FTSE 100 closes up
US/China trade talks set to begin
Wall Street mixed
Trump's ex-lawyer admits to paying hush money
Miners gain
FTSE 100 closed ahead amid mixed global markets with miners propping up gains.
The Footsie closed at 7,574 - up around eight points, or 0.11%.
The FTSE 250 though saw red, just closing near flat, or 0.36 points lower at 20,642.
In the US, the Dow Jones Industrial Average was down around 22 points, while the S&P 500 added 7.6 as the market digests the latest on President Trump's behaviour.
David Madden, analyst at CMC Markets UK, said: "Stock markets are mixed as trade talks still dominate the headlines.
"Chinese delegates are set to meet US representatives today to discuss trade. The meeting will hopefully lay the groundwork for a meeting between President Trump and Chinese Premier in November.
"European car makers are lower after Mr Trump threatened to impose a 25% tariffs on EU cars that are imported into the US. The announcement from the US president last night is a reminder to the markets as to how unpredictable he can behave."
In the currency markets, the pound was down 0.12% against the Euro, and up 0.10% aginst the US dollar.
Top riser on Footsie was Ocado Group (LON:OCDO), which added 1.9% to 1,100p. Silver giant Fresnillo (LON:FRES) also went higher, adding 1.78% to 946.8p, as the gold price firmed.
3.25pm: FTSE ahead…just
The FTSE 100 has given up some of the gains it made early this afternoon although it is still ahead for the day, which is a damn sight better than how things looked like panning out early on.
The index is up 10.3 points, or 0.1%, to 7,576.0 with less than hour to go on Wednesday.
It had benefitted from a slightly weaker pound earlier on, although sterling has since recovered those, helped out by Trump’s troubles which have put more pressure on the dollar. At the time of write, £1 gets you US$1.293.
Fresnillo PLC (LON:FRES), the world’s largest silver miner, is the top riser, up 2.1% to 949.4p, closely followed by online grocer Ocado Group PLC (LON:OCDO) which has gained 2% to 1,101p.
London’s oil supermajors BP PLC (LON:BP.) (up 0.6% to 555.1p) and Royal Dutch Shell PLC (LON:RDSB) (up 1% to 2,568p) have also kept the footsie’s head above water, boosted by higher oil prices.
Down at the bottom, blatinum specialist Johnson Matthey PLC (LON:JMAT) has followed the price of the metal lower; it is down more than 4% to 3,490p to sit dead last on the leaderboard.
Easyjet PLC (LON:EZJ) is another hefty loser, dropping 3.9% to 1,550p.
3.05pm: Rio undervalued compared to peers, says Liberum
Rio Tinto PLC (LON:RIO) is down year-to-date but with the Chinese property sector reviving, it is time to stop selling the shares, Liberum argues.
The stock is not only down on the year but has also de-rated versus the sector and has performed significantly worse than its perennial rival, BHP Billiton.
The broker has whacked up its price target to 3,600p from 2,750p and upgraded the stock to 'hold' from 'sell'. The new price target factors in the sale of Grasberg for US$3.5bn.
Rio shares are up 0.6% in late afternoon trade at 3,690p, although it had climbed above 3,700p earlier in the day.
2.50pm: Cautious start in New York
US stocks are now into the longest bull market ever, with the market rising more than 300% since the run started back on March 9 2009 – that’s 3,453 days.
That said, it’s been a fairly cautious start in New York ahead of the talks between Chinese and US officials due to take place today. Of course, there’s also the issue of President Trump which has brought a political risk to proceedings.
Anyway, the Dow Jones is down 0.1% to 25,799, the tech-laden Nasdaq has opened 0.1% lower at 7,848.7, while the broader S&P 500 is only 1 point down at 2,860.9.
Alive for 3,453 days, the bull market in the S&P 500 today becomes the longest ever recorded by some measures https://t.co/KE5RcNiovp
— Bloomberg (@business) August 22, 2018
2.30pm: Trumps responds
Donald Trump has responded to the claims made by his former lawyer, Michael Cohen, in court yesterday.
Cohen admitted to paying off alleged mistresses of Trump in the run-up to the election but insisted it was at the direction of "the candidate".
Trump has hit back today though thorugh his favoured outlet, Twitter.
If anyone is looking for a good lawyer, I would strongly suggest that you don’t retain the services of Michael Cohen!
