- FTSE 100 index closes 50 points lower
- Wal-Mart warns of slowing consumer spending
- Sterling higher
5pm: FTSE closes lower
FTSE 100 closed in the red on Tuesday as the stronger pound took its toll on the index, hitting shares of its dollar earning giants.
The blue-chip benchmark closed down nearly 51 points, or 0.83%, at 6,076.
FTSE 250 was also down, finishing over 148 points at 17,623.
Sterling added 0.96% against the US dollar to stand at US$1.3231.
"Sentiment in Europe is weak, but the positive move in sterling, has caused the British equity benchmark to underperform. In terms of index points, some of the biggest fallers are GlaxoSmithKline, AstraZeneca, British American Tobacco and Unilever – they all earn a large chunk of their revenue overseas, so the upward move in the pound works against them," said analyst David Madden at CMC Markets.
US and Canada 4pm/11am EST
Wall Street shares were mixed but generally lower in early deals in New York. The Dow Jones Industrial Average plunged over 97 points at 27,748. The S&P 500 lost around two points at 3,379. The tech-heavy Nasdaq index added over 32 points at 11,163. In Toronto, Canada, the S&P/TSX index shed over 62 at 16,593.
Proactive North America headlines:
GGX Gold (CVE:GGX) (OTCQB:GGXXF) aiming to complete 5,000m drill program at Gold Drop this year
Gevo (NASDAQ:GEVO) inks partnership to provide Sustainable Aviation Fuel and renewable premium gasoline in India and neighboring countries
Klondike Gold Corp (CVE:KG) (OTCPINK:KDKGF) says drilling at the Stander Zone and its extensions in Yukon will help in bid to define resource
District Metals Corp (CVE:DMX) (OTCMKTS:MKVNF) to sell its 80% stake in Bakar property to Sherpa II Holdings
China Xiangtai Food (NASDAQ:PLIN) appoints two independent board directors
Heritage Cannabis Holdings Corp (CSE:CANN) (OTC:HERTF) to make edibles with Cannahive in two-year joint venture
3.10pm: Back on the back foot
The Dow Jones is trading lower but the S&P 500 and the NASDAQ Composite have stuck to the script and opened higher.
The S&P 500 was up 6 points (0.2%) at 3,388 having hit a new high earlier in the session and the NASDAQ Composite was 43 points (0.4%) firmer at 11,172.
The Dow was down 33 points (0.1%) at 27,811 after a negative reaction to results from Walmart, even though it posted second-quarter numbers that “crushed expectations,” according to CMCs Michael Hewson.
“The last few months have been good ones for Walmart, helping cement its position as the USs largest retailer, with its share price already at record highs, todays latest numbers are set to be a key test as to whether all of the good news is already priced in, or whether the second half of the year will see much lower sales as spending patterns settle down, and other shops re-open,” Hewson said.
“The increase in sales volumes did come with a downside coming as it did with a significant increase in costs, as the company spent US$1.5bn extra on safeguarding measures and extra staff.
“Its international sales were a bit of a letdown, declining 6.8% to US$27.2bn due to adverse currency effects, and the temporary shutdown of the Flipkart business in India for part of the quarter, as well as its operations in Central America and Africa,” he added.
S&P 500 edges towards all-time high but Wal-Mart offers a warning about slowing consumer spendinghttps://t.co/6E6rDBRgsN
— Forex Trade Ideas (@Newtradeideas) August 18, 2020
The US retail giant offered no clues over whether it would once again hoist the “for sale” sign over its UK Asda business.
In London, the FTSE was in positive territory in the middle section of the trading day after starting on the back foot and it looks like it is moving back on the retreat in the final couple of hours as the index is currently 25 points (0.4%) lower at 6,102.
2.00pm: Blue-chips are mixed
Today has been a roller-coaster ride for the Footsie, albeit a kiddy-friendly one that does not dip or rise too much.
Londons index of heavyweight shares is now back in negative territory – just; the FTSE 100 is down 2 points (0.0%) at 6,124.
“Stock markets appear to have remained in something of a holding pattern early this week, as we navigate through a relatively quiet period in the markets,” said Craig Erlam at OANDA Europe.
“It may not have been your typical summer so far but the seasonal lull has been apparent and with lawmakers in the US now on recess – dashing any hope of a near-term solution to the pandemic relief package – we may have to endure this a little longer,” he added.
Markets may be becalmed but that has not stopped gold bugs from chasing the price of the yellow metal higher. Do they know something we dont?
