FTSE 100 Live 26 January: Index closes up 100 points in best day of 2024, another US 'soft landing' boost
The contrasting fortunes of retailers Superdry and WH Smith are in focus after they issued updates today.
The struggling fashion chain said a clearance sale may be needed to improve its cash position, having recorded a 23.5% drop in revenues in a tough trading climate.
Meanwhile, WH Smith is confident of another year of significant growth after revenues rose 15% in its largest division of UK travel.
FTSE 100 Live Friday
Superdry results reveal trading pain
WH Smith travel sales surge
UK consumer confidence at two-year high
Friday 26 January 2024 17:11 , Daniel O'Boyle
Get ready for the weekend with the latest from City Spy.
This week, Spy takes a look at how Clifford Chance has been enforcing its back-to-office policy, peruses Bloomberg's classifieds section for millionaires' unwanted Christmas gifts, prepares to lose even more legroom on British Airways' London City Airport flights and examines whether Paula Vennells and her charity are singing from the same hymnsheet.
FTSE 100 closes at 7,635.09 in best day of year
Friday 26 January 2024 16:49 , Daniel O'Boyle
The FTSE 100 closed at 7,635.09 today, its best day of the year.
The big rise also means that this was the best week of 2024 for London's top flight, which gained 2.3% in five days.
Top risers included Croda International and Diageo, which were both up mroe than 5%.
Centrica was the biggest faller.
Government strikes Vodafone agreement after UAE stake national security fears
Friday 26 January 2024 15:44 , Daniel O'Boyle
The Government has reached an agreement with Vodafone to address national security concerns related to a United Arab Emirates-backed telecoms group’s stake in the company.
A number of “proportionate measures” will now be put into place at the London-listed telecoms firm to address concerns and allow it to put a director from the investors on its board.
On Wednesday, Deputy Prime Minister Oliver Dowden used new powers to declare there were national security risks related to Emirates Telecommunications Group, which does business as Etisalat by e&, holding an almost 15% stake in Vodafone.
Incoming National Lottery firm says plans for new games delayed until 2025
Friday 26 January 2024 15:25 , Daniel O'Boyle
The incoming operator of the National Lottery has admitted plans for new draw-based games have been delayed until 2025 after its handover has been hampered by legal wrangling.
Allwyn’s recently-appointed UK boss Andria Vidler told the PA news agency that the group will not be able to make any of the bigger changes it had pledged to introduce until next year.
The group also said that delays to the new games it had hoped to introduce in 2024 will impact sales and hold back the amount of money it can give to good causes in the early part of its 10-year licence.
Energy firms vowing to cut emissions ‘will produce billions of tonnes of CO2’
Friday 26 January 2024 14:49 , Daniel O'Boyle
Oil and gas companies that signed up to an emissions reduction plan at Cop28 will collectively produce more than 150 billion tonnes of carbon dioxide equivalent by 2050, according to analysis by Global Witness.
That is around 454 times more than the UK emitted in 2022, with campaigners calling the Cop28 plan “marketing and spin”, as it does not include cutting emissions from the oil and gas they produce.
The climate conference in Dubai last month was the first time in its near 30-year history that countries agreed to move away from using fossil fuels.
Market snapshot: FTSE 100 up 1.5%
Friday 26 January 2024 14:09 , Daniel O'Boyle
Take a look at today's market snapshot as the FTSE 100 has continued to soar
US core PCE inflation 'closest to target in last three years'
Friday 26 January 2024 14:04 , Daniel O'Boyle
Charles Hepworth, Investment Director, GAM Investments, says: "The Federal Reserve’s preferred measure of inflation was just released for the month of December 2023 and it keeps alive the chances of a rate cut in March. PCE (Personal Consumption Expenditures), as a measure of inflation differs, to the wider known CPI index in that it only measures goods and services consumed by individuals and that is why the Fed prefers it as a broad gauge of inflation when judging policy.
"Core PCE was forecast to show 0.2% growth over the month and it came in in-line with that and means the yearly PCE inflation rate is now 2.9% - much closer to the Fed’s target rate of 2% than it has been at any time over the last three years."
