbled on Friday morning following news its largest shareholder was ditching a stake in the supermarket.
The Qatar Investment Authority revealed overnight it had sold £309 million worth of shares in the supermarket.
According to a regulatory filing, some 109.4 million shares were offloaded at a price of 280p, marking an 8p discount to Sainsbury’s stock price as of Thursday’s close.
This equated to roughly 5% of the Qatar Investment Authority’s holding in the supermarket, which had sat at 14.2% prior to the sale.
Shares fell 5% as trading got underway on Friday, placing Sainsbury’s as the FTSE 100’s biggest loser.
8.20am: Stocks off the mark early on
London’s blue chips faced another muted day on Friday as confirmation the UK economy returned to growth in August did little to boost sentiment.
The FTSE 100 fell 9 points to 8,228 as the market opened, taking its weekly decline to 55 points, or 0.6%.
Vistry Group PLC (LSE:VTY) appeared to be in recovery mode as trading got underway, as shares ticked up 2%, though this marked little consolation after the housebuilder’s profit warning earlier in the week has seen it drop over 30% since.
FTSE 250-listed Hays PLC (LSE:HAS) also racked up gains on Friday, climbing 2.3% as investors mulled news that the recruiter faced further pressure from a widespread slowdown in hiring over the first quarter.
“Shares have been weak going into this update so may have reached a bottom,” Panmure Liberum analysts noted on Hays.
The statement was in line with expectations, Panmure said, adding it preferred Hays to rival PageGroup PLC (LSE:PAGE).
8.08am: UK trade deficit widens
A jump in exports in August failed to prevent the UK’s trade deficit from widening in recent months, according to figures on Friday.
The Office for National Statistics reported a £3 billion uptick in the UK’s total goods and services trade deficit over the three months to August, leaving the figure at £10 billion.
This was in spite of a £2.9 billion increase in the value of goods exports during the month of August, as imports declined by £0.1 billion.
According to the ONS, the value of EU imports fell over the month while those from non-EU countries rose.
KPMG chief economist Yael Selfin noted the growing trade deficit was “the UK’s Achilles’ heel”.
“Rising geopolitical tensions and protectionist measures could accelerate the realignment of supply chains and potentially put further pressure on UK exports in the medium term.”
7.56am: Hays still facing pressure from hiring slowdown
Hays PLC (LSE:HAS) has continued to feel the pinch of a wider slowdown in hiring globally, first quarter results show.
According to a trading update posted on Friday, the FTSE 250-listed company saw a 15% year-on-year drop in net fees, with losses felt across all key regions including Germany, the UK, Ireland, Australia and New Zealand.
Consistent with employers’ cautious hiring trends, temporary placements fared comparatively better, posting an 11% decrease, while permanent placements experienced a sharper 21% drop of 21%... Read more
7.53am: Budget now the focus as GDP avoids surprises - analysts
An expected uptick in gross domestic product (GDP) through August will now leave attention firmly fixed on the Autumn Budget at the end of this month, analysts have said.
The UK economy ticked up by 0.2% after two flat months, with the figures coming in as expected.
“Overall, I’m not sure there is much for the market to get its teeth into here,” Omnis Investments strategist Patrick O'Donnell said.
He noted the Budget was “much more of a focus,” as questions were asked about how much of a “pro-growth agenda” will be adopted by the government.
The pause in growth throughout June and July was also not likely to be a concern, O’Donnell added.
“Some normalisation was to have been expected after arguably, an unsustainable growth rate earlier in the year.”
Charles Stanley (LSE:CHAS) analyst Rob Morgan warned the figures still pointed to “a picture of stagnation rather than healthy growth,” however.
“The government needs to think long and hard about how to kickstart a steeper economic trajectory,” he commented.
“The greater fear at this stage is political.
“With the government having spoken in cautious tones about the economy and warning of ‘difficult decisions’ around tax and spending, it is harder for businesses to retain confidence about the environment going forward.”
7.32am: UK economy returns to growth in August
Gross domestic product (GDP) picked up in August, following two consecutive months of stagnant growth, the Office for National Statistics has said.
Month on month, the UK economy is estimated to have grown by 0.2%, as service, production and construction output all picked up.
Service output climbed by 0.1% in line with growth seen in July, while construction and production picked up by 0.4% and 0.5% respectively after both declining previously.
GDP was estimated to have increased by 0.2% over the three months to August compared to the quarter to May, with estimates for flat growth in July being left unchanged.
Growth came in at 0.8% against the same three months a year earlier, while the figure climbed by 1.0% when compared to August 2023.
Robinhood analyst Dan Lane noted the figures would come as a “relief” to the government, but pointed to a slowdown in the second half after the UK racked up the fastest growth among the G7 during the early stage of the year.
7.14am: Stocks seen lower
Futures had the FTSE 100 falling a further 18 points on Friday after Thursday’s 6-point decline, leaving the index on course for a weekly drop.
This was despite confirmation from the Office for National Statistics that the UK economy returned to growth in August.
Gross domestic product increased by 0.2% in August, official figures showed on Friday morning, following flat readings in both June and July.
Asian markets were largely under pressure overnight, as further volatility was seen among Chinese stocks, which fell.
Another anticipated press conference is due on Saturday over China’s economic stimulus plans, with a lack of new measures during an event earlier this week having hit sentiment.
Back in London, Friday also brings a trading update from Hays PLC (LSE:HAS), while third-quarter earnings season is set to fully kick off in the US with reports from several Wall Street banks.