— Donald J. Trump (@realDonaldTrump) August 22, 2018
Michael Cohen plead guilty to two counts of campaign finance violations that are not a crime. President Obama had a big campaign finance violation and it was easily settled!
— Donald J. Trump (@realDonaldTrump) August 22, 2018
2.10pm: Ceres Power boss on Bosch tie-up
1.45pm: Debenhams hopes former Domino’s CFO will deliver
Rachel Osborne, who quit as chief financial officer (CFO) of Domino's Pizza in June, has pitched up at beleaguered department stores group Debenhams PLC (LON:DEB).
Osborne will start her new gig as CFO of Debenhams on September 17, replacing Matt Smith, who informed the board back in April of his intention to step down from the role.
“She has deep experience across a variety of retail and customer-facing businesses and her commercial expertise will be invaluable as we build a strong financial foundation to underpin the transformation of Debenhams," said Sergio Bucher, the chief executive officer of Debenhams.
As well as working for pizza delivery outfit Domino's, Osborne has also done stints at John Lewis and Kingfisher.
1.10pm: Commodities boost FTSE 100
With most of the City heading for lunch, the FTSE 100 is up 21.4 points to 7,587.2, holding its gains over the past couple of hours, having kicked off the day in the red.
Comments from Michael Barnier that the EU and UK are unlikely to reach a deal before the October deadline caused the pound to give up some of yesterday’s gains as it slipped to just below US$1.29 against the dollar.
That helped the index to perk up as a stronger pound makes UK goods cheaper to foreign buyers while it also makes the blue-chips’ overseas earnings worth more once they’re converted back.
Aside from that, a small jump in oil prices has helped BP PLC (LON:BP.) (up 0.4% to 554.4p) and Royal Dutch Shell PLC (LON:RDSB) (up 0.7% to 2,563p) – two of the footsie’s heavyweight stocks – to reverse their earlier losses.
A smattering of green in the commodity sector, aside from Antofagasta PLC (LON:ANTO) which is down 1.2% to 811p, has also boosted the FTSE 100.
Easyjet PLC (LON:EZJ) is still the top blue-chip faller, losing just over 3% to sit at 1,561p.
12.50pm: Ryanair compensation cheques bounce
Ryanair Holdings PLC (LON:RYA) has apologised after unsigned cheques sent to customers as compensation for disrupted flights bounced.
The budget airline posted 20,000 cheques to customers in July after air traffic control problems and pilot strikes led to thousands of flight cancellations across Europe this summer.
However, up to 190 of those cheques were not signed, meaning they bounced when customers tried to cash them.
“These cheques were re-issued last week and we apologise sincerely for this inconvenience,” a Ryanair spokesman said.
This the cheque which started it. Thanks to @GordonFong #Ryanair pic.twitter.com/U821RLV1ve
— Julian Sturdy (@juliansturdy1) August 22, 2018
12.35pm: Subdued start expected on Wall Street
After a positive close, Wall Street benchmarks are seen starting lower on Wednesday as President Trump is centre stage and traders await more earnings along with the US-China trade talks.
The Dow Jones Industrial Average closed 63 points higher at 25,822, while futures today are down 44 points.
The tech-heavy Nasdaq gained over 38 to 7,859, but spreadbettors expect the index to drop nine points when it re-opens in two hours’ time.
As for the broader-based S&P 500, that added nearly six points at 2,862 on Tuesday, is expected to fall 5.25 points at the opening bell.
In the frame today will be the US/China trade talks, although they are not expected to lead to much, while court news hangs over from Tuesday.
Yesterday, President Trump’s lawyer Michael Cohen pleaded guilty to various charges and implicated the president too, saying he told his lawyer to arrange payments to silence women alleged to have had affairs with Trump.
12.20pm: Accounts of 20,000 Superdrug customers hacked
Superdrug has warned its online customers to change their passwords after the company was contacted by hackers claiming to have accessed thousands of accounts.
The health and beauty retailer said the attackers claimed to have stolen the details of 20,000 customers although it had only seen evidence that 386 customers had been affected.
Among the stolen information were names, addresses, date of birth and phone numbers, but Superdrug stressed no credit card details had been accessed.
The chain believes there is “no evidence” to suggest its systems had been hacked, claiming the criminals had got email addresses and passwords from other sites and used them to log into their Superdrug accounts.
— Superdrug (@superdrug) August 21, 2018
12pm: Oil prices climb higher
Oil prices are on the rise today, with Brent crude up 1.5% to US$73.73 a barrel.
