FTSE 100 Live: Brent crude back above $100 as supply fears grow
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Brent crude was above $100 a barrel today as supply concerns put upward pressure on the oil price after a brief spell below the threshold.
This week’s rally follows a bigger-than-expected drop in US inventories and the prospect of Opec’s alliance members cutting output in the event of a return of Iran supplies.
The latest spike in prices came despite this week’s gloomy economic figures, with Germany on the brink of recession.
US regulator quizzes Twitter boss on spam account numbers
Wednesday 24 August 2022 16:28 , Simon Hunt
Twitter has been quizzed by the US Securities and Exchange Commission over the number of spam accounts on its platform in the latest blow to the social media company as it wrestles with billionaire Elon Musk in a protracted court battle.
The SEC has written to the firm requesting details on its methodology for estimating the number of spam accounts. Twitter has reaffirmed its view that the number of these accounts represents less than 5% of overall users.
In a letter to the regulator in June, the company said: “Twitter believes that it already adequately discloses the methodology that it uses in calculating these figures.”
Aveva shares surge almost 30% after Schneider confirms buyout interest
Wednesday 24 August 2022 15:21 , Michael Hunter
Shares in Aveva rocketed by nearly 30% in afternoon trade after one of its shareholders, the French firm Schneider Electric, confirmed it was considering buying the whole FTSE 100 technology company.
The 29% rally took the stock to 2822p. Schneider, which already owns almost 60% of the Cambridge-based software firm, said a “full combination” of Aveva and the rest of its software operations would enable a “faster” growth strategy.
Aveva’s code is used in a range of machinery, from Starbucks coffee roasters to Danone’s yoghurt production and in moves to decarbonise the power industry. Schneider said the UK was one of its “ most important and strategic markets”.
FTSE 100 falls as oil and gas price spikes stoke caution
Wednesday 24 August 2022 15:08 , Michael Hunter
London’s FTSE 100 fell in afternoon trade, with investors across global markets keeping wary watch on energy markets, where Brent crude oil retook the $100 a barrel mark and European gas prices circled record highs.
The main UK stock index fell 29 points to 7459.60, a decline of 0.4%. Housebuilders were among the biggest fallers, as high energy prices embedded expectations of higher inflation and rising interest rates, which would make mortgage costs for home buyers more expensive. Persimmon fell 2.8% to 1538p and Taylor Wimpey was down 2.6% at 3994p. Retailers also fell, with Sainsbury weaker by 2% at 211p and B&M down 1.9% at 389p.
New York stocks make steady start as wait for rate signs goes on
Wednesday 24 August 2022 14:47 , Michael Hunter
There was another steady start for the S&P 500 in New York as investors stayed in a holding pattern ahead of Friday’s much anticipated remarks from the chairman of the Federal Reserve on interest rates and the fight against inflation.
Jay Powell’s appearance at the annual Jackson’s Hole gathering of central bankers has taken on extra significance as policy makers seek to tame inflation with rate hikes without doing too much to hobble economic growth. A recent run of robust data looks to have given the Fed’s advocates of more aggressive action a larger amount of room to manoeuvre, adding to the anticipation ahead of the event.
In the meantime, action on Wall Street has been constrained. The S&P 500 started the session flat at 4127.60.
Europe’s natural gas market tests record highs as supply worries mount
Wednesday 24 August 2022 14:25 , Michael Hunter
Europe’s main benchmark natural gas price headed back near this week’s record highs on Wednesday, as concerns about tightening supply deepened.
Dutch Title Transfer Facility gas prices -- set at a trading point in the Netherlands and the continent’s main market marker -- are circling record peaks and are around five times higher than this time last year. Contracts for September, priced per megawatt hour, hit €287.45 today, just shy of the previous session’s peak of €292.50, before easing back to €282.95.
UK wholesale gas prices have also set new highs for the year above the levels touched in the immediate aftermath of the invasion, just days before regulators set a new price cap on annual energy costs for consumers, which is due from Ofgem on Friday. Contracts for October delivery hit £5.93 per therm on Monday, before easing to £5.74.
Maintenance work is expected to reduce flows in several parts of the global gas supply system, including in the US and Norway, where Europe has looked for alternative supplies to reduce its stubborn dependence on imports from Russia.
Gazprom, Russia’s state-owned energy exporter, announced plans this week for unscheduled maintenance of the Nord Stream pipeline that is the main carrier of gas into Germany, prompting the run of record highs on key contracts. Flows through Europe’s single largest piece of gas infrastructure will stop for three days from August 31.
