FTSE 100 closed up 24 points to 7,407
Snoozebox wakes up on news of workforce accommodation contract
Dixons Carphone tanks on profit warning
Provident Financial and WPP rebound, CRH rallies
Close: FTSE 100 suffers late slide but stays in positive territory
Having reached its high for the day a bit before 4.00pm, the Footsie spent the last half hour of trading surrendering gains.
The blue-chip index still finished in credit, though, with a 24 point gain at 7,408.
Advertising and marketing giant WPP PLC (LON:WPP) was one of the index's better performers, rising 3% to 1,462p, as it recouped some of the losses incurred yesterday after its profits warning.
Beaufort Securities said the group's balance sheet remains strong and the full-year dividend should be fully covered by free cash flow, as the broker set a price target of 1,600p.
Electrical goods and warranties seller Dixons Carphone Plc (LON:DC.) was today's WPP, shedding 54p at 181.3p after it sounded the alarm bell on full-year profits.
Recovery stock Snoozebox Holdings PLC (LON:ZZZ) shot up 26% to 0.37p as it bagged a workforce accommodation contract win.
3.55pm: FTSE 100 rises, led by Provident Financial rebound
The FTSE 100 is up 51 points to 7,434 in afternoon trading, shrugging off a stronger pound, as UK economic growth data met expectations and as the Jackson Hole event kicked off.
The pound is 10% higher against the dollar at US$1.2813 and 0.13% up versus the euro at €1.0855.
Second quarter gross domestic product was unrevised at 0.3%, in line with expectations, but economists pointed to concerns about weak consumer spending.
Separate data from UK Finance showed mortgage approvals reached a five-month high in July. The BBA also revealed a n rise in loans for house purchases in July.
The upbeat housing data seemingly boosted housebuilders with Persimmon and Taylor Wimpey on the front foot.
Other UK data by the CBI revealed retail sales fell in the year to August.
Company-wise, building materials group CRH rallied after reporting an increase in first half profits and announcing it will buy Germany’s Fels and sell is US distribution business.
Dixons Carphone slumped after saying it expects full year profit to drop due to challenges in its UK mobile business, the disposal of its Spanish arm and changes to European Union roaming legislation.
easyJet flew lower after Exane BNP Paribas downgraded the budget airline’s stock to ‘underperform’ from ‘neutral’. Paddy Power was in the red as its stock went ex-dividend.
Provident Financial rebounded for a second day following steep losses on Tuesday when it issued a profit warning, cancelled its interim dividend and said its chief executive is leaving.
WPP shares also recovered from declines yesterday when it cut its full year guidance and reported a drop in first half sales.
Looking ahead, investors will be looking out for policy hints at the Jackson Hole gathering of central bankers. The main event will be tomorrow when Federal Reserve chair Janet Yellen and European Central Bank President Mario Draghi deliver their speeches.
3.30pm: US existing home sales fall in July
US existing home sales unexpectedly fell in July, the National Association of Realtors said.
Sales dropped 1.3% to a seasonally adjusted annual rate of 5.44mln from a downwardly revised 5.51mln, compared to expectations for 0.9% increase.
The median price of an existing home rose 6.2% year-on-year to US$258,300.
US Some data explaining Existing Home Sales drop:
Number of houses for sale is at a 20-year low
Yearly supply also at late 90s levels pic.twitter.com/qZ21zEUl3w
— Daniel Lacalle (@dlacalle_IA) 24 August 2017
3.15pm: Sports Direct raises stake in Goals Soccer Centres
Sports Direct has more than doubled its stake in Goals Soccer Centres to 9.81%.
Mike Ashley's sportswear retailer has lifted its holding from 4.77% after adding shares in August from 3.8%.
The AIM listed football operator has 48 sites, including two in California and a third under construction. Last month it started a joint venture with City Football Group, which owns Manchester City, New York City and Melbourne City, to expand in the US.
2.30pm: SMMT messes up car sales data
Car sales data supplied by the Society of Motor Manufacturers and Traders last week was incorrect, the industry body has admitted.
The SMMT said there was a mix up on an incorrect algorithm when it pulled together official raw data.
Last Wednesday, the SMMT reported a 13.5% decline in second quarter used car sales but it actually fell 0.7%.
The report had added to worries about weak consumer spending as rising inflation hits disposable incomes.
"[Our] data team discovered there was an issue with an algorithm they used to process the data,” a SMMT spokeswoman said.
1.40pm: US initial jobless claims rise by less than forecast
US jobless claims rose less than expected last week, according to the Labor Department.
Initial jobless claims increased by 2,000 to 234,000 in the week to 19 August, compared to analysts’ forecasts of 238,000.