US core PCE at 2.9%
Friday 26 January 2024 13:33 , Daniel O'Boyle
The US got another 'soft landing' boost today, as the Federal Reserve's favourite inflation gauge dropped below 3%.
Personal Consumption Expenditure (PCE) inflation in the US came to 2.9% for December, slightly below the forecasted 3%.
That will fuel hopes that cuts from the US central bank could be on their way soon.
Recession fears 'unlikely to derail bank’s plans on rates'
Friday 26 January 2024 12:57 , Daniel O'Boyle
Looking ahead to next week's Bank of England meeting, Matthew Ryan, Head of Market Strategy at global financial services firm Ebury, says recession fears are unlikely to change the Bank's 'higher-for-longer' strategy.
He said: “The Bank of England is almost certain to keep policy unchanged on Thursday, although there will likely remain a lack of consensus among MPC members, and a divided vote on rates appears highly probable. We are expecting another 6-3 split, as the positive news on wages since the last meeting was offset by the upside surprise in the December inflation report.
“The committee will have a difficult balancing act on its hands at upcoming meetings, as it begins to pivot towards an easing bias, while signalling that cuts are not on the way just yet. We think that Thursday’s statement will again reiterate that further hikes are possible, although we expect this phrase to soon be removed, with a greater emphasis placed on the bank’s ‘higher for longer’ stance.
“We also expect the bank to flag ongoing concerns over the health of Britain’s economy, and warn over the risk of recession. While the recent PMI data suggests that the outlook is improving, the latest retail sales report was a massive disappointment, and will no doubt rekindle unease on the state of consumer demand. This is unlikely to derail the bank’s plans on rates, however, as data on both inflation and wages remain far too high for comfort. We are subsequently not pencilling in the first UK rate cut until at least the June MPC meeting.”
Read more on the Bank's upcoming decision here
All eyes on US core PCE this afternoon
Friday 26 January 2024 12:51 , Daniel O'Boyle
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, says: “The big names of the UK stock market have been lifted higher in the final trading session of the week. Stocks have been given a boost from better-than-expected economic data in the US yesterday.
"Our friends across the pond are seeing economic growth outstrip expectations, while also enjoying the fact that inflation pressures are reducing, according to the personal consumption expenditures index. There are still a lot of plates for the Federal Reserve to spin, and all eyes will now be on PCE numbers later today, which are a favoured inflation gauge.
"The FTSE has also been lifted by news of UK consumer confidence hitting a two-year high. GfK’s consumer confidence index pushed to minus 19 in January, from minus 22. So while there’s still clearly further room for things to improve, the average consumer’s concerns are reducing as hopes for interest rate cuts and lower inflation trickle through. Retailers who have faced a tough Christmas will be hoping these better moods translate into improved spending."
Diageo rises following LVMH share jump
Friday 26 January 2024 12:48 , Daniel O'Boyle
Diageo shares are up 4.5% today, partly due to read-across from the success of LVMH's spirits brands.
The drink maker's shares struggled in 2023, especially after a profit warning late in the year. They are still down 18.3% in the past year.
Market snapshot: FTSE 100 up almost 100 points
Friday 26 January 2024 12:28 , Daniel O'Boyle
The FTSE 100 has built on its early gains, and looks set to be in for its best day and week of an otherwise-disappointing 2024, unless US data to come this afternoon disappoints.
Take a look at our market snapshot.
LVMH shares soar after results yesterday
Friday 26 January 2024 11:47 , Daniel O'Boyle
LVMH shares are up more than 11% today in Paris, after the luxury giant was much less affected by a global slowdown in high-end spending than analysts had expected.
Shares have climbed to €764.50, the highest since early September, on the back of yesterday's results.
The share price rise for the owner of Louis Vuitton and Christian Dior has added around €20 billion to the personal fortune of Bernard Arnault, one of the world's richest men.