On futures markets, gold is trading US$23.60 higher (1.2%) at US$2,022 an ounce. Silver is going even better, up 85.8 cents (3.1% at US$28.525.
A couple of fallen giants have been hitting the comeback trail today after making well-received half-year updates.
Oilfield services provider John Wood Group PLC (LON:WG.) spouted 6% higher to 224.8p after first-half underlying earnings (adjusted EBITDA) only fell 21% from a year earlier to US$305mln.
John Wood Group claims to be “seeing an unstoppable momentum towards a lower-carbon energy environment” as it wins $200mln solar power contract from a US energy company https://t.co/8YymHvQJsz
— Oliver Haill WFH (@olihaillbiz) June 16, 2020
12.15pm: US stocks expected to open higher, prompting some head-scratching from pundits
US indices are expected to open higher, with even yesterdays laggard, the Dow Jones, tipped to up its game.
“On Wall Street, the mood remains fairly positive, with tech stocks extending gains,” observed Milan Cutkovic at AxiCorp.
“While the NASDAQ keeps hitting new record highs, the S&P 500 is struggling to gain significant momentum and is consolidating near its all-time high reached in February.
“Investors are patiently waiting for signals from Washington that the Corona aid package negotiations are making progress. Should that not happen in the near future, even the resilient US stock market might find itself under pressure,” he added.
Be that as it may, the Dow is seen opening 93 points higher at 27,938 while the S&P 500 is expected to open 9 points to the good at 3,391.
The tech-heavy NASDAQ is expected to open its account at around 11,331, up 200 points.
Neil Wilson at markets.com reckons, however, that market indicators are sounding a couple of alarm bells.
“The US stock market is only at all-time highs because of the Fed and huge fiscal stimulus; it does not reflect reality – so what?, you say, it never has [reflected reality] but forward earnings multiples of ~25x for the S&P 500 are less likely to survive for long than 20x.
“Put-call ratios are moving in a direction that often correlates to a reversal. Moreover, Vix futures point to greater anticipated market volatility into the autumn as the US presidential race inevitably tightens. Uncertainty over the result will create angst and volatility.” Wilson continued.
“The market is way too confident that Biden will win, although if Trump pulls it off the market could rip higher. A fresh stimulus package would be a major tailwind for stocks, but it's going to be hard to get it done with the election looming. The market will have to pay attention to the real economy again,” Wilson predicted.
In London, the FTSE 100 is busy consolidating the mornings gains at 6,152, up 24 points (0.4%).
11.00am: The Footsie ambles on to the sunny side of the street
Judging by the weather outside, these arent exactly the dog days of summer but the London stock market is nevertheless lying doggo.
The FTSE 100 has recovered from a wobbly start to advance 12 points (0.2%) to 6,140, despite sterling continuing to rip it up on the foreign exchange markets, at least against the US dollar where its value is two-thirds of a cent higher on the day – just in time for all of those summer trips to the US we wont be making …
“Sterlings recent good performance and resilience to grim economic data has likely relied on the Brexit story being put on the back-burner by investors. That could be about to change as negotiations re-start,” warned ING.
The former was down 1.7% at 1,810p after its full-year results contained news of a dividend cut while the latter was off 2.8% at 613.2p following a research note from Berenberg on the property listings website operator.
"BHP's dividend cut, despite prices for its main metals holding up, was unalloyed bad news for shareholders. Its profits were dragged lower by plunging oil and coal prices. With dividend cover already so low [1.2x last year] a cut was hard to avoid and will save BHP around £800m in 2020 alone,” observed Kit Atkinson at Link Group.
“The fortunes of the UK's mining behemoths have diverged sharply this year – Glencore has scrapped payouts, Rio Tinto has increased them, and BHP is somewhere in the middle with Anglo American. Income investors are struggling to find… havens this year.
“There is no change in our forecast for a best-case decline in UK dividends of 38% this year to £61bn, with the worst-case likely to see a 42% drop to £57bn," Atkinson said.
9.30am: UK grocery sector's sales rise 14.4% YOY in 12 weeks to August 9
Despite some handy rises for housebuilders and supermarkets, Londons index of leading shares is in negative territory.
The FTSE 100 was down 10 points (0.2%) at 6,118 despite the likes of Persimmon PLC (LON:PSN), Barratt Developments PLC (LON:BDEV) and Taylor Wimpey PLC (LON:TW.) in the housebuilding sector racking up gains of 1.9% or more in the wake of Persimmons half-year results announcement.