There are a couple of reasons for the move higher: firstly, there was a bigger-than-expected drop in US inventories last week; and secondly, the prospect of renewed US sanctions on Iran – the third largest producer in OPEC.
The weakness of the dollar is also supporting the oil price as it makes it cheaper to foreign buyers.
The pick-up is helping London’s oil supermajors BP PLC (LON:BP.) (up 0.5% to 554p) and Royal Dutch Shell PLC (LON:RDSB) (up 0.8% to 2,565p) which, like the FTSE 100, have reversed this morning’s losses.
11.40am: London accounts for 40% of global forex trading
Reuters' analysis: foreign currency trading in London up 23% April 2018 on April 2016 to a record daily average of $2.7 trillion — double growth rate of New York, nearest rival. London dominated forex for 50 years. Now more dominant than ever. Accounts for 40% all world’s forex.
— Andrew Neil (@afneil) August 22, 2018
11.25am: Major Sainsbury’s shareholder backs Asda merger
Investment giant Invesco Perpetual has given its backing to the proposed £12bn merger between J Sainsbury PLC (LON:SBRY) and Asda.
Invesco, Sainsbury’s third largest shareholder, said the deal would allow the enlarged group to go “toe-to-toe” with Tesco PLC (LON:TSCO), reports The Times.
Fund manager Martin Walker told the paper: “There are some real positives here in this deal and when I appraise it financially the earnings accretion are huge.
“The synergy costs are conservative and could be much bigger, but what I am most interested in is that the deal would appear to offer returns in excess of Sainsbury’s cost of capital.”
Sainsbury’s and Asda first unveiled their plan back in April, promising to create a super supermarket group with revenues of £51bn and synergies of £500mln, which would make it bigger than Tesco.
11.10am: Uber to pay US$1.9mln to settle sexual harassment claims
Controversial taxi-hailing app firm Uber is proposing to pay US$1.9mln to current and former workers who claim they were victims of sexual harassment.
The claimants stand to receive an average of just under US$34,000 each. In addition, the 56 claimants will receive an average of almost US$11,000 as part of a class action case brought by 485 people claiming discrimination.
A hearing to decide whether to approve the sexual harassment settlement is set for November 6.
Uber said the amounts it is set to pay were “fair, reasonable and adequate”.
Last Thursday, the privately-owned company reported second-quarter adjusted net revenue of US$1.75bn, up from US$1.5bn in the first quarter, as second-quarter bookings rose by 16%.
10.50am: Back in black
The FTSE 100 kicked off in the red this morning, but it has since recovered its poise somewhat and is currently up 11.8 points to 7,577.5.
The pound has given up some of yesterday’s gains against a struggling dollar, although it is still within touching distance of the US$1.29 handle – a much improved position from Monday.
On the company side of things, housebuilders are helping to drag the index into positive territory. Persimmon PLC (LON:PSN) is the top riser, jumping 1.5% to 2,483p, boosted by follow-through buying after yesterday’s solid results. That is pulling rival Barratt Developments PLC (LON:BDEV) (up 1.1% to 549.2p) with it.
Low-cost carrier Easyjet PLC (LON:EZJ) sits at the bottom of the footsie, down 2.2% to 1,574p, with Russian miner Evraz PLC (LON:EVR) not too far behind (down 2.1% to 475.4p).
10.30am: Laura Ashley looking pretty despite 98% plunge in profits
Homeware retailer Laura Ashley Holdings PLC (LON:ALY) is looking pretty this morning, despite reporting a whopping 98% fall in annual profits.
Pre-tax profits plunged to £0.1mln in the year to June 20 from £6.3mln last year, largely due to a £4.7mln impairment on the value of its Singapore property.
But the shares are up by more than a fifth to 5.3p, and it seems like it could actually be due to the Singapore property.
Alongside the results, Laura Ashley revealed it had sold the property for £30.3mln, not far off from what it had paid in 2015. Investors on social media seemed relieved just to have escaped the “ludicrous investment” without too much damage.
Read more here.
10.05am: Record number of UK construction companies
The number of construction firms in Great Britain increased 6.2% in 2017 - reaching its highest level on record - with marked growth in the East and the North West of England https://t.co/fnQSIm8CQj
— ONS (@ONS) August 22, 2018
9.40am: Trump in trouble?
President Trump’s criticism of the US Federal Reserve’s interest rate policy on Monday night weighed on the dollar, and the greenback has been dealt a fresh blow overnight.
