- FTSE 100 closes at 6,078
- UK CPI down to 0.2% last month
- Wall Street trends higher but Apple leads tech wobble
5pm: FTSE gives up ground, US stocks cautiously optimistic awaiting Fed news
The FTSE 100 dipped slightly on Tuesday but held above the 6,000 mark, shedding 0.4%, or 27 points, to 6,078.5. The value of the pound rose swiftly against a weaker dollar, MarketWatch reported, which hampers the FTSE index.
The FTSE 250 was nearly flat, losing 20 points, roughly 0.1%, to 17,795.3.
Among the laggards was Rolls-Royce Holdings PLC (LSE:RR.L), which slowed 5.4% to £192.35.
In the US, stocks turned positive in anticipation of the latest decision from the Federal Reserve.
The Dow Jones Industrial Average rose 0.8% to 28,204.5 in midday trading and the S&P 500 climbed 0.4% to 3,416. The tech-laded Nasdaq, meanwhile, was stuck in the mud, dropping less than 0.1% to 11,189.4.
4pm: Pound presses on FTSE, tech stocks slide in US
The FTSE continues to slide while over the Atlantic, the Nasdaq Composite has moved into the red as the earlier tech twitch turns into a wider sell-off.
Apple sparked the slide, dragging Microsoft and Amazon off their initial rises, with Alphabet, Facebook, Nvidia, Netflix and Paypal all in the red, with Adobe giving up gains on the back of a strong earnings report, and with Tesla wavering.
Meanwhile, London’s Footsie has lost 40 point or 0.7% to 6,065.32.
A surging pound has acted as a weight around the blue chips’ neck, up 0.8% to US$1.2994, seemingly thanks to some Brexit speculation.
Market analyst Connor Campbell at Spreadex noted media reports about a “tentative, modest” concession from the UK regarding the fisheries dispute with the EU.
With negotiator David Frost travelling to Brussels for an earlier than expected tete-a-tete with Michel Barnier, Campbell said, “this has raised hopes that a Brexit deal isn’t off the table, despite public tensions following the announcement of the UK Internal Market Bill.
“Now, there have been plenty of negative headlines to go alongside that rumour. But, willing to cling onto any sign that a no deal exit can be avoided, the pound surged.”
10.35am/3.35pm: Proactive North America headlines:
China Xiangtai Food Company (NASDAQ:PLIN) achieves $7.2 million in sales of 18,000 tons of soybean meal
AIM ImmunoTech (NYSEAMERICAN:AIM) says enrollment for Ampligen study of cancer patients with coronavirus underway
Algernon Pharmaceuticals (CSE:AGN) (OTCQB:AGNPF) gets green light to continue its Phase 2b/3 coronavirus study from Data and Safety Monitoring Board
Loop Insights Inc (CVE:MTRX) (OCTMKTS:VRZPF) inks deal with University of Houston Athletics for its contactless platform for tracing and cashless commerce
ImagineAR Inc (CSE:IP) (OTCMKTS:IPNFF) teams up with NHL affiliate Allen Americans to provide virtual game experience to hockey fans
3.20pm: Wall Street falters without tech boost
Wall Street's main stock indices may have started higher, but with no help coming from the US tech titans, they have faltered slightly, while London’s FTSE 100 continues to head lower.
The Dow Jones has risen 85 points or 0.3% to 28,100, while the broader S&P 500 has also added 0.3% and the Nasdaq Composite is up just 0.1%.
Apple unveiled new products at its big event overnight, but, said market analyst Neil Wilson at Markets.com “investors were underwhelmed by products like the new iPad Air and new watches”.
“All investors really care about is the 5G iPhone launch, when it comes.”
Back in London, the Footsie is down 35 points or 0.6% at 6,070. The more UK-focused FTSE 250 index is just below flat, down five points at 17,809.83.
2.45pm: Wall Street starts higher
US benchmarks opened higher but without huge fanfare on Wednesday as the market awaits the Federal Reserve policy update.
Shortly after the New York bell, the Dow Jones Industrial Average added around 48 points at 28,044. The S&P 500 gained nearly nine at 3,410, while the tech heavy Nasdaq exchange continued its journey north, up 30 points at 11,220.
