The FTSE 100 finds the way forward; US indices drop after industrial production falls

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In the United States, capacity use fell to a new low of 64.9% from 72.7% in April.

  • The FTSE 100 index increases by 54 points
  • US indices open lower
  • US industrial production drops 11.2% in April

3:00 p.m .: Industrial production and retail sales in the United States show the largest declines since the start of the records

US markets opened lower but not as deep as expected.

The Dow Jones industrial average fell 66 points (0.3%) to 23,557 and the S&P 500 11 points (0.4%) to 2,840.

In addition to some seriously bad data on retail sales to manage, American investors also had to react to some gloomy data on industrial production.

Industrial production fell 11.2% in April, the largest monthly decline since the records started.

Capacity use fell to a new low of 64.9% from 72.7% in April.

“Manufacturing production has dropped to levels last seen in 1997. Over-supply will no doubt hurt capital spending in the coming quarters, with larger job losses expected,” said James Knightley, chief economist at ING.

“We hope that May may see better manufacturing results with the restart of a number of production facilities, but it is likely to be slow,” predicted Knightley.

Turning to retail sales figures, April figures were down 16.4% month-over-month and 23% below February levels.

“The recovery in retail sales will depend on household confidence, which depends on healthcare and economic developments,” Roiana Reid predicted at Berenberg Capital Markets.

“Households will be reluctant to participate in certain activities until there is an effective vaccine or treatment against COVID-19 and significant job losses, loss of income and decline in net worth, will lead households to save more and spend less, “he said. planned.

On Friday, in London, the Footsie finally found its way forward and put decent pressure on the accelerator; the index was up 83 points (1.5%) to 5,825, helped by the pound losing almost two-thirds of a cent against the US dollar to US $ 1.2169.

2:15 p.m .: US indices open lower

Retail sales in the United States posted the largest monthly decline since the records started in April, down 16.4% from March levels.

Sales in April fell 21.6% year over year.

Stores selling clothing, electronics and furniture were hit hardest, as was the restaurant industry, according to figures released by the Commerce Department.

US indexes on the futures markets fell a little more, the Dow Jones average should open at 23,428 and the S&P 500 from around 2,827.

In London, the FTSE 100 is up 54 points (0.9%) to 5,795.

12:45 pm: The end of Rico at Royal Mail

After yesterday’s stormy response, US stocks are expected to restore some of yesterday’s earnings today.

Spread betting prices indicate that the Dow will open around 167 points at 23,459 while the S&P 500 starts around 2,834, 10 points below last night’s close.

In London, the late morning slide of the FTSE 100 was halted and the index is now up 40 points (0.7%) to 5,782.

The market reacted positively to the brutal departure of the CEO of (), Rico Back.

“The coronavirus crisis has accelerated many existing trends, and unfortunately for Royal Mail, one of them is the decline in the number of letters addressed. This long, slow decline is no longer slow by anyone’s measure, and volumes have probably been lost for good – businesses and individuals who have discovered digital alternatives to increasingly expensive stamped envelopes will not return. ” said Nicholas Hyett, equity analyst at Hargreaves Lansdown.

The shares rose 8.2% to 175.7p after the parcel delivery group announced that the newly appointed president, Keith Williams, will assume management responsibilities.

“The group’s saving grace is a fairly healthy balance sheet and significant levels of liquidity; However, we suspect that Royal Mail is burning cash at a reasonable rate of knots in today’s climate, which limits Keith Williams’ time to turn around. Experience at British Airways can prepare the newly installed executive president for the challenges of a highly unionized workforce, but the coronavirus disruption is something entirely different, “said Hyett.

11:50 a.m .: Rally shows signs of slowing

Footsie’s bright start is starting to falter as investors digest the latest publications on the European Union’s gross domestic product (GDP).

The FTSE 100 increased 42 points (0.7%) to 5,783.

Euro area real GDP fell 3.8% quarter on quarter (QoQ) in the first quarter of 2020, after increasing 0.1% in the last quarter of 2019.

The result was in line with consensus forecasts and the initial “flash” estimate.

The change in rates over one year is -3.2%, against + 1.0% in the previous quarter.

“The QoQ contraction of 3.8% in the first quarter is the strongest ever recorded; however, Germany contracted only 2.2% and given the fact that France and Italy contracted nearly double, we should expect to see friction occurring with regard to future contributions to all of the EU’s stimulus structures, ”suggested Artur Baluszynski, the research manager at Henderson Rowe, the wealth management company.

According to Germany, the second quarter for Germany will be “much worse”.