When combined with a sharp fall in Tesla's share price yesterday, Arnault has now closed the gap between himself and Elon Musk at the top of the global rich list by more than $30 billion in the space of less than 24 hours.
An LSE "in cahoots" with Westminster needs a shake-up
Friday 26 January 2024 11:27 , Simon English
The advert on the seat of the London black cab features pictures of the Eiffel Tower, the Statue of Liberty and the Kiyomizu-dera – a temple in Japan.
The strap: “We may have London in our name, but we create possibility in 190 markets.”
To critics, that ad serves as an example of exactly what is wrong with the London Stock Exchange Group. It is downplaying London rather than promoting it.
Battle for the heart of the City: Bankers say the LSEG is failing London
Friday 26 January 2024 10:33 , Daniel O'Boyle
BANKERS are increasingly worried that the London Stock Exchange Group is ignoring its home market to pursue international expansion plans in ways that are damaging the City.
With a dearth of new stock listings, a moribund FTSE 100 and big tech floats heading to New York, City insiders complain that the self-styled LSEG is not giving proper attention to London.
Some say it would be best if the exchange was spun out of the LSEG to a different owner.
CMA probes Vodafone/Three merger
Friday 26 January 2024 10:08 , Daniel O'Boyle
The competition watchdog has launched an investigation into Vodafone's planned merger with Three.
Sarah Cardell, Chief Executive of the CMA, said: “This deal would bring together two of the major players in the UK telecommunications market, which is critical to millions of everyday customers, businesses and the wider economy. The CMA will assess how this tie-up between rival networks could impact competition before deciding next steps.
Wickes’ profits at top of forecasts amid strong trade demand
Friday 26 January 2024 09:51 , Daniel O'Boyle
Wickes has said it expects profits for the past year to have been at the top end of forecasts, after improved trade demand in the latest quarter.
Shares in the DIY and building supplies firm moved higher on Friday as a result.
Chief executive David Wood hailed a “robust performance” over the year despite an overall decline in sales.
FTSE 100 up 1% on rally for heavyweight stocks, FTSE 250 struggles
Friday 26 January 2024 09:43 , Graeme Evans
America’s bumper GDP reading continued to boost markets today as heavyweights including Diageo, Barclays and GSK powered the FTSE 100 index 1% higher.
BP and Shell also lifted 2% as yesterday's latest signs of the US economy’s strength contributed to Brent Crude’s highest level since November.
The FTSE 100 rose 76.55 points to 7606.28, but hotel chain IHG fell 58p to 7430p on Deutsche Bank’s “sell” rating and Tesla backer Scottish Mortgage reversed 7.8p to 770.6p following the car maker’s 12% slide in value.
WH Smith dropped 20p to 1212p despite a strong update while the FTSE 250 lagged the top flight with a rise of 16.20 points to 19,239.30.
Elsewhere, DIY retailer Wickes rose 6.7p to 151.6p on robust 2023 profits guidance.
Active Energy shares collapse after supplier pulls out
Friday 26 January 2024 09:15 , Simon Hunt
Shares in Active Energy plummeted by some 70% when markets opened this morning after the biomass business warned its key supplier had pulled out.
Active Energy said Player Design Inc (PDI), which it had been working with to develop production of its renewable 'Coalswitch' fuel at a facility in Maine, had said it would no longer commit a date to begin production.
The news has come as an embarrassment for Active Energy, which bemoaned that it had spent 2023 "actively marketing CoalSwitch fuel to a range of potential customers."
The firm added it had hired lawyers in the US to explore options.
CEO Michael Rowan said: "The actions of PDI are as surprising as they are disappointing after a long journey toward the production of CoalSwitch fuel.
"The Board is taking swift and decisive action in the interests of our shareholders to minimize the impact, and to actively investigate and pursue all available claims arising from Active Energy's dealings with PDI over the last 3 years."
Higher oil stocks boost FTSE 100, Wickes update lifts shares 5%
Friday 26 January 2024 08:43 , Graeme Evans
The FTSE 100 index is 0.75% or 56.20 points higher at 7585.93, led by Diageo’s 4% or 100.5p recovery to 2810.5p ahead of next week’s interim results.