Traders are weighing up what the US central bank can deliver in coming months, excited by the potential for more stimulus measures and no interest rate hikes for the foreseeable.
Reportedly, the Fed is to signal that its interest rate policy will remain unchanged and near zero for another three years.
1.50pm: Blue chips slip on sterling
The Footsie is now giving up more of yesterday’s hard-fought gains as the pound drives higher.
London’s blue chip benchmark has lost 28 points or 0.5% to 6,077.5, while sterling has steadily climbed against the dollar, up 0.6% to 1.2972 and rising similarly versus the euro.
“Last week's sharp losses for the pound came to the benefit of the FTSE 100, yet we are now seeing a gradual GBPUSD strengthening to the detriment of market sentiment,” said market analyst Joshua Mahony at IG.
"With sentiment around Brexit talks soured after the emergence of the internal market bill, the ongoing debate in parliament will be crucial in determining whether Johnson gets his way. While the government remains adamant that they want a deal with the EU, the current manoeuvring does raise fears of a further breakdown in negotiations with less than four-months left.”
The dollar index is down 0.2% ahead of the Federal Open Market Committee announcement later.
BDSwiss analyst Marshall Gittler said he expects the results of the FOMC meeting to be negative for the dollar, if anything.
“I think the ‘dot plot’ rate forecasts are likely to show that Committee members expect policy to remain unchanged in 2023, which should in theory be negative for USD.”
US stocks are headed for smaller initial gains after data showed consumer spending appeared to slow in August.
Core retail sales fell by 0.1% last month after a downwardly revised 0.9% increase in July, the Commerce Department said. Economists had forecast core retail sales rising 0.5% in August, from 1.4% in July.
Overall retail sales increased by 0.6% in August, however, in part thanks to higher gas prices.
A $600 weekly unemployment subsidy expired in July, which economists estimated led to a $70bn cut to income in August. Government money was credited for the sharp turnaround in economic activity that started in May
US consumer spending suffered a record collapse in the second quarter. The pullback in core retail sales in August, if sustained, would set consumer spending for a slower growth path in the fourth quarter.
12:15pm: London slips back, New York prepares for Fed
The FTSE 100 is back in the red but is not alone among European indices in having a modest morning ahead of the US Federal Reserve decision later, which could bring more volatile trading.
However their more exuberant relatives across the Atlantic are more confident, as is routine these days, according to pre-market trading.
The Dow Jones, S&P 500 and Nasdaq Composite are set to rise 0.5%, 0.6% and 0.7% respectively.
After Fed head Jerome Powell revealed in a speech last month that the US central bank will be targeting average inflation of 2%, it is expected that he may add flesh to the monetary policy bones later.
As the inflation target effectively will allow for inflation overshoot after a period of falling short, as it has already, market analyst Craig Erlam at Oanda said this had just given investors the go-ahead to expect an even more prolonged period of zero interest rates and perhaps even more stimulus.
“While we're not anticipating more easing today, there is an expectation that the Fed will provide further colour on the changes announced last month,” Erlam said.
While not many market follower are naive enough to expect answers to all their policy questions today, he said the Fed “will need to display a dovish shift from the last meeting, reflecting the commitment to the new framework.
“And more detail may be demanded regarding what the change means in reality. I wonder whether the Fed is positioned to disappoint.”
Gold prices, which have been holding below US$2,000 for the last month, are creeping higher and are worth watching on the back of the Fed policy announcement, as well as the dollar, of course.
“The dollar has been under pressure since March and has recent shown signs of pushing for a correction,” Erlam said.
“With both of these trades showing signs of fatigue, a failure by the Fed to meet or surpass expectations could get quite a reaction.”
Back in the UK, the blue chip benchmark has taken a step down, slipping 12 points or 0.2% to 6,094, with a mix of banks and financials joining the air travel-focused trio at the bottom of pile.
10.35am: FTSE onto front foot
London investors have been buoyed by data indicating the global economy is bouncing back faster than expected from the coronavirus pandemic.
In its new set of forecasts for the world’s main economies, the Organisation for Economic Cooperation and Development (OECD) said the global economy is set to shrink 4.5% in 2020, which is not as bad as the 6% collapse it had forecast in June.