The four-week moving average fell by 2,750 to 237,759.
“Today’s initial jobless claims data, while up from last month, will be welcome news for President Trump as his government continue pointing to solid labour market figures as the benchmark for economic strength,” said Dennis de Jong, managing director at UFX.com.
“The US President took to social media earlier this week to claim his tenure at the White House has already created over one million jobs and, while figures may be debated, jobless claims look to be heading towards a multi-decade low.”
While the figures remain under the 250,000 target, it seems it will do little to shift the market’s bearish view of the dollar at present, he added.
“Trump’s ‘government shut down’ claims earlier this week have done nothing to help investors buy the greenback, but continued improvement on the employment situation certainly won’t harm long term aspirations for US economy growth.”
1.15pm: Fed should continue gradual rate hikes, says Esther George
Kansas City Federal Reserve president Esther George said low inflation in the US should not stop the central bank from raising interest rates.
In an interview with CNBC at the annual symposium in Jackson Hole, Wyoming, George said: “I think we should continue with the gradual rate path.”
She said while inflation is yet to reach the Fed’s 2% target, she was reminded it was a target “over the long term”, and in the context of a growing economy, of jobs being added, “I don't think it's an issue that we should be particularly concerned about unless we see something change”.
12.30pm: Rocky road ahead for consumers, says EY Item Club
The outlook for consumers looks set to be highly challenging over the latter months of the year as real incomes are likely to remain under pressure from high inflation and weak wage growth, according to Howard Archer, chief economic advisor to the EY Item Club.
“Furthermore, consumer confidence is brittle and caution over making major purchases appears to have been reinforced by heightened economic, political and Brexit uncertainties,” he said.
“There is some support for increased consumer spending coming from current ongoing decent employment growth. However, it is questionable if this can continue in the face of weakened UK economic activity and concerns over the UK’s economic and political outlook.”
#CBI survey fuels concern over #UK #consumer #spending - #Retail #sales fall in the year to August https://t.co/LrfhkrNyNr via @CBItweets
— Howard Archer (@HowardArcherUK) 24 August 2017
12.00pm: FTSE 100 edges up as traders weigh UK GDP
The FTSE 100 rose 32 points to 7,414 after UK economic growth data was left unrevised in the second quarter.
Second quarter gross domestic product rose 0.3%, in line with estimates.
Sterling rebounded 0.25% versus the euro at €1.0868 and 0.20% against the dollar at US$1.2826.
Connor Campbell, financial analyst at Spreadex, said cable appeared to ignore the weak underlying growth in the GDP report.
“Investors clearly weren’t ready to take a look at the ins and outs of the GDP report – household spending growth is at its lowest since the end of 2014, while business investment plunged from 0.6% in Q1 to 0.0% in Q2,” he said.
Afternoon Market Comment: Pound rebounds against dollar and euro despite UK’s measly 0.3% Q2 growth... https://t.co/tx8URSSctD
— Connor Campbell (@ConnorSpreadex) 24 August 2017
In other UK data, industry figures showed an increase in mortgage lending in July, providing a boost to housebuilders with shares in Persimmon, Taylor Wimpey and Barratt Developments in the black.
Provident Financial shares gained, rebounding from its plunge on Tuesday when it issued a profit warning, cancelled its interim dividend and said its chief executive was leaving.
CRH was another top riser after the building materials group announced the sale of its US distribution business and the acquisition of Germany’s Fels alongside an increase in first half sales and profits.
Going the other way, Dixons Carphone tumbled after warning on full year profits due to struggles in its UK mobile phone business.
Travel and leisure stocks were on the back foot, including easyJet, TUI and InterContinental Hotels Group, following reports of a terror threat in Rotterdam that led to the cancellation of a concert yesterday.
Greencore was in the red as it tried to reassure the market following its recent falling share price, saying it was not aware of any developments that would cause the decline.
Across the Atlantic, US stock are expected to open higher following losses yesterday when US President Donald Trump revived his threat to pull out of the North American Free Trade Agreement with Canada and Mexico. The Jackson Hole gathering of central bankers also gets underway with Federal Reserve chair Janet Yellen and European Central Bank President Mario Draghi due to speak tomorrow.
11.30am: UK retail sales fall in August
UK retail sales fell in the year to August as consumers felt the pinch of higher inflation and weak wage growth, according to the quarterly CBI Distributive Trades Survey.
The CBI balance of retail sales fell to -10%, the lowest since July 2016, from +22% the previous month. Economists had expected a reading of +14%.
The survey showed 44% of retailers said sales fell while 34% of respondents reported an increase.