“We expect Q2 GDP to drop by 14% (qoq). Annual GDP is expected to contract by 9% in 2020 due to COVID-19, “said the bank.

10:30 am: Traders take a punt on William Hill

It looks like the Footsie has finally found a market before the last day of the week.

The major stocks index in London rose 84 points (1.5%) to 5,825.

“European indices are up this morning, the markets finally finding an offer after a period of heavy losses. With critical support levels coming into play during the week, the lack of a larger bearish breakdown highlights the fact that we still lack a strong enough market sentiment engine to trigger the next big break, ”Joshua Mahony told IG.

“Fears about the potential health implications of relaxing lock-in restrictions are based on a small number of cases, and therefore it may take a widespread increase in COVID-19 cases to highlight the long-term economic implications end of this crisis.

“The nightly data from China highlights the potential route for European countries, with Asian power continuing to see austere data despite progress against the virus. Unfortunately, the ability to bring down the dead from Covid-19 does not necessarily bring a marked economic rebound. One area of ​​optimism came from the Chinese industrial production figure, which returned to positive territory to signal a potential upturn in commercial activity; however, with declining global demand, Chinese growth will continue to pose questions following the global foreclosure, “suggested Mahony.

Bookmaker (), which is no longer even a component of the FTSE 250, was receiving some love this morning after its trading press release contained information about a breach of the covenants attached to its revolving credit facility.

The shares rose 9.3% to 116.65p after the company declared itself ready to take action once the sporting events on which the bettors can bet will start again.

“We now know that William Hill has significant cash, which should put him in a good position to eliminate the coronavirus – total liquidity is over £ 700 million and monthly cash costs have been reduced to around £ 15 million sterling. The group’s borrowing restrictions have also been relaxed, lifted this year and relaxed next year. That gives you a lot of leeway, but the restrictions will come back into play next year, so it’s important that business starts afloat again, “said Emilie Stevens, equity analyst at Hargreaves Lansdown.

“And things are better on this front. The German Bundesliga is scheduled to start behind closed doors in May and horse racing is now live in France and is scheduled to start in the UK in June. Football and horse racing are responsible for the bulk of the group’s online sports book, and although increased gaming revenues have closed some of the gaps, they have been missed. William Hill also predicts that retail stores will open in one way or another in the second half, but that of course depends on whether the UK keeps the “R” and the lock restrictions relaxed “, She added.

9:10 a.m .: Market ignores Trump’s saber cuts

The sounds of saber in the direction of China by President Trump have been dismissed by investors as mere elections, while stocks are strengthening.

The FTSE 100 was up 72 points (1.2%) to 5,813, led by the telecommunications giant (), which was up 6.9% to 109.15p on the reports it plans to sell part of its Openreach activity.

Cruise operator () finds himself in the unusual position of being in the top three risers of Footsie’s rankings after announcing yesterday “a combination of layoffs, leaves, reduced work weeks and pay cuts throughout the business. “

The shares rose 6.2% to 882.2p. The company said reservation trends for the first half of 2021 remain within historical ranges.

() is probably even less used to being at the top of Footsie’s ranking – and to avoid any confusion, he also didn’t make the podium today but he was up 2.7% to 693p after publishing its annual results which showed a 13.7% year-on-year increase in the value of the bet assets.

8:45 am: Optimistic start to end the week

The FTSE 100 was inspired by Wall Street and the main Asian markets to open up in positive territory on Friday.

The British blue chip index started to rise 71 points to 5,811.63 after losing 162 points on Thursday.

While traders have not been unduly disturbed by a lot of seemingly disastrous economic data from China, sentiment could later turn to the latest euro area GDP figure and retail sales figures to the states -United.

“Economic images are now the main driver of many assets, as the weaker data indicate how deep the economic hole will be,” said James Hughes of Scope Markets.

The big riser of the day was BT Group () amid reports that it planned to sell a stake in its Openreach infrastructure business to finance the deployment of £ 12 billion of fiber broadband. Stocks rose almost 10% at the start.

It was a rebound day for travel-related stocks, led by Carnival (), the cruise line group up 6.8%.

Not far behind () and easyJet (), up 3.6% each.

William Hill () gained 7% after an update on current trading which was not as bad as it was feared.

Proactive news headlines:

() told investors that key documents from its Nevada CS project approval process are now available for public comment. The company noted that this decision marks the culmination of more than 2 years of solid work involving the preparation of a detailed mine plan, extensive field and environmental field studies. “We are delighted to have reached this final stage of the licensing process and, although there have been a number of delays in the process, the end result is a solid environmental assessment,” said Patrick Cheetham, President Sunrise executive in a press release.