“Prospects for economic growth will depend on various factors, including the likelihood of new virus outbreaks, the impact on consumer and business confidence, and the extent to which government aid for jobs and businesses can boost demand,” OECD economists said.
If governments and the public keep a lid on the pandemic using targeted local measures, the global gross domestic product (GDP) will return to growth in 2021 to the tune of 5%, though this is down slightly from the last set of estimates.
But if there are major second and third waves of COVID-19 or countries have to go back into national lockdowns, it would be likely to reduce growth to around 2-3%.
The OECD's predictions for individual countries now have China as the only major country growing its economy in 2020, up 1.8%, reversing a June forecast for a 2.6% contraction.
The US is estimated to shrink 3.8%, reduced from the earlier 7.3% decline, while the UK is seen contracting 10.1% this year and then growing 7.6% in 2021, compared to a 7.9% decline fo the eurozone and 5.1% growth next year.
The FTSE is now in positive territory, gaining 13 points or 0.2% to 6,119.
9.40am: Builders subside
London stocks have remained quiet and withdrawn as morning trading has gone on, with housebuilders providing a drag but oil some support.
The Footsie’s quartet of builders were under pressure from read-across from smaller Redrow as it came in short of full-year expectations.
“Life may become a bit tricky for Redrow and its peers when the stamp duty holiday ends and eligibility for the Help to Buy scheme is narrowed next year,” said analyst at AJ Bell.
Elsewhere, Brent Crude Oil futures regained the US$40 per barrel level as hurricane outages helped provide some support to prices, in fact now up more than 2% at US$41.57.
The FTSE 100 is virtually flat, down less than two points at 6,104.17. The pound is yo-yoing just below US$1.29.
8.50am: Smaller loss than predicted
The FTSE 100 made a quiet start to proceedings on Wednesday ahead of the US Federal Reserve’s monthly meeting and against the backdrop of some benign domestic inflation data.
The index of UK blue-chips shares opened just 3 points lower at 6,102.51.
The latter first: the ‘eat out to help out scheme’ pulled down the cost price index reading down from 1% in July to 0.2% last month, its lowest level since 2015.
“Rising coronavirus cases, the reintroduction of restrictions, negative wage growth and the prospect of half a million redundancies as the furlough scheme winds down this autumn will all play a part in keeping consumer spending subdued,” said Fidelity’s Tom Stevenson.
“Other pressing issues, like a possible collapse in the Brexit talks and consequent pressure on sterling, will overshadow any inflation worries for now,” he added.
Looking ahead to the Fed’s rate decision, due after the London close, it is likely to be ‘steady as she goes’, according to market watchers.
Richard Hunter, head of markets at Interactive Investor, said US rate-setters stood ready to “initiate further action if the economic data demands it”.
“At the same time, any forward guidance will reveal the current thinking as to how to navigate the current challenges, such as any tweaks to its position on interest rates,” he added.
There were more wobbles for Rolls Royce (LON:RR.), off 3%, as the picture for international travel deteriorated. Remember, Rolls makes and maintains engines for many of the major airlines.
Among them is British Airways, owned by IAG (LON:IAG), which was down 2.6% early on.
But there was a bounce-back for B&Q owner Kingfisher (LON:KGF), up 3.2% after spending most of Tuesday in the sick bay.
Proactive news headlines:
Tiziana Life Sciences PLC (LON:TILS, NASDAQ:TLSA) expects its demerged StemPrintER business will be floated on the London Stock Exchange’s standard list late in the fourth quarter, followed potentially by a dual Nasdaq quote next year. The new, independent diagnostics business will be known as Accustem Sciences, and the spin-off will allow Tiziana to focus on its clinical portfolio. Tiziana is using dividend in specie to affect the split. This where a dividend is paid not in cash, but in assets of the company.
Sunrise Resources PLC (LON:SRES) said it has received an Air Quality Operating Permit for its CS Pozzolan-Perlite project in Nevada, the final permit required for a mine and mineral processing plant. No adverse comments or objections were received during the public comment period which ended on September 11, 2020. CS had already received a mining permit from the Federal Bureau of Land Management and a reclamation permit from the Nevada authorities.