“Despite the warmer weather at the start of the month, retail sales have cooled as higher inflation continues to squeeze consumers’ pockets,” said Anna Leach, CBI head of economic intelligence.
Retail sales volumes fell in the year to August, disappointing expectations for further growth. #CBI_DTS https://t.co/2b5IGVNZBH pic.twitter.com/wQ1oTPnKPO
— CBI Economics (@CBI_Economics) 24 August 2017
11.10am: UK mortgage approvals hit five-month high
UK mortgage approvals reached a five-month high in July but growth in credit card lending slowed, according to a report by UK Finance.
British banks approved 41,587 mortgages for house purchases last month, compared to 40,385 in June and 9% higher than in July 2016, a month after the Brexit vote.
Credit card lending rose by 5.3%year-on-year in July, slowing from 5.5% in June and the weakest increase since March.
"First time buyers are once again proving to be the driving force behind the property market,” said
Alastair McKee, managing director of the UK independent mortgage broker, One 77 Mortgages.
"With many amateur landlords still reeling from the raft of punitive tax changes, first time buyers are having a field day.
"The Help to Buy initiative is providing additional momentum, incentivising more and more people to make that first step onto the property ladder.”
He added that the property market remains uncertain amid economic and political uncertainty, but that we are still seeing a decent number of transactions.
"With house prices under pressure and the cost of borrowing so low, first time buyers are increasingly seeing the current market as a window of opportunity.”
10.30am: Weak consumer spending figures a worry, economists say
Second quarter UK economic growth was unrevised but consumer spending rose just 0.1%, the least since the fourth quarter of 2014.
“This result is particularly worrying, given retail sales data had suggested the combination of a late Easter and the second warmest June on record had given retailers temporary respite from the household income squeeze,” said James Smith, developed markets economist at ING Research.
Nancy Curtin, chief investment officer at Close Brothers Asset Management, said the small rise in wage growth has been negated by rising inflation taking a bite out of consumer spending power.
“Fears of cheap consumer debt fuelling spending is proving to be a thorn in the Bank of England’s side as it tries to navigate the potential need for a rate rise,” Curtin added.
10.10am: UK economy nearing a 'Brexit-induced cliff-edge'
Sluggish economic growth in the UK adds credence to the notion of the UK economy nearing a Brexit-induced cliff-edge, according to Jasper Lawler at London Capital Group.
"Recent signs of falling business confidence become of particular concern when they translate into the ‘hard data’. Nonetheless, while UK growth trudges along at a slow pace, the Bank of England will view it as offset by above-target inflation," he said.
"The decision whether to raise rates is still finely balanced and we expect the Bank of England to continue to do what they know best, nothing."
10.00am: Business investment flat, exports rise less than forecast
The ONS GDP figures showed business investment was flat during the second quarter at a 0.6% rise, compared to expectations of 0.4%.
Capital investment was also stronger than expected at 0.7%, beating estimates for a 0.4% decline.
Government spending rose 0.6% against expectations for a 0.3% gain.
But exports rose by just 0.7%, compared to the 1.0% increase forecast
Among sectors, service was the only positive contributor to GDP with a 0.5% quarterly rise.
In contrast, production fell 0.3%, construction dropped by 1.3% and agriculture dipped by 0.4%.
The pound is slightly higher versus the dollar and the euro following the UK GDP figures.
Sterling rose 0.25% against the euro at €1.0868 and 0.12% against the dollar at US$1.2815.
9.30am: Second estimate of second quarter UK GDP unchanged
The UK economy grew by 0.3% in the three months to June, in line with previous estimates and as expected by analysts, the Office for National Statistics revealed in its second estimate.
This compares to a 0.2% quarter-on-quarter increase in the first three months of the year.
The annual rate of growth was 1.7% in the second quarter, also unchanged from earlier estimates and as expected by analysts.
"GDP growth has slowed markedly in the first half of the year with relatively robust services growth, partly thanks to a booming film industry, offset by weak performances from manufacturing and construction in the second quarter," Darren Morgan, the ONS' head of GDP said in a statement.
"Household spending grew weakly, with the lower-value pound hitting household budgets, while business investment showed no growth at all."
0.3% growth in Q2 #GDP, unrevised from the previous estimate https://t.co/ie11LMvfQz
— ONS (@ONS) 24 August 2017
8.50am: FTSE begins on the front foot
The FTSE 100 got off to a positive start as it rose 19 points to 7,401.65 in early trade ahead of the UK quarterly economic growth figures and the kick-off of the central bankers’ shindig at Jackson Hole in Wyoming.
If the markets have been fairly subdued in the days ahead of the Bank Holiday break, individual stock movements have been anything but.