Trump’s lawyer Michael Cohen pleaded guilty to various charges and implicated the President into the bargain, saying he told his lawyer to arrange payments to silence women alleged to have had affairs with Trump.
“This looks to have introduced an element of political risk to the USD which may be weighing on sentiment,” said Markets.com analyst Neil Wilson.
“The dollar index has retreated to just above the 95 handle having brushed 97 in recent days. Combined with the president’s swipe at the Fed, there are now some clear headwinds for the dollar bulls, but ultimately tariffs and yield differentials should support USD.”
He added: “US-China talks this week are not expected to produce much, but we could see it result in a date for a Trump-Jinping meeting.”
Basic facts:
1) Trump’s lawyer committed a federal crime in the hush money payments he made during the campaign.
2) Trump was aware of those payments. We have audio.
3) Cohen says Trump directed the crime and repaid him for it.
Trump is in serious legal & political trouble.
— Brian Klaas (@brianklaas) August 22, 2018
9.10am: Capita pinches Go-Ahead CFO
The support services group Capita PLC (LON:CPI) has poached the chief bean-counter of bus company Go-Ahead Group PLC (LON:GOG) as part of the former’s rebuilding process.
Patrick Butcher will replace Nick Greatorex, who signalled his intention to step down as Capita chief financial officer last month.
According to reports, former Network Rail finance boss Butcher will be a critical component of the rebuilding plan unveiled earlier this year by Jonathan Lewis, Capita's new chief executive.
Lewis kicked off the process of rebuilding the ailing group, which is responsible for collecting the TV licence fee, with a £700mln rights issue and sale of £400mln of unwanted businesses.
As part of the revitalisation process, the CEO and his team expect to find £175m in cost savings by 2020, while boosting profit margins by focusing on "technology-led complex activities".
8.45am: Cautious start for the blue-chips
The FTSE 100 made a cautious start to proceedings with traders keeping their powder dry ahead of trade talks between the US and China later.
The index of blue-chip shares fell 19 points to 7,546.87, with the unfolding story around President Trump’s personal lawyer adding further to the uncertainty.
Michael Cohen pleaded guilty to violating campaign finance laws by arranging hush payments to two women Trump was alleged to have had affairs with.
Michael Hewson of CMC Markets said: “[This] could well see investors look to take some profits today after a fairly mixed session in Asia and a lower open in Europe.
“Cohen’s plea, which puts the President under the spotlight even more, and opens him up to charges of criminal conduct, has raised concerns that he might be vulnerable to impeachment in the coming months.
“While this is unlikely in the short term, any shift in the balance of power after the mid-terms in November, could increase that prospect if the Republicans lose their majorities.”
The movements on the Footsie were fairly muted, with Persimmon (LON:PSN) the beneficiary of follow-through buying after a solid set of results Tuesday.
Dropping down to the FTSE 250, there was a rare day in the sun for Provident Financial (LON:PFG), which benefited from an upgrade to ‘hold’ from the London arm of the German bank Berenberg.
Insurer Lancashire Holdings (LON:LRE) was given the same treatment.
Oxford Biodynamics (LON:OBD) rose 3% after receiving £10mln of investment from a Chinese investment house.
6.45am: US up, but FTSE 100 called lower
Some US indices may have reached new highs yesterday but London is set to adopt the Shania Twain pose – that don't impress me much.
Having fallen 26 points to close at 7,566 on Tuesday, the FTSE 100 was expected to add another 21 points to those losses at the outset.
Focus today is likely to be on trade talks between US and China. President Trump has played down the possibility of a successful outcome to the talks, which may account for the subdued mood in London.
Trump has also taken another swipe at the Federal Reserve's recent decision to hike interest rates; the Fed is supposed to be an independent institution but Trump's comments sent the dollar and US stock market futures lower, which could have an impact on the many big dollar earners in London today.
The minutes of the latest meeting of the Federal Open Market Committee (FOMC) at the US Federal Reserve are due for release today, and could provide insight into any concerns regarding current US trade policy and potential downsides to the ongoing effect of tariffs and a softening of business sentiment.
Notwithstanding the above, it was a good day for US markets yesterday, with the Dow Jones rising 64 to 25,822 and the S&P 500 climbing 6 to a new high of 2,863.
In Asia, the Nikkei 225 was 124 higher at 22,344 heading towards the close while in Hong Kong, the Hang Seng was up 104 at 27,857.
