FTSE 100 closes down 20.99 at 7,379
Unemployment falls to 4.3%, wage growth remains at 2.1%
Slow start in the US
Price of copper and most other base metals fall
FTSE 100 closed Wednesday down almost 21 points as miners weighed down the blue chip index.
It finished the afternoon session at 7,379, while FTSE 250 was also lower - losing over 75 points to stand at 19,589.
David Madden, at CMC Markets, said of European trading: "Stock markets in Europe are experiencing low volatility as the rally that we saw at the start of the week has lost momentum.
"The bullish sentiment on the back of Hurricane Irma not being as severe as predicted, and no new tensions in relation to North Korea, has been replaced with a lacklustre attitude. You could say traders are pausing for breath, after the positive run."
In Germany the DAX closed 28 up at 12,553, while in France the CAC 40 added 8.58 at 5,217.
On Footsie top laggard was copper giant Antofagasta (LON:ANTO), which shed 3.87% to 969p. Silver giant Fresnillo (LON:FRES) took the second biggest loser spot, down 3.63% to 1,513p.
The top gainer was Provident Financial (LON:PFG), which added 1.68% to stand at 846p.
3pm - Apple weighs on Nasdaq
It seems Apple Inc (NASDAQ:AAPL) investors weren’t too impressed with what the tech giant had to show at last night launch extravaganza.
Among other new products, Apple unveiled its latest iPhone but the markets haven’t reacted to favourably this morning, with shares down 1.3% to US$158.90.
That’s weighing on the Nasdaq, which has opened 0.2%, or 11 points, lower at 6,443.7.
The S&P 500 is also off to a slow start, down 0.1%, or 1.7 points, to 2,494.7, while the Dow Jones is broadly flat at 22,117.6, still within touching distance of all-time highs.
Pound's fall helps FTSE to recover some losses
Back in London, the FTSE 100 has settled at just above 7,380 and currently sits at 7,383.5 – a 0.23% or 16.8 point loss for the day.
It had been as low as 7,340 at one point this morning until weak earnings growth data eroded some of the pound’s initial gains.
The pound and FTSE 100 tend to move in opposite directions, with the internationally-focused constituents of the blue chip index tending to benefit from a weaker pound as it makes their foreign-denominated earnings worth more and makes their exports cheaper to overseas buyers.
Cable (the USD/GBP exchange rate) had risen above US$1.33 early on but has since fallen back to US$1.325 after the data was released.
Miners still a drag
Miners have been the biggest drag on the Footsie as a result of falling metals prices across the board, including copper which has slipped another 1% today.
Rio Tinto PLC (LON:RIO) and BHP Billiton plc (LON:BLT) both dipped by 2% to £36.12 and £14.11 respectively, while Glencore PLC (LON:GLEN) shed 2.4% to 363.13p.
Anglo American PLC (LON:AAL) and Antofagasta PLC (LON:ANTO) were the two biggest fallers on the FTSE 100 though, losing 3% to trade at £13.51 and 977p respectively.
Tesco PLC (LON:TSCO) investors were nervous ahead of an announcement tomorrow from the supermarket giant’s takeover target Booker Group PLC (LON:BOK). Shares were down 1.8% to 181.9p shortly towards the end of trading.
EasyJet PLC (LON:EZJ) hasn’t moved all day from its position at the top of the risers’ leaderboard. It’s up 1.6% to £12.13 after the markets gave to the launch of its new airline alliance a collective thumbs up.
Oil price boosts BP and Shell
The London-listed oil giants also flowed higher this afternoon as the price of the black stuff rose on the back of a bullish report from the International Energy Agency.
The IEA said the global surplus which has kept prices low was starting to shrink as demand rises and various production cuts begin to take effect.
“Based on recent bets made by investors, expectations are that markets are tightening and that prices will rise, albeit very modestly.”
That boosted Royal Dutch Shell PLC (LON:RDSB) and BP PLC (LON:BP.), both of which gained the best part of 1% to £21.98 and 453.4p respectively.
Travis Perkins knocked by bearish broker note
On the second tier, builders' merchant Travis Perkins PLC (LON:TPK) saw its value knocked down by 4.1% to £14.18 after US broker Bernstein initiated its coverage of the stock with an ‘underperform’ rating.