Shield Therapeutics PLC (LON:STX), the iron deficiency treatment specialist swung strongly into profit in its first half following a US$11.4mln upfront payment from ASK Pharm, its partner in China. Revenues for the half-year to June 30, 2020, jumped to £8.9mln (2019: £430,000) with net sales in Europe of Feraccru, its flagship product, rising by 50%. Shield posted a profit for the six month period of £3.1mln against a loss of £4.2mln over the same period a year ago, while there was a cash inflow of £2mln that has boosted the total balance to £6.5mln.
KRM22 PLC (LON:KRM) has entered into a new £3mln convertible loan facility provided by its largest shareholder Kestrel Partners, and at the same time has confirmed stronger revenues in the first half of 2020. The interim results statement from the investment software firm included total revenue of £2.3mln, up from £1.8mln in the same period last year, with organic revenue growth at 19%. Adjusted underlying earnings (EBITDA) in the first half was marked as a £0.3mln loss, while the loss before tax narrowed significantly to £1.2mln from £4.4mln in 2019.
Inspiration Healthcare Group PLC (LON:IHC) has provided a final update on the status of ventilator deliveries to the UK National Health Service (NHS), saying in total it has delivered a total of approximately £7mln of ventilators directly in response to the coronavirus (COVID-19) pandemic. The global medical technology company said that in the past few weeks, further deliveries have been made with a value of £2mln taking the total value of all orders delivered by Inspiration Healthcare to approximately £5mln. In addition, the company said that S.L.E. Ltd, a wholly-owned subsidiary acquired in July 2020, recently completed orders of ventilators for COVID-19 for the NHS worth a total value of £2.1mln.
IQ-AI PLC (LON:IQAI) said its subsidiary Imaging Biometrics has announced that the Keck Medical Center of USC (University of Southern California) has purchased its IB Clinic software used for automatically generating IB's quantitative parameter maps. The installation provides Keck Medical Center with a processing solution that allows for standardised brain tumour imaging across multiple sites and platforms for its patients. “We are excited that Keck Medical Center has adopted our brain tumour imaging platform,” Michael Schmainda, Imaging Biometrics' chief executive said in a statement. “IB Clinic's quantitative output is ideal for major cancer centers such as Keck Medical Center as it automates and standardises care across sites, scanners, and patients. We are equally excited for the collaborative research relationships now established between our two organisations and translating future developments that may result,” he added.
Futura Medical PLC (LON:FUM) has said it is “actively engaged” in commercial discussions about its erectile dysfunction (ED) gel ahead of a key meeting with US regulators. The company said it has hired corporate advisers to organise the interaction with potential licensing and marketing partners for MED3000. It believes there is scope for the new treatment to become an over the counter (OTC) product, tapping into a large unmet need. The progress report was provided as part of Futura’s interim results statement in which it was revealed the company had, as at June 30, 2020, cash reserves of £2.62mln. This is enough to see Futura through to the second quarter of 2021 under current plans.
Baker Steel Resources Trust Limited (LON:BRST) saw its net asset value (NAV) rise by 4.5% to 77.2p in the half-year to June 30, 2020. Over the period, Baker Steel sold most of its holdings in Polymetal and Ivanhoe, its two largest listed holdings, and reinvested the money in a portfolio of mining shares and some unlisted businesses. That decision helped the first-half performance, said the trust. Significant events are also possible for its largest holding, Bilboes Gold over the second half, the specialist mining investor added.
Frontier IP Group PLC (LON:FIPP) announced that its portfolio company Nandi Proteins has raised £720,000 via a convertible loan, including a £360,000 investment from the UK Government's Future Fund. The commercialising intellectual property specialist said the investment from the Future Fund, established to support innovative businesses through the coronavirus (COVID-19) outbreak, has been matched by £320,000 from the group and £40,000 invested by Shackleton Finance, which specialises in secondary venture and development capital investments. Frontier IP holds a 20.1% stake in Nandi.