Back in the UK, today will see maiden interim results from Czech cybersecurity software firm Avast PLC (LON:AVST), which floated in London in May.
Analysts at UBS are looking for US$408mln in continuing first-half billings and US$390mln in continuing first-half revenues, representing underlying growth of 8% in both cases.
Infrastructure specialist Costain Group PLC (LON:COST) will be aiming to at least meet the expectations set by a first-half trading update in July when it releases its half-year results.
The firm said in the update that it was on track to meet its full-year expectations as its order book remained unchanged from a year earlier at £3.7bn while it also maintained a preferred bidder position of £400mln and high tendering levels in the first half.
Significant announcements expected:
Interims: Avast PLC (LON:AVST), Costain Group PLC (LON:COST), Empresaria PLC (LON:EMR), Grafton Group PLC (LON:GFTU), Headlam Group PLC (LON:HEAD), Hansteen Holdings PLC (LON:HSTN)
Trading updates: Proactis Holdings PLC (LON:PHD), Venture Life Group PLC (LON:VLG)
Economic data: US existing home sales; US FOMC minutes
Around the markets
- Sterling: US$1.2914, up 0.14 cents
- 10-year gilt: yielding 1.268%
- Gold: US$1,201.60 an ounce, up US$1.60
- Brent crude: US$72.88 a barrel, up 26 cents
- Bitcoin: US$6,688.17, up US$241.32
Proactive news headlines
Kodal Minerals PLC (LON:KOD) said high-grade mineralisation has been returned for the Sogola-Baoule prospect in Mali where mineralisation remains open along strike.
BigDish PLC (LON:DISH) said it has identified yield management, a form of dynamic pricing structure, as an opportunity to expand business in its Asian markets.
Regenerative medicines group Collagen Solutions PLC (LON:COS) is on track to hit its financial and operational targets this year, chief executive Jamal Rushdy will say at today’s annual general meeting.
Strategic Minerals PLC (LON:SML) has reported encouraging first results from drilling at its Redmoor project in Cornwall. Tungsten was intersected in the two holes completed so far, which were drilled to depths of up to 730m.
Genedrive PLC (LON:GDR) has appointed Chris Yates, the chief executive and co-founder of diagnostics group Abingdon Health, as non-executive director with immediate effect.
Chagala Group Limited (LON:CGLO) said its full year dividend of US$0.025 per share will be paid on or around September 17.
appScatter Group PLC (LON:APPS) has raised £1mln before costs via a share placing of more than 1.4 million ordinary shares.
Business news headlines
The Times
London has tightened its grip on global currency trading as a study conducted by Reuters show trading volumes in London had risen by 23% in the two years to April, reaching a record $2.7 trillion a day.
Manufacturing growth in the UK remained strong this month on the back of strong global growth and rising exports, fuelled by weaker sterling, but trade war tensions and a no-deal Brexit pose threats to that growth, the CBI has warned.
Wall Street extended a rally yesterday, hitting a new intra-day high that is almost certain to turn into the longest bull run on record.
The sushi restaurant chain Yo! Sushi said that total sales had risen by 1.7% to £89.9 million in the year to 27 November, up from £88.4 million 12 months earlier, as it opened six new sites in Britain and two franchised restaurants in Paris and Sydney.
The Daily Telegraph
Despite the summer heatwave driving shoppers to the tills, Sainsbury lagged rivals as the worst performer of the UK's Big Four supermarkets ahead of its takeover of rival Asda.
Superdrug has advised thousands of its online customers to change their passwords after hackers attempted to blackmail the high street retailer.
BHP Billiton, the world's biggest mining company, announced a 42% jump in its final dividend to a record 63 US cents a share, taking total payouts for the year to $2.5 billion.
Game Digital has reported declining sales due to waning demand for second-hand video games, forcing the retailer to cut costs by renegotiating leases with landlords.
The Guardian
Mike Ashley’s Sports Direct has struck a deal with the landlord of House of Fraser’s flagship store on Oxford Street in central London to keep it open despite the collapse of the chain.
Persimmon reported a 13% increase in profits in the first half of the year, boosted by the government’s help-to-buy scheme and competitive mortgage deals.
Daily Mail
Pizza Hut’s UK business plunged to a £7 million loss last year as it was hit by competition in the restaurant sector.
Shares in Hostelworld tumbled 5.1% after it revealed that families shunned foreign summer holidays and soaked up the sun at home.