Homeware retailer Dunelm Group PLC (LON:DNLM) took pride of place on the FTSE 250 mantelpiece, up 9% to 669.5p, after it reported an “encouraging start” to its new financial year.
1.30pm...Miners keeping FTSE in the red
The FTSE 100 has managed to claw back some of the losses it sustained earlier on this morning, with a slight fall in the value of the pound boosting the index’s internationally-focused constituents.
Even with the post-employment data rally, the blue chip index is still 0.3%, or 21.2 points, down at 7,379.5.
The miners were still weighing heavily on the Footsie as prices of copper (down 1% US$6,600 per tonne) and a host of other base metals slipped further.
Rio Tinto PLC (LON:RIO) and BHP Billiton plc (LON:BLT) both dipped by 1.7% to £36.25 and £14.14 respectively, while Glencore PLC (LON:GLEN) shed 1.4% to 365.1p.
Anglo American was the biggest faller on the FTSE 100 though, losing 2.2% to trade at £13.62.
Low cost airline Easyjet PLC (LON:EZJ) was still flying at the top of the leaderboard after it launched a new airline alliance that will allow its customers to book long haul flights through its website. Shares were up 1.7% to £12.14.
1.10pm...Subdued start for US stocks
The US markets are expected to give up some of the gains made on Monday and Tuesday when they open later on today.
With tensions over in North Korea easing slightly, or certainly not getting any worse, investors had started to buy again at the beginning of the week.
The rally looks like it has run out of steam though, with the Dow Jones, Nasdaq and S&P 500 all seen opening lower on Wednesday.
Spread bet firms are expecting the Dow to open 7 points lower at 22,112, the tech-heavy Nasdaq to open 11 points down at 5,984.3, while the S&P is seen as shedding 3.3 points at the opening bell to 2,493.6.
“The Dow Jones seems to have stalled at 22100,” said Spreadex analyst Connor Campbell.
“The index is set to start the US session flat at that level, with little on the agenda – bar the latest PPI reading – to help it on its way to a fresh all-time high.”
“It would appear that a running start to the week and fresh record highs in the S&P 500 has proven a little much for some traders, with profit taking seen ahead of Wednesday’s open,” added Oanda’s Craig Erlam.
As Campbell mentioned, there’s not much in the way of data today to guide the markets, with the key inflation figures and retail sales not due until tomorrow and Friday.
12.40pm...BP and Shell boosted by higher oil price
BP PLC (LON:BP.) (up 0.8% to 451.8p) and Royal Dutch Shell PLC (LON:RDSB) (up 0.5% to £21.90) were on the move as the London markets headed into the afternoon session thanks to a rise in oil prices.
Brent crude jumped 0.7% to US$54.95 a barrel while West Texas Intermediate increased by 0.9% to US$48.65.
The rise comes after the International Energy Agency said the global surplus which has kept prices low was starting to shrink as demand rises and various production cuts begin to take effect.
In a report, the IEA said “global oil demand grew very strongly year-on-year” in the second quarter of the year, up 2.4% during the period.
The IEA also upped its demand forecasts to 1.6mln barrels per day (from 1.5mln), although it did concede that the recent US hurricanes would slow demand in the States.
“Based on recent bets made by investors, expectations are that markets are tightening and that prices will rise, albeit very modestly.”
12pm...Will hefty price tag deter people from buying the new iPhone?
Apple Inc (NASDAQ:AAPL) unveiled its latest iPhones yesterday amid much fanfare.
At its product launch last night in California, the tech giant unveiled three new iPhones including the iPhone X -- a premium version to mark the 10th anniversary of the device -- the iPhone 8 and iPhone 8 Plus.
The premium model has some impressive (if not ground-breaking) new features, including wireless charging and facial recognition security but at £999 it won’t come cheap.
Analysts at UBS said Apple’s pricing structure was higher than it had expected which may affect overseas sales given that all three of the phones will be 25% or so more expensive to UK buyers.