Norway is due to undertake work at its Troll gas field and the Kollsnes processing plant which receives output from Troll and two other fields.
City regulator FCA says staff must come in at least two days a week
Wednesday 24 August 2022 14:10 , Jonathan Prynn
The City’s regulator the Financial Conduct Authority is to require staff to come into its office in Stratford at least two days a week on average.
The new policy comes into force from 5 September according to minutes of the last executive committee meeting of the watchdog, which has 4,000 staff.
The minutes said chief excutive Nikhil Rathi had laid out the proposals to FCA committee members.
The minutes continued: “ExCo had considered the findings of the hybrid working survey and decided that a hybrid working policy requiring minimum attendance in the office of 40% across each month will be implemented from 5 September 2022 and will be in place at least until the end of 2023. Senior leadership team members will be encouraged to meet a 50% minimum.”
Staff will also be required to come in for “team events, performance reviews and discussions.”
Peloton announces deal with Amazon
Wednesday 24 August 2022 13:49 , Simon Hunt
Exercise bike maker Peloton has reached an agreement with Amazon to begin selling equipment on its platform in a bid to turn around its fortunes.
Earlier in August a US judge said the firm must face a lawsuit over allegedly misleading customers over the size of its fitness class library.
In 2019, Peloton removed thousands of on-demand classes over licensing issues related to music contained in the videos.
District Judge Lewis Linman said “there would be value associated with the products that resulted in an increased price when that value was not actually there.”
Peloton shares have dropped 89% in the past year after the company suffered a series of damaging setbacks. In February, the business was accused of concealing rust and corrosion on its bikes to avoid product recalls. Peloton said the rust was “superficial” and would not impact the bike’s performance. Sales slumped 24% in the first quarter of 2022.
Peloton shares rose 4% in pre-market trading on the back of the announcement.
Royal Bank of Canada earnings disappoint
Wednesday 24 August 2022 13:24 , Simon Hunt
Canada’s biggest lender RBC disappointed investors after it posted third-quarter results that failed to live up to expectations.
The company’s earnings per share dropped 15% down to 2.55 Canadian dollars (£1.67) as it increased provisions for credit losses amid growing economic uncertainty. The bank’s capital markets earnings dropped 57%.
RBC’s rival, National Bank of Canada, performed slightly better, with just a one-cent decline in its earnings per share, which came ahead of market expectations.
Canadian banks had been impressing investors in recent quarters, surpassing expectations, but global economic shocks are starting to take their toll.
Lookers sees 27% increase in used car price as revenues rise
Wednesday 24 August 2022 12:24 , Simon Hunt
The average price of a used car sold by dealer Lookers rose 27% over the past year as a shortage of semiconductors pushed up demand.
Lookers hailed a “very strong financial performance” for the half, with profits broadly in line with 2021. This did, however, include “the benefit from £12.7 million of Government support”.
Half-year pre-tax profit shifted into neutral at £49.9 million, slightly down on the £50.4 million during the same period the previous year.
However group revenues climbed in the first six months to £2.23 billion, up from £2.145 billion last year despite selling fewer new cars.
Profits surge 22% for Costain as HS2 tunnelling works come on stream
Wednesday 24 August 2022 11:48 , Simon Hunt
Contractor Costain has said it is on track to complete its work on the HS2 rail link by 2027 as it reported a profits increase of almost 22% helped by inflation protection clauses in its contracts.
The construction company is starting work on the line’s main tunnels this summer, with seven boring machines due to begin running on the project, which will cut journey times between London and Birmingham and Manchester. The tunnels will run from Euston station via Old Oak Common before passing near Wembley Stadium and under the M25 near West Ruislip.
Profit for the six months to June 30 reached £14 million, from revenue of more than £665 million, up almost 20%. Costain said “inflation recovery mechanisms” in its contracts helped offset rising commodity and energy costs.
Its shares rose by more than 7% to 40p in morning trade in London today.
Mastercard to bring Bitcoin payments to high street stores
Wednesday 24 August 2022 11:13 , Simon Hunt
The prospect of using Bitcoin to pay for “everyday purchases” in High Street shops came a step closer when Mastercard revealed a tie-up with the world’s biggest crypto exchange.
The card company’s CEO said it was working with Binance to let people use their crypto holdings in more than 90 million shops worldwide that accept Mastercard payments.
The roll-out will start in Argentina with plans to expand from there.
