The global interest rate outlook is today in focus amid inflation figures in Europe and ahead of a key speech by Federal Reserve chair Jerome Powell.
Powell is expected to reiterate that the fight against inflation is far from over, fuelling expectations that policymakers will lift rates by another 0.5% in December.
Today’s inflation reading for the eurozone showed a weaker-than-expected figure of 10%, down from the previous month’s record 10.6% as attention turns to the potential for European Central Bank to hike rates by at least another 0.5% next month.
And a range of London branches of HSBC are to close as the bank slashes its network by a quarter
FTSE 100 Live Wednesday
Wall Street focused on Fed inflation message
H&M cuts 1,500 jobs worldwide
FTSE 100 index in positive territory for 2022
That’s all folks. Tomorrow: UK PMI and EU, US unemployment
Wednesday 30 November 2022 17:30 , Simon Hunt
That concludes our live blog coverage for today, as the FTSE 100 finishes the month up 7% on October.
The Evening Standard City desk will be back at seven bells tomorrow, where UK PMI data, followed by EU unemployment and US joblessness numbers will shed light on the health of the global economy.
FTSE 100 closes up 1% to 7,587: Evening wrap
Wednesday 30 November 2022 16:46 , Simon Hunt
The FSTE 100 closed up 1% to 7,587 today, led by gains in mining stocks Anglo American, Antofagasta and Endeavour mining which were up 3.6%, 3.2% and 2.6% respectively. The FTSE 100 is up almost 7% since the start of the month.
It comes on the day over 100,000 members of the Communication and Workers Union, including Post Office employees, began a fresh 48-hour strike, raising concerns over the impact of a potential softening in online orders of Christmas presents over fears they won’t get delivered in time.
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown, said: “The impact of waves of strikes in the UK is being assessed, with the economy set to contract more sharply as industrial action takes its toll on businesses across the retail and hospitality sector in particular. Walk outs by postal staff are causing huge headaches for firms in the crucial festive period, with warnings goods may not arrive in time for Christmas due to strike days.
“Fears of a wage price spiral are growing, with the Bank of England clearly worried that if upper demands of unions are met, companies will be forced to hike the price of good and services to preserve profit margins and survive. Labour shortages in key industries have already exacerbated the problem.”
Danni Hewson, AJ Bell financial analyst, said: “Today, London markets have been pulled in many directions with one eye on Wall Street as investors wait for a key speech from Fed Chair Jerome Powell which should give further clues about the central bank’s next rate hike plans. Other economic data creates a slightly confusing spectacle, with GDP rebounding more strongly than had been expected but private employment data showing distinct signs of a cooling labour market.
“Costs are key and DoorDash shares have risen off the back of news the delivery giant is cutting more than a thousand jobs. The boss struck a now familiar tone, saying the company had simply expanded too far too fast, lulled by a pandemic boom, and has now been caught out by the realities of reopening.
“Inflation is still very much in focus and with the Eurozone seeing its first fall in inflation in 17 months there is cause for cautious optimism. Commodity prices have been falling and countries have fought hard to fill energy voids left by sanctions on Russia. But let’s not get carried away, core inflation is unchanged, and winter is yet to really exert its grip. “
Wall Street stocks flat ahead of Powell speech
Wednesday 30 November 2022 14:50 , Simon Hunt
Stocks were flat in the opening minutes of trading in New York as investors held their breath ahead of a key speech by Federal Reserve boss Jerome Powell that will likely signal how far the Fed will go with its next interest rate hike.
The S&P opened down 0.01%, while the Nasdaq moved up 0.1% and the Dow Jones fell 0.17%.
The pound is up around half a cent against the dollar, to $1.120.
FTSE 100 up 69 points: Lunchtime wrap
Wednesday 30 November 2022 13:31 , Simon Hunt
The FTSE 100 is up 69 points at lunchtime to 7,580. Here’s a look at the day’s biggest movers so far:
London branches to go as HSBC slashes its network by a quarter with 114 closures
Wednesday 30 November 2022 12:07 , Simon Hunt
HSBC has announced the closure of 114 of its UK branches, in a move that will cut their number by a just over a quarter.
The global FTSE 100 giant said the move came a drop-off in usage since the pandemic. It will be left with 327 branches nationwide.
Staff will be redeployed where possible, but around 100 jobs are at risk. The closures will be made from April.