Eckoh PLC (LON:ECK) has said that given the continued resilience of its business combined with its high levels of repeat and recurring revenues, and with a further three months of trading behind it, its board has approved the payment of a special dividend of 0.61p per ordinary share. The company said its board will continue to keep its dividend policy under close review whilst the current macro-economic and coronavirus (COVID-19) uncertainty remains. Eckoh added that its financial position remains strong with net cash of £12.2mln as at the end of August 2020, and its management remain confident of further progress in the second half of the year.
accesso Technology Group PLC (LON:ACSO), the ticketing and virtual queuing group said trading recently has been better than expected as more venues have reopened following the coronavirus (COVID-19) lockdown. Revenue in the half-year to end June 2020 was US$24.6mln (US$50.7mln) as the company faced enforced venue closures from March onwards, though the outcome was ahead of its earlier expectations, the AIM-listed company said. Going forward, accesso noted that nearly 80% of passport and 60% of LoQueue customer venues had reopened, while it has won several new contracts in the ski sector ahead of the winter season.
TomCo Energy plc (LON:TOM) told investors it has received a Pre-FEED for the proposed Greenfield Energy LLC oil sands plant in Utah. The report, authored by Valkor subsidiary Crosstrails Engineering, set out to confirm the technical feasibility of a 10,000 barrel of oil per day operation and make first estimates of capital and operating costs. According to TomCo, the report provides a high level of confidence in the project.
NQ Minerals PLC (AQSE:NQMI) (OTCQB:NQML) (OTCQB:NQMIY), the base and precious metals producer from its Hellyer Gold Mine in Tasmania Australia, said it has raised £274,805 gross at 7p per share from a UK-based Institutional investor and a group of private investors for general working capital purposes and the company will issue 3,925,789 new ordinary shares under this equity issue.
ADES International Holding PLC (LON:ADES), a leading oil & gas drilling and production services provider in the Middle East and North Africa (MENA), has said it will announce its interim results for the six months ended June 30, 2020, on Tuesday, September 22, 2020. A conference call will be held the same day at 3.00pm (Egypt) 2pm (UK) 5pm (Dubai) 9am (New York). To participate in the call, investors can email: [email protected]
Belvoir Group PLC (LON:BLV), the UK's largest property franchise, has confirmed that Dorian Gonsalves, its chief executive officer and Louise George, its chief financial officer, will present at the Shares and AJ Bell investor webinar taking place at 6.00pm BST on Thursday, September 17, 2020. A copy of the presentation given via webinar will be available to view post-event on the Reports & Presentations page of the company's website - www.belvoirgroup.com - however, the group said, no material new information will be disclosed.
Symphony Environmental Technologies PLC (LON:SYE) has announced that its management will provide a live presentation relating to its results for the six months ended June 30, 2020, via the Investor Meet Company platform on Friday, September 18, 2020, at 11.00am. The online presentation is open to all existing and potential shareholders. Investors can sign up to Investor Meet Company for free and add to meet Symphony via: https://www.investormeetcompany.com/symphony-environmental-technologies-plc/register-investor
6.50am: Dull start predicted
The FTSE 100 index is expected to start cautiously on Wednesday following mixed performances overnight by US and Asian markets, with all eyes on the latest UK inflation data and tonight’s Federal Reserve policy decision.
Spread betting firm IG expects the blue-chip index to open around 42 points lower at 6,079, having jumped 79.29 points higher on Tuesday.
Overnight in New York, the Dow Jones Industrials Average closed just 2.27 points, or 0.01% higher at 27,995, but the broader S&P 500 index added 0.5%, and the tech-laden Nasdaq Composite gained 1.2% as the sector recovered after recent falls.
Asian markets were also mixed on Wednesday, with Japan’s Nikkei 225 index up 0.2% but Hong Kong’s Hang Seng index down 0.2% in spite of robust industrial output and retail sales data from China.
There was some concern after the World Trade Organization found on Tuesday that the United States had breached global trading rules by imposing multi-billion dollar tariffs in President Donald Trump’s trade war with China, a ruling that drew anger from Washington.
The US Federal Reserve will announce its latest policy decision following its two-date meeting at 7.15pm London time today.