Investors were also tucking into supermarket shares after the latest grocery market share figures from market research group Kantar for the 12 weeks ending August 9.
Kantars figures show the grocery market grew by 14.4% over the period, which was down slightly from last months increase.
Morrisons was the fastest-growing big four retailer, with sales up 16.0% driven by a particularly strong performance from its supermarket stores, Kantar said. It's market share is now 10.2%. Despite Tesco being close behind in terms of growth, it lost market share of 0.4 percentage points bringing it to 26.6%. Sainsburys share now stands at 14.9%, losing 0.5 percentage points this month, while Asda lost 0.6 percentage points taking it to 14.3%.
Iceland was the second fastest-growing retailer at 29.2%, its share increasing to 2.4%. Meanwhile, Co-op increased its share to 7.1%, with growth of 22.4%. Lidl successfully managed to hold its share steady at 5.9%, while Aldi and Waitrose both lost 0.2 percentage points taking them to 7.9% and 4.7% respectively.
“While things are far from normal, the data shows a gradual softening of the more extreme lockdown trends in the grocery market. The relaxing of rules across much of the country means shoppers are less inclined to stock up their cupboards with regular large trips. That has seen average spend drop below £25 for the first time since March; however, at £24, it is still a world away from the pre-Covid average of £19 per trip,” said Charlotte Scott, the consumer insight director at Kantar.
“Although the current average of 14 shopping trips per month per household is lower than it was last month, it is higher than in April and May, when lockdown rules were much tighter. So, while some consumers have shopped more often in the past month, the story varies in different parts of the country, with localised lockdowns and slower openings resulting in people making fewer trips in the North, the Midlands and Wales,” she added.
Groceries delivery specialist Ocado Group PLC (LON:OCDO) was the to[ [erformer in its sector, up 0.9% at 106.95p, with the 800lb gorilla of the sector, Tesco PLC (LON:TSCO), not far behind with a gain of 0.8% at 230.7p.
— Proactive (@proactive_UK) August 18, 2020
8.50am: Early retreat for Footsie
The falling dollar hit the FTSE 100 in early trade on Tuesday with miners leading the retreat by the indexs American currency earners.
The index of UK top stocks opened 42 points lower at 6,085.19.
The greenback was knocked by retreating yields, tepid US economic data and sales of the currency by those formerly using it as safe-haven holding.
With commodity prices denominated in dollars it was unsurprising to see the BHP (LON:BP), down 2.3% and second on the losers list also as it posted its latest results.
But shares in Persimmon, up 4.1%, led the blue-chip list of risers after the market took heart from Julys rebound in activity.
“This year is increasingly looking to be a game of two halves for Persimmon, with the outlook rather brighter than the pandemic-hit first few months,” said Richard Hunter of Interactive Investor.
Dropping down to the FTSE 250, the big news came from Marks & Spencer PLC (LON:MKS), which announced plans to cut 7,000 jobs. The share price reaction, however, was muted.
Proactive news headlines:
[email protected] Capital PLC (LON:SYME) has revealed that Orchestra Group, which is owned by its CEO Alessandro Zamboni has acquired 1,630,000,000 ordinary shares of 0.002p each in the capital of the company at 0.6756p per share from Ceresio SIM S.p.A.. The share purchase increases Orchestra Groups holding in [email protected] to 23.96% of its share capital, up from 18.98% previously.
Gfinity PLC (LON:GFIN) has highlighted continued growth in its digital media business, saying the business arm is expected to generate £2mln in revenues for the financial year ending June 30, 2021. The esports events group said the digital media arm was one of its fastest-growing revenue streams, having delivered close to £200,000 through on-site advertising by the end of July after implementing a partnership with advertising group Venatus in mid-April. Gfinity also said the business line has been selected to deliver a “growing number of repeat advertising campaigns for high-profile publishers”, with a “strong pipeline” of direct campaigns already secured and running in August.
OKYO Pharma Ltd (LON:OKYO) said it plans to dual-list its shares on the US Nasdaq market as it raised another £1.4mln and published full-year results overnight. The London-listed company, which is developing novel molecules to treat inflammatory dry eye diseases and chronic pain, issued another round of convertible loan notes (CLNs) on the same terms as those issued last month. This takes its fundraising to £5.4mln since the end of March as it gears up to begin clinical trials for dry eye and exploring additional pain-related peptides in the coming year. OKYO said it now intends to begin the process to obtain a dual listing of its existing shares on Nasdaq, subject to the required regulatory approvals.
