FTSE 100 Live 10 November: US inflation rate 31-year high, Federal Reserve pressure, Marks & Spencer results, ITV update, Tesla shares


arks & Spencer’s army of small shareholders were cheering today after the retailer’s better-than-expected interim results sent shares surging by as much as 16% today.

With sales back above pre-pandemic levels, chief executive Steve Rowe is now forecasting annual underlying profits in the region of £500 million. He said: “The hard yards of driving long term change are beginning to be borne out in our performance.”

Halfords also surged 11% after e-bike sales led to an upgrade to its profits guidance, while ITV shares jumped as chief executive Carolyn McCall said the broadcaster is on track for the highest advertising revenues in its 66-year history.

Inflation figures in the United States will provide a major test for markets later today amid expectations the consumer prices index will hit a 31-year high.

Live updates


Reopening boom sends US inflation to three decade high

Prices paid for consumer goods in the US were up an eye-popping 6.2% year-on-year in October, the biggest annual jump since 1990.

Data released by the Labor Department showed a 0.9% rise from September, the biggest one-month rise in four months.

The rocketing inflation – above all forecasts – send stock future down, while the yield on the 10-year Treasury bond rose and the dollar strengthened.

The jump was put down to businesses raising prices for energy, housing, food and transport as supply chain bottlenecks and labour shortages drive up costs amid rising demand from the pandemic recovery.

Soaring prices of second-hand cars and semi-conductors fuelled the rise. which will put pressure on the Fed to raise ultra-low interest rates sooner than expected and accelerate the tapering of its bond-buying programme.

In China, inflation at the factory level last month increased by the most in 26 years, while consumer prices in Brazil sped up by more than forecast.


The challengers banks who fell to earth

In theory, a new breed of “challenger” bank is going to shake-up the staid old industry. Is going to wow us all with technology, eating the lunch of Barclays, NatWest et al along the way.

Banks with whizzy names – Monzo, Tide – will show the tired old lenders how to do it in the digital age.

Some of the us think we have seen this movie before.

Twenty years ago the first lot of new banks – Egg, Intelligent Finance – were going to do the same. If you’ve never heard of either that is exactly the point.


Velocys gets lift off from airline fuel deals

British Airways owner IAG and US giant Southwest Airlines today inked deals to buy hundreds of million gallons of carbon-negative jet fuel from a London-listed tech start-up.

Shares in Velocys, a spin-out from Oxford University now based on the bank of the River Humber in Lincolnshire, soared by more than 40% on AIM as the deals were announced.

The agreements were described as a milestone for sustainable aviation.


‘Whoppers’ boost Sir Martin Sorrell’s S4 Capital

S4 said like-for-like revenue was up 56% in the third quarter to £178 million. Gross profits were up 42% to £144 million. Trading was above previous guidance of revenue growth of 40%.

The business, which specializes in digital advertising and services like data, is benefiting from winning what it calls “whoppers” – major clients that deliver over $20 million in revenue to the business. S4 now has six “whopper” clients, up from two this time last year. New client wins this year include Facebook and HP. Google, BMW Mini, and Mondelez are other “whoppers”. The likes of Amazon, Netflix and Burberry are customers too.


Housebuilding support, ASOS sets out growth plans

Housebuilders are enjoying another boom year of trading, although for investors the worry persists that the roof is about to fall in on the sector.

Those fears relating to cost pressures and rising mortgage rates have left shares in heavyweights Persimmon and Taylor Wimpey close to where they started 2021.

Analysts at Liberum said today they believe this under performance is unjustified, particularly as the sector continues to report strong order books going into 2022 and is also showing signs of being over the worst of the price pressures.

Based on this favourable outlook, Liberum reported significant potential upside for shares across the sector, with its top picks being Persimmon and MJ Gleeson.

Top flight-listed Persimmon benefited from the broker’s support today by improving 2% or 46p to 2696p, while Taylor Wimpey added 2.1p to 156.1p and Berkeley rose 49p to 4280p.

Their progress came during a positive session for the FTSE 100 index, which rallied by a bigger-than-expected 40.27 points to 7313.97. ITV surged by 11% after its third quarter update, while there was also support for BP after the price of Brent rose back above $85 a barrel following a decline in US crude stocks.