The 66% wiped off lender Provident Financial Group PLC (LON:PFG) Tuesday - the biggest one-day fall in the value of a FTSE 100 stock.
It made advertising giant WPP’s (LON:WPP) 11% reversal Wednesday look mild.
Dixons Carphone (LON:DC) kept the run going as it tanked almost 30% after sounding the earnings alarm. It wasn’t quite as catastrophic as Provvy’s alert, but investors were hurting.
“Dixons Carphone stoked fresh fears about the health of the UK retail sector with a profits warning amid a tough mobile phone market and lower earnings from its software division,” said Neil Wilson, senior market analyst at ETX Capital.
“After the Provident Financial collapse, another profits warning is probably the last thing the City needs right now.”
Proactive news headlines:
Platinum group metals and chrome producer Tharisa PLC said it has inked a strategic co-operation agreement with the Shanxi Taigang Wanbang Furnace Charge Co, a joint venture company of the Chinese giant Taiyuan Iron & Steel Co (TISCO). The five-year deal, which starts next month, will see Tharisa supply a minimum of 240,000 tonnes of metallurgical-grade chrome concentrate, which is around a quarter of its production.
TyraTech Inc. (LON:TYR) (LON: TYRU) said today that its overall trading remains satisfactory and the life sciences technology company expects to report results in-line with current market expectations. The one-line trading update came as the AIM-listed firm revealed it will announce its results for the six months ended 30 June 2017 on September 12.
OptiBiotix Health plc (LON:OPTI) is set to launch its LPLDL cholesterol and blood pressure lowering strain in the United States next month. The life sciences group will exhibit at the Supply Side West trade show in Las Vegas at the end of September where it will present various products that contain the LPLDL strain, including CholBiome and CardioBiome.
PowerHouse Energy Group PLC (LON:PHE), a specialist in turning waste into synthesis gas, said it had recruited a new chairman as well as successfully completing an oversubscribed £1.6mln City fundraiser. The appointment first: Powerhouse has brought on board Dr Cameron Davies, founder of gas-to-power firm Alkane Energy, which he brought to AIM and then subsequently helped sell to Balfour Beatty Infrastructure Partners for £60mln.
88 Energy Ltd (LON:88E) has told investors that flow testing operations on the Icewine-2 appraisal well are due to start in Alaska next week. The company noted that this schedule represents a one week delay, caused by fine tuning of the testing procedure.
Tlou Energy Ltd (LON:TLOU) has flagged a rescheduling of the proposal deadline for a coal bed methane pilot plant. The AIM-quoted company, in a stock market statement, told investors that the new deadline for the request for proposal (RFP) has moved to September 20 from August 23.
Cadence (LON:KDNC) said Auroch Minerals - in which Cadence currently owns a 7.7% stake – has revealed encouraging sampling results from the second round of multi-elemental analysis on waste dumps at the Tisová - Co Cu Au project. In a statement, Cadence said results from second round testing of historic waste dumps confirm cobalt presence at Tisová, as well as significant grades of copper, gold and silver.
In a separate statement today, Cadence also noted the announcement today from Bacanora Minerals PLC (LON:BCN) - in which Cadence currently owns a 16.1% shareholding - providing an update on the Sonora Lithium Project in Mexico, including progress on the work processes for the feasibility study and debt funding discussions.
Bacanora Minerals Ltd (LON:BCN) told investors that it expects the feasibility study at its Sonora lithium project in Mexico to be completed towards the end of this year. The explorer is currently targeting first production for 2019/2020 following an 18-month build programme.
Bushveld Minerals Limited (LON:BMN) has told investors that a working capital funding facility with Wogen Resources has been expanded to US$11mln, form US$9mln. It comes after other changes to the Wogen funding arrangements earlier this week – which saw the retiring of a US$3mln prepayment financing and an increase in the working capital facility to US$9mln from US$6mln.
Metal Tiger PLC (LON:MTR) revealed today that the mineral resource estimate for its T3 exploration project in the Kalahari copper belt in Botswana has been upgraded. The revised, JORC compliant estimate comprises 36mln tonnes of ore a 1.14% copper and 12.8 grams per tonne of silver, with T3 containing approximately 409,000 tonnes of copper and 14.8mln ounces of silver.
Galantas Gold Corp (LON:GAL) (CVE:GAL) said underground development of its gold mine in Omagh, Northern Ireland, continued as it posted its quarterly results. As you’d expect for a company investing in growth, Galantas was lossmaking - the net loss was C$511,876 for the three months ended June 30. More importantly, the company had C$1.68mln in the bank, which will help fund development. "I am very pleased with the progress made this quarter on developing the underground mine and I congratulate the Galantas team in Omagh on their excellent achievements,” said chief executive Roland Phelps.