London Capital Group analyst Ipek Ozkardeskaya added: “Although the new iPhone is seen as the future of the smartphone, its price tag will certainly be a drag on its accessibility to a large pallet of consumers, especially when it comes to the biggest growth potential markets such as emerging Asia.”
UK social media users weren’t happy that Apple is charging the same price in pounds as it is in dollars.
Why has Apple made the iPhone X more expensive for UK & Europe customers??? Tf
— Charley; 48™ (@zjmftdt) September 13, 2017
iPhone X USA price: $999
iPhone X UK price: £999
$999 = £752
Why are @AppleSupport charging Brits £247 more than the exchange value? NOT ON!
— Rob M (@PatriotsRob90) September 13, 2017
11.20am...JP Morgan boss: ‘Bitcoin is a fraud’
The boss of JP Morgan has launched a scathing attack on Bitcoin, labelling the crytptocurrency as a “fraud”.
Speaking a banking conference in New York, Jamie Dimon said: “The currency isn’t going to work. You can’t have a business where people can invent a currency out of thin air and think that people who are buying it are really smart.”
“Don’t ask me to short it. It could be at $20,000 before this happens, but it will eventually blow up. Honestly, I am just shocked that anyone can’t see it for what it is.”
He added that he would fire any JP Morgan trader if they were caught trading bitcoin.
His comments come as the digital currency dropped below US$4,000 as rumours continue to swirl that China will move to close its domestic Bitcoin exchanges.
Bitcoin down 7% today. I guess all the guys buying worked at JPMorgan. pic.twitter.com/ShOf8K8IYm
— Tracy Alloway (@tracyalloway) September 13, 2017
11am...Will the BoE raise interest rates tomorrow?
“Today’s UK labour report should add more spice to Thursday’s BoE policy meeting, especially when considering how the static wage growth may pressure the central bank to raise rates sooner than expected to tame inflation.
“While markets widely expect UK interest rates to be left unchanged in September, the main focus will revolve around the tone of the meeting and whether there are any dissents.
“A hawkish interest rate hold, coupled with clues on when the central bank plans to take action, is likely to offer Sterling a welcome boost.”
High inflation and low wage growth. Don't be expecting any interest rate rise soon from the Bank of England.
— Johny (@johnycassidy) September 13, 2017
10.40am...FTSE still in the red despite pound's retreat
The FTSE 100 is still in the red, although the weak earnings data and the sUBSequent fall in the pound have helped it to recover some of the initial losses.
The blue chip index is currently down by 41.7 points, or 0.56%, to 7,359, although it had been as low as 7,340 earlier on.
The reason for the fall is the strengthening pound, which jumped above US$1.33 overnight, although it is now hovering around US$1.327 after the employment data.
Speaking of which, the Office for National Statistics revealed that unemployment fell to 2.9% in the three months to July, although wage growth stagnated at 2.1% - below the 2.3% the market had expected.
To raise or not to raise?
Analysts think the widening gap between wage and inflation growth presents the Bank of England with something of a conundrum.
“While higher inflation is pushing up rate hike expectations, it does not appear to be enough to warrant any tightening this month, explains ETX Capital analyst Neil Wilson.
“The stuttering wage growth figures and sUBSequent drop in cable reflect the fact that the conditions are not yet in place for any tightening.”
Easyjet flies high as it launches new airline alliance
Back to the markets and easyJet PLC (LON:EZJ) was the highest blue chip flyer after it announced a new global airline alliance that will allow its customers to use its website to book long-haul flights with other carriers.
The orange and white airliner jumped 1.8% to £12.15 in early deals, with fellow carrier and BA owner International Consolidated Airlines Group PLC (LON:IAG) up 0.5% to 601.5p.
Supermarket giant Tesco PLC (LON:TSCO) was the biggest faller, down 1.7% to 182, with investors cautious ahead of an update from its takeover target Booker Group PLC (LON:BOK) tomorrow.
Miners were also weighing on the Footsie, with Anglo American PLC (LON:AAL) (down 1.7% to £13.67) and Fresnillo PLC (LON:FRES) (down 1.9% to £15.41) both in the red.