BP and Shell rose 2%, up 8.25p to 463.9p and 46.5p to 2437.5p respectively, after the Brent Crude price lifted to its highest level since November.
Other heavyweights up by more than 1% included GSK, Barclays and HSBC.
Hotels group IHG led the fallers board, down 100p to 7388p after Deutsche Bank analysts switched to a “sell” recommendation with a target of 5800p.
Tesla-backer Scottish Mortgage Investment Trust also retreated 9.8p to 768.6p after the electric car maker’s shares closed 12% lower last night.
WH Smith rose 7p to 1239p after its update but the FTSE 250 index failed to keep pace with London’s top flight after dropping 14.73 points to 19,208.37.
in the FTSE All-Share, DIY retailer Wickes rose 5% or 6.5p to 151.4p after reporting that 2023 profits are likely to be towards the upper end of market forecasts. Superdry rose 0.4p to 17.3p following its interim results.
Market snapshot: Big early rise for FTSE 100
Friday 26 January 2024 08:39 , Daniel O'Boyle
The FTSE 100 could be in for its best day of the year after a big early rise.
Take a look at today's market snapshot.
Saga confirms reports it is considering selling stake in its cruise line
Friday 26 January 2024 07:51 , Michael Hunter
Saga, the specialist travel group and insurer for the over-50s, has confirmed it is considering offloading the operation of its cruise line to a partner.
The heavily indebted firm said that the move would be in line with its new "capital light business model", adding:
"The Board is exploring opportunities to optimise Saga's operational and strategic position in Cruise, where exceptional demand for its boutique ocean cruise offer means it is operating at close to capacity."
Sky News first reported the plan.
Superdry finance boss to go as brand struggles
Friday 26 January 2024 07:45 , Daniel O'Boyle
Already tatty Superdry shares are likely to take a further hit today as chief financial officer Shaun Willis said he will go.
Giles David comes in as interim CFO and will work with his predecessor in an “orderly transition” up to April.
Julian Dunkerton, Founder and CEO of Superdry, said: "Shaun is passionate about Superdry and has been a key figure in delivering a number of operational and strategic programmes. I am grateful for all of his contributions to the business, particularly his support on the ongoing turnaround plan, and I wish him all the very best with his future plans."
Superdry shares open today at 17p, which values the equity at just £16.7 million.
They were 123p just a year ago and are likely to come under further pressure today.
Wills said: “I have enjoyed my time at Superdry but now is the right time for me to move on. Superdry remains a business and brand of which I am extremely fond, and I wish Julian and the team every success in the future.”
The company has been looking to raise cash from investors amid talk it might take itself off the stock market altogether.
Superdry, which has a plush new store on Oxford Street says its mission remains to be the “#1 Premium Sustainable Style Destination” .
Station and airport shops sales head north at WHSmith as high street slips
Friday 26 January 2024 07:42 , Michael Hunter
Books and magazine retailer WHSmith has reported another rise in sales for its chain of stores in airports and stations, offsetting a drop on the high street.
Sales at its UK Travel division – the company's biggest – rose 15% in the 20 weeks to January 20. North America sales were up 7% and the Rest of the World rose by almost a fifth
High Street sales fell 4%. WHSmith said it was on track for cost cuts of £10 million in that part of the business.
The company, which started its first newsagent in 1792, said it was no course to open 110 shops this year.
Superdry says clearance sale may be needed to free up cash as questions remain on future
Friday 26 January 2024 07:40 , Daniel O'Boyle
Superdry says a big clearance sale could be needed to improve its cash position as revenue fell by 23.5% in the six months to 28 October.
Revenue was £219.8 million, as unseasonably warm weather hit sales, as previously warned. The business turned a profit of £3.3 million, but only because of the money it made from selling its IP rights in Asia.
Superdry continues to warn that there is “material uncertainty” about its future. It said: “we retain a number of mitigating actions to improve liquidity if required including, but not limited to, additional brand rights sales in non-core territories and the clearance of aged inventory at accelerated rates.”