Redx Pharma Plc (LON:REDX) announced that Jason Baker and Miles Needham of FRP Advisory LLP, joint administrators of the company and its subsidiary, Redx Oncology Limited, have been granted permission by the High Court to make a distribution to the groups’ unsecured creditors. The drug discovery firm said the joint administrators will shortly be sending unsecured creditors notices of intended dividend, following which claims will be adjudicated and distributions made, with all unsecured creditors to be paid in full. Redx added that this is a significant step towards the anticipated rescue of the companies as a going concerns and the termination of the administrations.
FairFX Group Plc (LON: FFX) said that, further to its announcement on 8 August regarding its conditional acquisition of CardOne, the Financial Conduct Authority has now consented to the acquisition. The group said the acquisition remains conditional on approval at the General Meeting to be held today, after which it will provide a further update on the deal and fundraising.
VinaCapital Vietnam Opportunity Fund (LON:VOF) said today it has entered into an agreement with VinaCapital Fund Management JSC (VCFM) – like VOF, an affiliate of Cayman Islands-based VinaCapital Investment Management Limited (VCIM) to delegate certain investment management and advisory activities. VCFM - a fully licensed fund management company domiciled in Vietnam - is regulated by the State Securities Commission of Vietnam which belongs to the International Organization of Securities Commissions of which the UK and US security commissions are also participating members.
6.45am ... positive start predicted
London’s FTSE 100 is expected to start Thursday in positive territory, albeit not by too much.
It is set to be typically summery (i.e. lacking major features or scheduled news flow), and much of the attention will be on macroeconomic matters – specifically UK GDP statistics for the second quarter.
As Michael Hewson, analyst at CMC Markets, points out in a note these figures have been flagged to the market and it is expecting GDP growth to mark an unchanged reading of 0.3%.
Globally, equities remained a little choppy. Wall Street stocks were mostly lower in Wednesday’s close.
The Dow Jones dipped 87 points, 0.4%, to finish the session at 21,812 while the S&P 500 was 0.35% lower at 2,444, and the Nasdaq lowered by 0.3% to 6,278.
In Asia, Japan’s Nikkei was down 0.34% at 19,368, meanwhile, Hong Kong’s Hang Seng moved positively, up 0.57% to 27,551. The Shanghai Composite was 0.15% lower, at 3,282.
Australia’s ASX 200 was just a smidgen higher, changing hands at 5,740 – up just 3 points for the session.
Here in the UK, CFD and spreadbetting group IG Markets sees the FTSE 100 about 3 points higher, calling the blue-chip benchmark at 7,384 to 7,388 just over an hour before the opening deals.
Ex-dividend factors will clip 2.32 points off the FTSE 100 index on Thursday, with Carnival PLC (LON:CCL), London Stock Exchange Group PLC (LON:LSE), Mondi PLC (LON:MNDI), Paddy Power Betfair PLC (LON:PPB), and Prudential PLC (LON:PRU) all trading without the attractions of their last dividend payout.
Thursday’s agenda:
Interims: Avocet Mining PLC (LON:AVM), Camelia PLC (LON:CAM), CRH PLC (LON:CRH), Hunting PLC (LON:HTG), John Laing Group PLC (LON:JLG), Macfarlane Group PLC (LON:MACF), OneSavings Bank PLC (LON:OSB), Phoenix Group Holdings PLC (LON:PHNX), Premier Oil PLC (LON:PMO), Playtech PLC (LONLPTEC), Sportech PLC (LON:SPO)
FTSE 100 ex-dividends: Carnival PLC (LON:CCL), London Stock Exchange Group PLC (LON:LSE), Mondi PLC (LON:MNDI), Paddy Power Betfair PLC (LON:PPB), Prudential PLC (LON:PRU)
Economic data: UK second reading Q2 GDP; CBI distributive trades; US weekly jobless
Around the markets (updated at 12pm):
- Sterling: US$1.2813, up 0.1%
- Gold: US$1,285.54 an ounce, down 0.4%
- Brent crude: US$52.08 a barrel, down 0.9%
Headlines
- Exxon deliberately misled public on climate science, say researchers - The Guardian
- A third of food firms 'unviable' without EU staff - Sky News
- UK car output reverses downward trend with 7.8 percent rise in July – Reuters
- Uber, Mired in Corporate Scandals, Sees Uptick in Bookings - New York Times
- Amazon's Whole Foods Deal Wins Swift US Antitrust Approval – Bloomberg