() saw his shares soar on Friday as he predicted that the distribution agreements he has reached and is about to sign will lead to a “substantial increase” in sales of his Chill brand of cannabidiol products (CBD) on the American market . In a commercial update, CBD said the Chill brand’s focus on the tobacco replacement market should be “particularly appealing” as health concerns were exacerbated by the coronavirus pandemic, adding that ‘she has also started negotiations for the distribution of Chill products for two. Foreign markets. Zoetic also said it hoped to conclude “other significant distribution contracts” in the first quarter of its current fiscal year.

Ltd () has told investors that it has obtained key approval for the BKM copper project in Indonesia, with the governor of Central Kalimantan recommending that the project continue in construction and development. It is part of a process to obtain a forest borrowing permit (Pinjam Pakai) from the Indonesian government. “Having recently obtained the logging permit, Asiamet is very pleased to have now received the Governor’s recommendation for the authorization process for Pinjam Pakai,” said Asiamet executive president Tony Manini, in a statement. .

DiscoverIE Group PLC () said its business model is “resilient and flexible” and added that it had been encouraged by “continued demand for its products” during the coronavirus pandemic (COVID-29). In a commercial update, the electronics designer and distributor said sales increased 8% year-over-year at constant exchange rates during the 12-month period ended March 31, 2020 , which means that profits will be slightly higher than the company’s revised expectations after a strong recovery in China. The order book, meanwhile, increased 7% to a record high of £ 159 million, although first quarter sales to date are currently down 10% organically from the year last. This is partly the result of brief plant closings in Sri Lanka, India and the United States.

() told investors that management continues to explore new project opportunities, while the coronavirus pandemic (COVID-19) has limited the company’s Spanish mining activities to the office. So far, more than 80 projects have been reviewed by the company since it agreed to divest its stake in the Barruecopardo tungsten mine project, she noted. “A small number of these opportunities remain promising, being on an appropriate scale by which the company’s liquidity would contribute to significant development, and which, according to the directors, could have significant potential to increase shareholder value,” said Ormonde said in a commercial update.

() raised £ 100 million via a equity offering to capitalize on what it has declared to be a “unique opportunity” to pursue its acquisition strategy. The video game services company said it had raised funds through the issuance of 6.9 million new shares priced at 1,450p each, a reduction of 5.8% from its closing price Thursday. Announcing his placement plans after Thursday’s close, Keywords said that if the coronavirus pandemic had increased the number of video games, resulting in continued demand for content and its own services, he expected to see “some stress mainly smaller service providers, which are generally unique location and service with fewer customers and less able to withstand the disruption. ” The firm also provided a brief update on its current transactions, noting that despite a larger pandemic disruption in the second half of March, revenues in March and April were 7% higher in the same two months of 2019, while the group had also gradually increased operational capacity. of his test service in May.

() announced that its annual general meeting (AGM) will be held at the company’s head office at 1 Occam Court, Surrey Research Park, Guildford, GU2 7HJ at 9:30 am Wednesday June 10, 2020. In light of the UK government’s current measures on coronaviruses (COVID-19), the AGM will take place in private session and shareholders will not be able to attend in person, the proxy form to vote is available on the company’s website at www.ergomedplc.com. In conjunction with the AGA, Ergomed also announced that the non-executive director, Dr. Jim Esinhart, will not stand for re-election and will leave the board of directors with immediate effect. He also said that non-executive director Rolf Soderstrom has assumed the additional role of a senior independent director.

6.30 a.m .: London ready for a brighter day

British stocks are expected to rebound today, drawing on the US markets, which finished higher yesterday after a smooth start as concerns over a second coronavirus infection (COVID-19) have subsided.

A wealth of economic data from China should not spoil the party with betting quotes on the spreads indicating that the Footsie will open its account at around 5,796, up 54 points, recovering a third of yesterday’s losses.

“Overnight, China announced several economic reports. The capital investment reading for April was -10.3%, while the consensus estimate was -10%, and keep in mind that the March update was -16%, “said David Madden of CMC.

“Industrial production was 3.9% and economists expected 1.5%, while the previous reading was -1.1%. Retail sales reached -7.5% and forecasts were -7%. The retail sales report for March was -15.8%. Traders reacted well to the improved data from China, which is why stocks in Asia are a little higher. European markets are on track to recover some of yesterday’s losses, “he added.