Angling Direct PLC (LON:ANG), the largest specialist fishing tackle and equipment retailer in the UK, said it saw strong pent-up sales demand when its stores reopened following closures for the coronavirus (COVID-19) pandemic. All of the groups UK stores are now open for business again and saw year-on-year like-for-like (LFL) sales growth of 75% between June 15, 2020, and the end of July. Sales across all channels in the same period were up 95% on the corresponding period of 2019, despite all of its bricks and mortar stores being closed between March 24 and June 14. Revenue in the first half of 2020 was up 21% to £32.1mln from £26.5mln in the first half of 2019, with online sales – up 43% to £17.9mln from £12.5mln – driving growth.
MaxCyte Inc (LON:MXCT) has said its CARMA Cell Therapies research arm is expanding the phase I trial of its promising cancer immunotherapy, MCY-M11. Doctors and scientists at Massachusetts General Hospital and Hackensack University Medical Center will join teams at the National Cancer Institute and Washington University at St Louis in helping evaluate the cell therapy. The treatment will be used to combat difficult relapsed or refractory ovarian cancer and malignant peritoneal mesothelioma, which affects the lining of the abdomen.
Faron Pharmaceuticals Oy (LON:FARN) is putting the building blocks in place for commercial production of Traumakine, its investigational intravenous (IV) interferon (IFN) beta-1a prospect for the treatment of acute respiratory distress syndrome (ARDS). The Finnish clinical-stage biopharmaceutical company has received a guarantee from Finnvera Oyj, the state-owned financing company, for a €2.5mln loan that will be provided by Danske Bank. Proceeds from the loan will be used to further expand the use of a new cell line that Faron plans to establish using the previously received Business Finland loan of €2.1mln announced in mid-June, which will be used in the future commercial-scale production of Traumakine. Faron has also selected AGC Biologics as the new manufacturing partner for commercial-scale production of Traumakine.
Aminex PLC (LON:AEX) has appointed Charles Santos as its new non-executive chairman and Tom Mackay as a non-executive director, both with immediate effect. At the same time, Robert Ambrose returns to his prior role as interim chief executive. "Following recent changes, we have taken the opportunity to rebalance the board of directors with the appointment of two independent directors," Ambrose said in a statement. “Charles and Tom are high-quality independent appointees, bringing a range of skills to the Board of Aminex. We warmly welcome Charles and welcome back Tom to the Board and look forward to working with them both."
Coinsilium Group Limited (LON:COIN) said its joint venture, IOV Asia has signed a memorandum of understanding (MoU) with Vietnamese firm RedFOX Labs to build a fast scaling internet business on and for the RSK blockchain in Southeast Asia. The blockchain, crypto and decentralised finance venture firm said the MoU is expected to lead to formal commercial and technical agreements whereby RedFOX will migrate its applications to the RSK blockchain and become a hub for RSK blockchain technology expertise in Vietnam under the IOV Asia umbrella. Coinsilium added that the deal will also enable IOV Asia to showcase the attributes and benefits of RSK technology to potential clients in the region.
Enteq Upstream PLC (LON:NTQ) has landed a new US$900,000 order for equipment to be deployed in Saudi Aramco drilling operations. The AIM-quoted oil and gas technology firm received the order via its new strategic partner in the Kingdom of Saudi Arabia, Sawafi Aljazeera Oilfield Products and Services. The order is for Enteqs recently released XXH product, which is an ultra-high durability version of Enteq's Measurement While Drilling technology. Enteq noted that the order will be used in the process of Sawafi obtaining full supplier accreditation with Saudi Aramco.
Gaming Realms PLC (LON:GMR) said it has continued to trade ahead of market expectations for the full-year, swinging into positive earnings territory in the first half of its current year. In a trading update, the developer of mobile gambling content said revenues for its first half were at £5mln, up from £3.1mln a year ago, while it also swung to adjusted underlying earnings (EBITDA) of £1.2mln compared to a £100,000 loss in 2019. Gaming Realms attributed the performance to the expansion of its partners internationally and the release of new Slingo games which have increased take-up by its customers.
Union Jack Oil PLC (LON:UJO) has updated investors on the West Newton project where drilling operations will begin imminently on the West Newton B-1 well. Following the completion of site preparation work, the programme gets underway with conductor drilling down to 80 metres at which point casing will be set before the main drill rig is erected for the remainder of the programme down to 2,000 metres. The drill programme will be undertaken 24 hours a day for six to ten weeks. Union Jack owns a 16.665% interest in the West Newton project.