FTSE 250 retailers in demand
On the second tier, Dunelm Group PLC (LON:DNLM) was in demand after telling investors that it had made an “encouraging start to FY18 with good LFL sales growth” in the opening couple of months. Shares zipped almost 6% higher to 651p.
Fresh from beating expectations with its interim results yesterday, JD Sports Fashion PLC (LON:JD.) nudged higher again this morning; up another 5.5% to 379.5p.
9.55am...'Labour market looks strong'
“Another record high employment rate and a record low inactivity rate suggest the labour market continues to be strong. In particular, the number of people aged 16 to 64 not in the labour force because they are looking after family or home is the lowest since records began, at less than 2.1 million.
“Despite earnings rising by 2.1 per cent in cash terms over the last year, the real value of people’s earnings is down 0.4 per cent.”
9.50am...Wage growth misses expectations
Wage growth stagnated once again, rising by 2.1% year-on-year in July, versus the 2.3% analysts had been looking for.
LCG senior market analyst Ipek Ozkardeskaya reckons the widening gap between inflation growth (which came in at 2.9% earlier this week) compared to wage growth could see the Bank of England raise rates in coming months.
Adjusted for inflation, avg weekly earnings are 0.4% lower than a year earlier both including and excluding bonuses https://t.co/pyuMybG6UY
— ONS (@ONS) September 13, 2017
“The weak data revived worries that British households’ earnings growth is clearly not sufficient to compensate for the steeper rise in inflation, but more importantly, the lower purchasing power didn’t translate into a lower inflation so far; the British consumer prices rose by 2.9% year-on-year in August,” said Ozkardeskaya.
“The widening price-wage inflation gap is becoming a serious headache for the Bank of England (BoE) policymakers as lower wages require a dovish monetary policy, but only as long as the inflation allows.
“Despite the slow improvement in wages and street protests from several sector workers, the rising inflationary pressures could encourage some Monetary Policy Committee (MPC) members to vote in favour of an interest rate hike in the coming months.”
She adds that the prospect of a rate rise bodes well for the British pound.
9.35am...Unemployment falls to 42-year low
The unemployment rate has fallen to 4.3% for the three months to July, down from 4.4% in the previous quarter, according to data from the Office for National Statistics.
That’s the lowest level of unemployment since 1975. Wage growth remained steady at 2.1%.
The overall employment rate (75.3%) is the highest since records began in 1971 https://t.co/LBzLZqXEAA pic.twitter.com/snAoctmuYJ
— ONS (@ONS) September 13, 2017
8.45am...Pound weighs on FTSE
The pound was this morning at a year high of US$1.3326 against the dollar as forex traders speculated on a rise in UK interest rates following a sharper than expected spike in August’s inflation number.
Stronger sterling meant the FTSE 100 kicked off in negative territory with exporters hit. The index of blue-chip shares fell 45 points to 7,355.67.
We’ll get a further insight later this morning in to the health of the UK economy when the monthly jobs and wages data is released.
ITV on offer
Shares in broadcaster ITV (LON:ITV) was Footsie’s biggest casualty following a downgrade to ‘sell’ by the London arm of the Aussie broker Macquarie.
“We argue the next decade will be harder than the past one for FTA [free to air] broadcasters, as new consumer models devalue the mass reach of TV advertising,” Macquarie said.
“We would turn buyers again for consolidation and a cyclical upturn, but first we need to see lower consensus estimates.”
Proactive news headlines:
Clinigen Group PLC (LON:CLIN) is closing in on the acquisition of fellow AIM-listed specialty pharma Quantum Pharma PLC (LON:QP.) after the two agreed a £150mln cash-plus-shares deal. Clinigen, which began discussions over a possible takeover last month, said Quantum was a “sound cultural fit” and that the acquisition would add “immediate financial benefits”.
Braveheart Investment Group PLC (LON: BRH) has announced that one of its strategic investments, Kirkstall Limited - a biotechnology company operating within the global organ-on-a-chip market - has commenced an investor marketing exercise. The AIM-listed fund management and strategic investor group said the board of Kirkstall is seeking to raise up to £2.5mln in a private placing at a pre-money valuation of £5.6mln.