Mastercard boss Michael Miebach wrote in a LinkedIn post: “We can unlock the full potential of blockchain technology when we make it easier to access + easier to use.
“One way we do that is by bringing crypto to everyday purchases.”
Oil price rebound causes market jitters
Wednesday 24 August 2022 10:42 , Simon English
THE price of oil surged back over $100 a barrel mark today adding to concerns about the cost of living crisis ahead of likely forecourt fuel hikes.
The cost of a barrel of Brent crude rose $3.74, or nearly 4 per cent overnight to $100.22 after Saudi Arabia mooted the idea of cuts in production to support profits and reports of US stockpiles falling by more than 5 million barrels.
The rise gave nervy investors another reason to shun shares ahead of a highly anticipated speech from Federal Reserve chairman Jerome Powell on Friday at the annual Jackson Hole economic gathering.
A fall in the price of oil since it peaked at $125 in June has been one of the few bright spots in an otherwise increasingly gloomy economic outlook over recent weeks.
It fell as low as $91.50 earlier this month, allowing petrol prices to ease from record highs of £2 a litre to around 171p for unleaded today.
However, that trend is now likely to be reversed as higher crude oil price flow through the production chain.
Allied Minds set to delist, markets lower
Wednesday 24 August 2022 10:31 , Graeme Evans
Former star stock Allied Minds today signalled its intention to delist from the London market.
US-based Allied, which is an IP commercialisation company focused on early stage development within the technology sector, soared in value after its hotly-anticipated flotation in 2014 was priced at 190p a share or £400 million.
Major investments at the time included HawkEye 360, whose satellites create radio frequency data analytics. But from above 700p in 2015, the shares have fallen to 18.7p for last night’s valuation of near to £45 million.
The company, whose five current investments include the optical wireless communication BridgeComm, said the costs of maintaining a premium listing in London were prohibitively high given its size.
It will now consult shareholders on a delisting move, sending shares in the Boston-based company down by another 7.7p to 11p today.
Among larger stocks, easyJet shares were 3.7p lower at 360.8p after chairman Stephen Hester announced a number of changes to the airline’s line-up of non-executive directors.
Further weakness for Asia stock markets was reflected on London’s FTSE 100 fallers board, with Burberry, Prudential and Rio TInto among stocks more than 2% lower.
The FTSE 100 index dropped 31.45 points to 7456.66, despite defensive stocks including BAE Systems and British American Tobacco providing some shelter. The FTSE 250 index dropped 85.60 points to 19,221.29.
Asia-focused stocks struggle, FTSE 100 down 0.7%
Wednesday 24 August 2022 08:59 , Graeme Evans
European markets are under pressure, with the FTSE 100 index down 0.7% or 51.09 points at 7437.02 and the FTSE 250 index 82.95 points lower at 19,223.94.
Hargreaves Lansdown analyst Susannah Streeter said: ‘’Caution is the name of the game on equity markets with expectations that aggressive policies to tame roaring inflation will continue despite fresh signs that the US economy is slowing.”
Further weakness for Asia stock markets was reflected on London’s FTSE 100 fallers board, with Burberry, Prudential and Rio TInto among stocks more than 2% lower.
Defensive stocks including BAE Systems and British American Tobacco provided some shelter after rising 10p to 807p and 18.5p to 3442p respectively.
In the FTSE 250 index, Auction Technology Group was the biggest faller after losing 4% but biomass power station operator Drax rallied 10.5p to 742.5p.
Markets weaken on recession fears, Brent crude above $100
Wednesday 24 August 2022 07:51 , Graeme Evans
Wall Street markets closed lower last night after the latest PMI (purchasing managers’ index) figures from the US services sector showed activity at a two year low.
The update came a few hours after PMI updates from Europe revealed the impact of soaring energy prices as major economies including Germany move towards recession.
The worse-than-expected readings meant the FTSE 100 index finished 0.6% lower, but with energy and mining stocks offering some protection after a rise in metal and oil prices. CMC Markets expects the top flight to open 10 points lower at 7478 this morning.
Brent crude futures jumped back above $100 a barrel as a drop in US inventories added to supply concerns after Saudi Arabia said it may consider production cuts.
The US dollar fell after yesterday’s PMI figures, having earlier this week reached a 20-year high against the euro and the strongest against the pound since March 2020.
Attention now turns to tomorrow’s start of the Jackson Hole economic symposium in Wyoming, with Federal Reserve chairman Jerome Powell due to make comments on US monetary policy on Friday.