The full list of London branches going is: Bethnal Green, Putney, Twickenham, Putney, North Finchley, Palmers Green and 122 Finchley Road,
Towns in the wider south east that are losing theirs include Harpenden, Bexhill-on-Sea, Hove, Waltham Cross, Marlow, Seaford, Tonbridge, Windsor, Henley-on-Thames, Reigate, Hertford and Waltham Cross.
Eurozone inflation slows but food prices continue to accelerate
Wednesday 30 November 2022 10:56 , Michael Hunter
Eurozone inflation slowed more than expected in November, data released this morning showed, boosting hope for a smaller interest rate rise by the ECB next month.
Consumer prices rose 10% on last year according to data from Eurostat, lower than October’s rise of 10.6% and lower than analyst expectations of 10.4%, according to estimates by the Reuters news agency.
The lion’s share of the inflation slowdown was attributed to energy prices, while inflation for processed food, alcohol and tobacco continued to accelerate – rising to 13.6% from last month’s 12.4%.
The ECB has already raised interest rates at record speed so far in 2022.
Rolls-Royce leads FTSE 100, SSE and National Grid higher
Wednesday 30 November 2022 10:24 , Graeme Evans
Rolls-Royce’s stock market recovery picked up speed today after the engine giant’s shares were backed to rise by another 20%.
The support of analysts at Barclays through their “overweight” recommendation and price target of 110p helped the FTSE 100 stalwart to lift 3% or 2.3p to 91.4p.
The shares were as low as 66p in October, but have rebounded thanks to improved stock market conditions, the recovery in air travel and relief that full-year forecasts haven’t been derailed by cost headwinds.
Rolls spent today’s session flying high as the best performing blue-chip stock, with the wider FTSE 100 index brushing aside another set of disappointing figures from China’s manufacturing sector to add another 47.29 points to 7559.29.
London’s top flight is now higher over the course of the year, having benefited today from 1% gains for the UK-focused trio of Next, JD Sports Fashion and Lloyds Banking Group.
SSE and National Grid were also in focus after Ofgem published its five-year investment package for electricity distribution network companies.
The headline return on equity is up from 4.7% in the draft document to 5.23% and the investment allowance went from £20.9 billion to £22.2 billion, but with the regulator insisting this will be at no extra cost to consumers.
The companies said they will examine the figures in detail before commenting, but the initial view of investors looked to be positive after SSE shares rose 24p to 1700p and National Grid added 5.5p to 1014p.
The FTSE 250 index cheered 79.48 points to 19,265.64, with Wizz Air among the biggest risers in a decent session for the airline sector. Shares rose 102p to 2252p, while easyjet added 7.1p to 390p in the wake of yesterday’s results.
AIM-listed gift packaging firm IG Design rose 5% or 6p to 120p after it said in today’s interim results that it now expects to deliver a small profit in the year to March.
The company, whose Tom Smith brand is the official supplier of Christmas crackers to the Royal Household, has benefited from turnaround efforts and customers bringing forward festive orders in order to avoid a repeat of last year's supply chain issues.
H&M cuts 1,500 jobs worldwide as profit margins squeezed
Wednesday 30 November 2022 09:34 , Simon Hunt
High street fashion retailer H&M is to cut as many as 1,500 jobs from its global workforce as part of a major restructuring programme to slash costs after sales in Europe slide and profitability is squeezed.
The move is the latest sign of the firm’s gradual withdrawal from the high street after the Swedish clothing giant closed 56 stores in the UK since 2020 as it scales back operations in Europe.
The Stockholm-based business said the jobs losses were set to save around two billion Swedish Krona (£160 million), with the savings being realised in the second half of 2023.
Gross profits in the third quarter sunk almost 90% to £42 million. Sales in Western Europe slid 9% compared to 2021, while sales in Eastern Europe fell 22%, offset by growth in North America and Asia to produce a slight uptick in overall global turnover, suggesting that Europe was set to bear the brunt of the job losses.
FTSE 100 rises despite weak China factory update
Wednesday 30 November 2022 08:42 , Graeme Evans
Weak manufacturing output figures in China today failed to derail the recent progress of London’s FTSE 100 index, which stood 25.05 points higher at 7537.05.
China’s latest PMI reading for factory activity fell to 48 in November, below market forecasts of 49 and the second straight month of contraction as the country continues to be impacted by Covid lockdowns.
The improvement for the FTSE 100 index was led by Rolls-Royce, which rose 2% or 2.1p to 91.3p after analysts at Barclays gave the engines giant an 'overweight' recommendation and price target of 110p.
UK-focused stocks also made progress after gains of more than 1% for Lloyds Banking Group, Taylor Wimpey and Next.