Fed chair Jerome Powell and his fellow policymakers are on a state of high alert, according to investment analysts at AJ Bell, in case the recovery from the first-half’s recession proves weaker than expected. Powell recently said the Fed will adjust its inflation target and look for a 2% average over time – meaning that it will be happy to see an overshoot after periods when it has missed that target.
“That means the Fed is prepared to run negative real interest rates for some time – whereby its headline interest rate runs below inflation. For investors, that means their money loses purchasing power in real term and this may be one reason why some investors are piling into stock,” the AJ Bell analysts concluded.
The Fed meeting comes as US lawmakers remain at an impasse over a new stimulus package amid lingering concerns about the recovery of the world’s largest economy from the coronavirus pandemic.
The Bank of Japan and the Bank of England announce their respective policy decisions on Thursday.
Redrow hopes to build on sector optimism
On the corporate front, full-year results from Redrow PLC (LON:RDW) will come after some optimistic news from housebuilding rivals in recent weeks as the sector makes hay from the pent-up demand after the coronavirus lockdown.
Larger peer Berkeley maintained its full-year profit guidance and its shareholder returns commitments as underlying sales reservations for the past four months stood at “around 20% below the annualised run rate for last year”.
Barratt, meanwhile, reported a 46% decline in annual profits as house sales fell 29% but said it has enjoyed a boom in sales in recent weeks.
Investors are likely to be in a good mood already following a brief update on September 10 that said trading over the summer months was ahead of expectations and also declared a 50p dividend.
Around the Markets:
- Sterling: US$1.2900, up 0.2%
- Gold: US$1,956.30 an ounce, unchanged
- Brent crude: US$41.14 a barrel, up 0.6%
6.45am: Early Markets - Asia/Australia
Stocks in the Asia-Pacific region were mixed on Wednesday as investors await the US Fed’s policy decision tonight.
In Japan, the Nikkei 225 remained flat after provisional trade statistics showed the country’s exports in August falling 14.8% as compared to a year ago.
Chinese stocks saw losses by the afternoon with the Shanghai composite declining 0.20% while Hong Kong’s Hang Seng index slipped 0.06%.
In Australia, the S&P/ASX 200 advanced 1.01% with the local tech sector leading the way following more improvements for US tech stocks overnight.
Proactive Australia news:
Zelira Therapeutics Ltd’s (ASX:ZLD) (OTCMKTS:ZLDAF) proprietary cannabinoid medicine Zenivol™ can now be prescribed to patients in Australia through the Therapeutic Goods Administration’s (TGA) Special Access Scheme and via Authorised Prescribers.
Technology Metals Australia Ltd (ASX:TMT) has increased proven and probable ore reserves by 32% to 39 million tonnes at 0.9% vanadium pentoxide for the Gabanintha Vanadium Project (GVP) in Western Australia.
Pure Minerals Ltd (ASX:PM1) subsidiary Queensland Pacific Metals Pty Ltd (QPM) is making steady progress with the TECH Project aimed at establishing a value-adding metals processing facility in the Queensland city of Townsville.
Australian Vanadium Ltd (ASX:AVL) has signed a collaboration agreement for product development and vanadium pentoxide and electrolyte supply with Chinese residential vanadium redox flow battery (VRFB) producer Gui Zhou Collect Energy Century Science and Technology Co Ltd, (trading as CEC VRFB Co. Ltd).
Great Boulder Resources Ltd (ASX:GBR) has completed an oversubscribed non-renounceable entitlement offer of one share for every six shares held by eligible shareholders with applications received for shares valued at more than $1.236 million.
Cellmid Ltd (ASX:CDY) is optimistic that its revenue growth will continue in the months ahead despite the COVID-19 related disruptions on the conduct of business.
Macarthur Minerals Ltd (ASX:MIO) (CVE:MMS) (OTCQB:MMSDF) has commenced trading common shares today on the OTCQB Venture Market, a United States trading platform operated by the OTC Markets Group in New York.
Artemis Resources Ltd (ASX:ARV) (OTCMKTS:ARTTF) intends making a strategic investment in Thor Mining PLC (ASX:THR) (LON:THR) as part of that company’s capital raising of UK£1.065 million (~A$1.875 million).