Iris Pang, chief economist covering Greater China at ING, said that “this dataset shows only modest and gradual improvements in economic activity, which could upset markets as China is seen as the »First exit« from the COVID-19 economy. “

“In addition, COVID-19 could spread in clusters around the world now that the first cycle of infection has not been definitively eradicated.

“In general, this implies that unemployment levels in the main countries remain very high, and demand for these economies is therefore expected to be lower than in previous crises,” Pang suggested.

Asian markets took the data in stride. Taking up the torch in the US markets – the Dow Jones Industrials Average rose 377 points to close at 23,625 and the S&P 500 put 33 points at 2,853 – the Nikkei 225 in Japan was 111 points firmer at 20,025 while in Hong Kong, the Hang Seng was up 96 points to 23,925.

On the home front, investors will have some mid-cap news to chew on in the form of an update from the gaming giant ().

With almost all professional sports on hold due to the coronavirus pandemic, investors are likely to focus on the results of the company’s cost-cutting measures, as well as on all updates to its US operations. United as America begins to slowly reopen its economy.

Economists will eagerly await the release of retail sales data for the United States, with April’s figure likely at least 10% lower than April 2019.

Important announcements expected on Friday:

Trading announcements: (), PLC ()

Economic data: Retail sales in the United States

Around the markets

  • Pound Sterling: US $ 1.2216, down 0.15 cents
  • Gilding at 10 years: yield of 0.207%, down 0.1 basis points
  • Gold: US $ 1,740.80 per ounce, down 10 cents
  • Oil: US $ 31.76 per barrel, up 63 cents
  • Bitcoin: $ 9,421, down $ 234

City titles:

  • Financial times

  • Telecommunications giant BT is in talks about selling a stake in its Openreach division to infrastructure investors, including Macquarie.
  • Nissan plans to shift production from two Renault models from Spain to its plant in Sunderland.
  • Pexip, which developed video conferencing software, rose more than 40% when it first started trading on the Oslo Stock Exchange.
  • Private equity group 3i said the coronavirus crisis has affected returns, but will continue to pay a dividend.
  • The Daily Telegraph

  • Rishi Sunak’s efforts to save the economy will hit a record £ 300 billion black hole in Britain’s public finances, the Office for Budget Responsibility warned.
  • Another three million Americans have applied for unemployment benefits in the past week, but economists have predicted that unemployment may soon peak.
  • The temperature

  • Over 47,000 British Airways passengers are still awaiting reimbursement for flights canceled due to the coronavirus.
  • According to the Office for National Statistics, almost half of businesses do not have sufficient cash reserves to last more than six months.
  • Just Group, the annuity and mortgage provider, saw £ 400 million erased from the value of its bond portfolio in the four months ending in April.
  • Hargreaves Lansdown lost more than £ 12 billion in asset value due to the turmoil in the financial markets.
  • TI Fluid Systems was not authorized to distribute the payment of 5.2p per share after Bain Capital, the US private equity firm, voted against the plan at the company’s annual meeting.
  • BT will start purchasing equipment from Adtran, a US group, to comply with a government order to use less technology from Huawei.
  • A review of Sensyne Health’s corporate governance found weaknesses but not big gaps in its processes, according to the biotech company.
  • Indivior increased its provision related to an investigation by the United States Department of Justice on its best-selling opioid addiction treatment.
  • The Guardian

  • Ei Group, the UK’s largest pub group, has agreed to help tenants pay their rents after much criticism.
  • WH Smith expects to resume trade in its airport and station stores this fall.
  • Lloyd’s of London plans to pay customers between $ 3 billion and $ 4.3 billion due to the coronavirus pandemic.
  • The government has said that London transport fares should go up as it has reached a £ 1.6 billion bailout deal with Transport for London.
  • Marks & Spencer has launched a huge sale of clothes at half price while the closure of the main street leaves retailers mountains of spring and summer unsold fashion.
  • Cruise company Carnival has announced a major job loss and pay cut program.
  • The head of the World Trade Organization, Roberto Azevêdo, has announced that he will step down more than a year before the end of his term.
  • Daily Mail

  • Novacyt’s subsidiary Primerdesign, which produces coronavirus test kits, expects “significant demand” that will continue for the rest of the year and potentially until 2021.
  • Prudential’s shares fell 7% yesterday after sales from the Asian-focused insurance giant suffered a blow amid global bottlenecks in recent months.
  • McLaren plans to mortgage its historic factory and racing car collection to help it survive the coronavirus crisis.
  • Veteran fund manager Giles Hargreave will step down as co-manager of the small cap lineup for Marlborough Fund Managers in the UK from January next year.



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