Marks & Spencer’s strong interim results and 14% rise for its shares meant the retailer stole the limelight in the FTSE 250 index as the second tier benchmark climbed 100.31 points to 23,467.20.

ASOS shares were 63p higher at 2640p, a gain of 2% as interim boss Mat Dunn set about rebuilding the City’s confidence in the former high-flying AIM-listed stock.

The group saw sales leap during the pandemic, but warned last month that supply chain problems and other headwinds will hit profits.

Dunn today met analysts and investors at a capital markets day, where he outlined plans for £7 billion worth of sales over the next 3-4 years and profit margins of at least 4%.

This represents a compound annual growth rate of 15-20%, supported by own-brand offerings and a plan to double the size of sales in the US and Europe.


Halfords lifts profits outlook as CEO says bike retailer’s ‘strategic transformations are landing’

Halfords saw shares surge as much as 13% this morning after the bike retailer upgraded full-year profits forecasts and said its supply chain struggles are “beginning to ease”.

The listed firm, which also sells car parts and does repairs, forecast underlying profits of £80 – £90 million, up from previous guidance of above £75 million.

It reported revenues of £695 million for the six months to October – up almost 9% on the same period last year – boosted by rising demand for e-bikes and e-scooters. E-vehicle sales were up more than 140% on 2020, while electric car servicing was up 120% year-on-year.

Boss Graham Stapleton told the Standard the profits upgrade reflects the “strategic transformations” the company is making…


Pay row looms at Dunelm

The chief executive of Dunelm is under pressure from a shareholder advisory group over his pay, which it dubs “excessive”.

PIRC, the Pensions & Investment Research Consultants, is telling clients to vote against the retailer’s remuneration report at the next AGM.

CEO Nick Wilkinson saw his pay this year quadruple to more than £4 million thanks to £3.4 million in bonuses.

PIRC says this pay is “considered excessive”.


Marks & Spencer shares jump 15%

Marks & Spencer now languishes in the FTSE 250 index, but its shares were the London market’s star attraction today after surging 15% following half-year results.

The retailer’s shares jumped 28.05p to 222.5p — much to the delight of the company’s long-suffering army of retail shareholders — after M&S upgraded its full-year expectations on the back of interim figures showing sales and profits above pre-pandemic levels.

The former blue-chip stock is now at its highest level since the start of 2020.

Richard Hunter, head of markets at Interactive Investor, said the results show a company going full throttle: “Marks & Spencer was one of many companies where the pandemic forced accelerated change and the results are beginning to bear fruit.”

There was also a jump of 31.6p to 310.2p for Halfords in the FTSE All-Share after it upgraded profit forecasts to £80-90 million due to “exceptionally strong” sales of e-bikes and e-scooters.

The FTSE 100 index rose 22.64 points to 7296.68, led by a rise of 8% for ITV after the broadcaster’s upbeat third quarter trading update. BP also rose 2% as the price of Brent rose back above $85 a barrel following a decline in US crude stocks.

M&S topped the FTSE 250 index, which stood 73.02 points higher at 23,440.16.


Housebuilding shares backed for better 2022

Shares in London-listed housebuilders are below where they started 2021, a performance that Liberum said today is hard to explain given the industry’s strong trading and upgrades to guidance.

The broker blames the perceived threats from interest rates, input pressures and shifting government policy, but believes these fears are now past their worst.

Based on this favourable outlook for 2022, Liberum’s note sees significant upside for shares across the sector. Its top picks are Persimmon and MJ Gleeson.


ITV predicts highest ad revenue in history

ITV is on track for the highest advertising revenues in its 66-year history, the national broadcaster said today.

The broadcaster and production studio said advertising revenue was on track to rise by 24% by year end, which would take it above pre-pandemic levels and to an all-time high.

Advertising sales are up 30% so far this year, ITV said, helping revenue at its media and entertainment business climb 28% to £1.6 billion. Revenue at ITV Studios, which produces shows for the broadcaster and other channels, saw revenue rise 32% to £1.2 billion.

CEO Carolyn McCall said: “By any standards ITV has had an outstanding nine months. Revenue from each business over the nine months is up both on last year and on 2019.

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