Alliance Pharma plc (LON:APH) is “strategically positioned for growth” following last year’s acquisition of the healthcare assets Sinclair Pharma, according to chairman Andrew Smith. His assessment was made alongside interim results, which showed revenue up 8% at £50.3mln and underlying earnings (EBITDA) ahead 3% at £13.6mln in the six months to June 30.
Daily gold production more than doubles at Anglo Asian Mining Plc (LON:AAZ) as the Ugur open pit mine commences production.
ANGLE PLC (LON:AGL) has signed an option agreement over an advance that may open a “whole new area of cancer diagnostics”. The deal is with the Barts Cancer Institute and focuses on the breakthrough made by its researchers in determining the role of megakaryocytes.
Cancer-focused immunotherapy developer Scancell Holdings Plc (LON:SCLP) is looking to bring on board one or more partners to help take its ImmunoBody and Moditope platforms to the next stage As of 30 April, the company had £2.7mln in the bank and it expects the coffers to need topping up as it prepares for a phase II trial of its SCIB1 skin cancer treatment over in the US.
Trinidad-based oiler Columbus Energy Resources PLC (LON:CERP) expects to become cash flow positive by the end of 2017 following the start of a waterflood programme at the Goudron field. The company, formerly known as LGO Energy, received a permit to start the programme yesterday and expects production to rise to 550 barrels per day by the end of 2017 and to 900bpd by mid-2018.
OptioBiotix Health PLC (LON:OPTI) is planning to hook-up with Bened Biomedical of Taiwan to explore licensing and sales opportunities over the next 12 months. The partnership would see OptiBiotix expand its product suite to include psychobiotics, where gut bacteria communicates with the brain to affect behaviour and bodily responses.
Katoro Gold PLC (LON:KAT) has announced that the Tanzanian National Environmental Management Council has issued a registration letter for the environmental impact study (ESIA) at the company's Imweru Project. The AIM-listed gold exploration and development company said receipt of the registration letter confirms successful completion of Phase 1 of the ESIA and permission to continue with Phase 2, which has already commenced.
Shares in portfolio analytics provider StatPro Group PLC (LON:SOG) opened higher after it announced a contract extension with a large European asset manager.
Range Resources PLC (LON:RRS) has spudded its QUN 161 development well in Trinidad. The well, on the Morne Diablo field, will go down to a depth of 2,200 feet, which is scheduled to take two weeks to reach, and target the Lower Forest and Upper Cruse horizons.
Chariot Oil & Gas PLC (LON:CHAR) told investors that as it awaits the start of drilling at the Rabat Deep exploration prospect, due in early 2018, the near-term focus is on efforts to strike new partnerships for other priority projects.
6.45am: Footsie called lower
UK stocks were expected to open modestly lower despite a solid showing yesterday on Wall Street, with a resurgent pound weighing on sentiment.
Spread betting quotes indicated the FTSE 100 would open 7 points lower at 7,393 after falling 13 points yesterday to close at 7,401.
Stateside, where the usual new Apple iPhone launch hysteria was in full swing, the S&P closed at at a new high of 2,496, up 8, while the Dow Jones closed at 22,119, up 61.
“Apple shares advanced to $163.96 in New York as the company revealed the much-expected iPhone X, yet closed the day slightly lower on the back of a mixed bag of critics,” noted Ipek Ozkardeskaya, at LCG.
“Although the new iPhone is seen as the future of the smartphone, with its augmented reality feature, its price tag will certainly be a drag on its accessibility to a large pallet of consumers, especially when it comes to the biggest growth potential markets such as emerging Asia,” she added.
In the last knockings, Asian markets were mixed on Wednesday morning. In Tokyo, the Nikkei 225 was up 93 at 19,871 but Hong Kong's hang Seng was down 69 at 27,903.
Looking at corporate news flow, the annual results from homewares retailer Dunelm Group PLC (LON:DNLM) could well be grim, given the recent profit warning that did for the chief executive, John Browett.
“Although 2017 has been a tough year for the business, we remain positive on Dunelm,” said Numis, which expects annual pre-tax profit of £109.8mln.