The FTSE 250 index improved 58.32 points to 19,244.48, with Wizz Air among the biggest risers in a decent session for stocks across the airline sector.
Its shares rose 4% r 78p to 2228p, while easyjet added 3.8p to 386.7p after HSBC raised its price recommendation to 440p following yesterday’s annual results.
West End stores “unviable” warns Mulberry boss
Wednesday 30 November 2022 08:33 , Simon English
Thierry Andretta says trade in the capital, which includes stores on Bond St, Regent St and in Burlington Arcade, has plummeted as rich tourists from the US and the Arab states shop in Paris or other EU capitals instead.
Soaring rents and the most expensive business rates in the world are making life near impossible for retailers, he told the Standard.
Andretta said: “The UK, and London particularly, has not seen the level of recovery that other European countries and cities are enjoying due in part to the lack of tax-free shopping. We urge the Government to reconsider its position on tax-free shopping to help the UK compete with its European neighbours.”
Wealthy Brits are themselves choosing to shop abroad rather than in London, so they can reclaim VAT, he says.
The knock-on effect on the capital is devastating, he warns.
“This is not just about encouraging tourists to shop, but also to experience everything that London and the UK has to offer – from its world class hotels, restaurants and theatres, to its museums and historical sites,” he added.
Home Reit’s shares rebound after it rebuffs allegations made by US activist investor
Wednesday 30 November 2022 08:11 , Michael Hunter
Home Reit, the property company specialising in providing flats for the homeless, has issued a full riposte to allegations made against it by the US activist investor Viceroy.
The FTSE 250 company said the allegations listed in the report on its business were “baseless and misleading”.
After the detailed reply came out, Home’s shares rose by almost 9% to 61p, a gain of 5p.
Viceroy is known for issuing warnings about the German fintech company Wirecard which collapsed amid a multi-billion pound scandal. It was founded by the British short seller Fraser Perring. The Delaware-baed investor published analysis last week that questioned the ability of Home’s tennants to pay the rent. It said some of the charities leasing flats had limited funds and were dependent on government grants.
The allegations led to Home delaying the publication of its results, which were due on Monday. After Viceroy’s report appeared a week ago, Home’s shares fell by 20%, the biggest single session fall since it listed in 2020.
Lynne Fennah, chair of Home, said: “This is a business whose sole focus is on providing safe and secure accommodation to some of the most vulnerable in society, whilst generating shareholder value. It is with deep frustration that the Board is having to spend time and resources responding to these baseless and misleading allegations.”
Future defies publishing gloom with record profitability
Wednesday 30 November 2022 07:56 , Simon Hunt
Magazine maker Future has defied gloom in the news publishing industry after announcing record profitability.
The firm saw pre-tax profits swell 58% to £170 million for the year to end September, while revenues grew 36%.
Future said its audience had grown 17% year-on-year, thanks in part to a £400 million spending spree on acquisitions including women’s lifestyle and wealth publications.
Loungers profits plummet as firm promises to “deliver market share growth whilst managing margin pressures”
Wednesday 30 November 2022 07:49 , Simon Hunt
Pre-tax profits at bar and restaurant group Loungers fell almost 80% to £2.8 million, its results showed today, as the firm promised to “deliver market share growth whilst managing margin pressures.”
The business reported sales growth of 17% in the six months to October, and said it was on track to proceed with its planned rollout of 30 new sites before the end of April 2023.
Nick Collins, Chief Executive Officer of Loungers said: “The short-term outlook is uncertain, but we take confidence from the resilience of current trading in both brands.
“We are excited about the coming months and are well-placed to take advantage of opportunities through our continued growth.”
Wall Street awaits Powell speech, FTSE 100 seen higher
Wednesday 30 November 2022 07:45 , Graeme Evans
The FTSE 100 added 0.5% yesterday thanks to support from mining and energy stocks, a performance that left the top flight at near its highest level since August.
CMC Markets expects the benchmark to open 30 points higher at 7,542, having benefited from a steady session by US markets last night.
Wall Street’s attention later today will be on Federal Reserve chair Jerome Powell’s speech to the Brookings Institute, where he is expected to reiterate that the fight against inflation is far from over.
Hargreaves Lansdown senior analyst Susannah Streeter said: “Although super-sized rate hikes appear to be in the rear-view mirror, an increase of 0.5% is still expected in December with the tightening cycle considered to be far from complete.
“The big worry among central bankers is that if economic pain isn’t inflicted now, inflation will be much harder to tame over the longer term.”