Founder and CEO Julian Dunkerton said: “This has clearly been a difficult period for Superdry. A challenging consumer retail market, set against a backdrop of macroeconomic uncertainty and some remarkably unseasonal weather conditions have all combined to weaken the financial performance of the Group. These macro and external factors have been further exacerbated by the underperformance of our Wholesale segment.
“Whilst, to some extent, this was expected due to the decision to exit our US operations and the sale of the brand rights in non-core territories, the segment continues to prove challenging.”
Finance boss Shaun Wills will also be stepping down
Asia markets struggle but FTSE 100 seen higher, crude at $82 a barrel
Friday 26 January 2024 07:22 , Graeme Evans
The S&P 500 index rose 0.5% last night to set a record high for a fifth consecutive session, buoyed by fourth quarter GDP growth above expectations at an annual 3.3%.
The soft landing hopes were offset by Tesla’s fall of 12% after the previous evening’s earnings miss. Meanwhile, US futures for today are pointing lower after first quarter guidance by semiconductor firm Intel sent its shares 10% lower in late dealings last night.
European markets held firm yesterday after the European Central Bank policymakers kept rates unchanged but kept alive the prospect of a cut by the summer.
The FTSE 100 index closed two points higher last night and is forecast by CMC Markets to start today’s session up 30 points at 7559.
Asia markets are largely in the red, with the Nikkei 225 and the Hang Seng index down by 1.3% and 1.6% respectively. Brent Crude is set for a weekly gain after yesterday going above $82 a barrel for its highest level since November.
Consumer confidence improves to two-year high
Friday 26 January 2024 07:06 , Graeme Evans
Consumer confidence in the UK is at a two-year high as inflation pressures begin to ease, the monthly barometer published by GfK showed today.
The headline score rose three points to minus 19, the best level since January 2022 and a significant improvement on the reading of minus 45 a year ago.
The view on people’s personal finances for the coming year gained two points to stand at zero, ending 24 months of negative scores for this measure.
The major purchase index rose three points to minus 20, up from last year’s minus 40,, and the view of the general economic situation over the next 12 months rose four to minus 21. It was minus 54 last January.
GfK client strategy director Joe Staton said: “Despite the cost-of-living crisis still impacting many households across the UK, consumers appear to be encouraged by the positive news about falling inflation.
“On balance, while there is national and global turmoil, the Consumer Confidence Index has started 2024 on a positive note – let’s see if this optimism continues.”
This month marks 50 years of the survey, which was conducted among a sample of 2000 people.
Friday 26 January 2024 06:44 , Simon Hunt
What seems to have been a stellar Christmas for pubs and restaurants across the capital has been followed by a very quiet start to the year certainly not helped by the 31-day temperance pledge of Dry January.
If February 1 at least bring an end to that, there are plenty of other storms on the horizon. Yet more rail strikes next week will bring the now familiar spike in cancellations and downturn in booking.
A bit further down the line comes the one they are all really getting worried about… the 9.8% rise in the national minimum wage on 1 April.
The increase from £10.42 to £11.44 is the biggest ever hike in cash terms and the first time it has gone up by more than £1. While it is obviously to be welcomed that workers in an industry notorious for low levels of pay will have more money in their pockets, there is no denying the sense of dread among employers in the sector.
As Wetherspoon boss Tim Martin pointed out this week, the labour costs embedded in the price of a pint in a pub are hugely higher than those of a tinny on a supermarket aisle. The knock-on effect of the 10% hike in labour costs will inevitably be fewer punters in pubs, restaurants and bars.
Here's a summary of our other top stories from yesterday:
Foxtons warns London rents will remain at “historically elevated levels” for the forseable future as letting revenues pass £100 million sales for first time
Dr Martens US nightmare continues with sales down 31%
Wizz Air says post-pendemic travel boom may have run its course as Middle East conflict costs airline Euros30 million
IG sees profits and revenues plunge as small punters stay clear of nervy markets