House builders have been under pressure of late, with some calling the top of the market, so the full-year statement from Galliford Try plc (LON:GFRD) will be keenly followed – especially the outlook statement,
Like many of its sector peers, Galliford has said that it has so far managed to shrug off Brexit worries as the housing market remains supported by cheap borrowing costs, low unemployment, a supply shortage of homes and the government’s Help to Buy scheme and planning reform.
However, the outlook remains uncertain as the UK negotiates its withdrawal from the European Union.
Rivals Barratt Developments and Berkeley Group have both warned of a slow-down in the London housing sector in recent weeks.
Significant events expected:
Finals: Dunelm Group PLC (LON:DNLM), Galliford Try PLC (LON:GFRD), Haynes Publishing Group PLC (LONLHYNS), Town Centre Securities PLC (LON:TOWN), Wilmington PLC (LON:WILT)
Interims: Advanced Medical Solutions Group PLC (LON:AMS), Alliance Pharma PLC (LON:APH), Columbus Energy Resources (LON:CERP), Epwin Group PLC (LON:EPWN), Eve Sleep PLC (LON:EVE), Gaming Realms PLC (LON:GMR), Ingenta PLC (LON:ING), Just Group PLC (LON:JUST), Soco InternationalPLC (LON:SIA), SQS Software Quality Systems AG (LON:SQS), Sigmaroc PLC (LON:SRC), Ten Entertainment Group PLC (LON:TEG)
Economic data: UK unemployment, average earnings US forward PPI
Around the markets
- Sterling: US$1.3305, up 0.21 cents
- Gilts: The 10-year yield is 1.137%
- Gold: US$1,334.90 an ounce, up US$2.20
- Brent crude: US$54.16 a barrel, down 11 cents
Business headlines
The Times
Regulator warns of ‘scam’ virtual currencies: The City watchdog has warned about the perils of investing in virtual currencies such as bitcoin
Sky takeover deal sent to competition authority: 21st Century Fox’s £11.7 billion bid to take over Sky has suffered a setback after the culture secretary said that she was minded to refer the deal to regulators over concerns about broadcasting standards.
Civil servants really will be robots, says Hammond: Robots will be running large swathes of government before long as artificial intelligence is deployed to help the state do more with less, the chancellor has said.
Daily Telegraph
Apple iPhone X: UK release date, price, latest news and features: Apple has unveiled the iPhone X, its premium smartphone costing more than £999 that showcases the latest technology, including an edge-to-edge OLED display, wireless charging and facial recognition security.
Energy supplier switching surges after British Gas price hike: The number of consumers switching to a new energy supplier soared in the wake of a price increase from British Gas, creating the market’s biggest ever year on year surge last month.
Bell Pottinger succumbs to South Africa scandal as agency falls into administration: Bell Pottinger has succumbed to the scandal of a divisive campaign it ran for controversial billionaire family the Guptas in South Africa and filed for administration.
The Guardian
Betting firms could be fined over ads 'targeting vulnerable people': Advertising disguised as news claimed gambler cleared debts and funded medical treatment using online casino games
iPhone X: new Apple smartphone dumps home button for all-screen design: New model with 3 November release date promises better cameras, ability to unlock with facial recognition, animated emojis, longer battery life and wireless charging
UK Apple growers' labour shortage 'pushing them towards cliff edge': Industry body warns over need for seasonal workers after Brexit as growers face 20% shortfall in supply of labour
World's wealthiest families keep getting richer as markets boom: Only a tiny number of super-rich families lost money last year, and three in four increased their fortunes, research finds
Financial Times
Fast food giant McDonald's sees shares sag as it warns on sales
Air Berlin's sales plans put at risk by pilot action, airline says
Philip Morris International has pledged US$1bn over the next 12 years to a foundation dedicated to eliminate the smoking of tobacco
A US government agency has pointed the finger at Tesla in an investigation into a fatal car crash involving a driverless car
Daily Mail
Carillion secretly protected bosses’ £4 million bonuses just months before £600 million accounting crisis
Now shamed Provident boss steps down from board of Britain’s biggest debt collection firm
City AM
Toys R Us explores bankruptcy
Center Parcs vies with private equity firms in sale of Forest Holidays
Costa owner Whitbread’s shares slump as analysts say the end of coffee chain growth is in sight