Proactive Investors -
- FTSE 100 little changed after bright start
- Dechra Pharmaceuticals (LON:DPH) slips after profit warning
- US futures indicate subdued start in the US
US markets seen flat ahead of resumption in debt ceiling talks
US stock indexes are expected to start flat to modestly lower on Monday as talks over the US debt ceiling enter a critical stage and interest rate worries remain.
President Joe Biden and House Speaker Kevin McCarthy are set to meet Monday to continue negotiations. Treasury Secretary Janet Yellen has said the US could default on its debt as early as June 1.
Meanwhile, analysts at Goldman Sachs (NYSE:GS) think the US Treasury Department is expected to run out of the cash necessary to fund the federal government’s obligations by June 8 or 9 unless the debt ceiling is lifted.
In pre-market trading, futures for the Dow Jones Industrial Average (DJIA) were 0.03% higher, while those for the S&P 500 slipped 0.01%, and contracts for the Nasdaq 100 futures lost 0.1%.
Wall Street ended lower on Friday, with the DJIA off 0.3%, while the S&P 500 lost 0.1%, and the Nasdaq Composite fell 0.2%. But over the week, despite the uncertainty in Washington, the DJIA added 0.4%, while the S&P 500 gained 1.7%, and the Nasdaq Composite climbed 3%.
Joshua Mahony, chief market analyst at Scope Markets commented: "With the US debt ceiling clock ticking ever louder, futures are eyeing a cautious start to the week on Wall Street with some modest downside pressures in play.
"On the basis that economic news is thin on the ground in the coming days whilst earnings season is drawing to a close too, any meaningful progress on the US political front will be very much in focus, with Janet Yellen having cautioned that the US could default on debt repayments as soon as the middle of next week.
"As for the economic calendar, Tuesday’s flash PMI readings appear to offer little cause for concern, although the release on Wednesday of the FOMC meeting minutes will inevitably be closely followed as the market looks for clues as to what the Fed is thinking may happen next."
The first-quarter corporate earnings season is also winding down, but there are a few notable reports in the coming days, with Zoom Video on Monday and Lowe’s and Dick’s Sporting Goods on Tuesday. Traders will also be keeping an eye on JPMorgan (NYSE:JPM) Chase’s investor day on Monday.
PacWest offloads $2.6bn property loan portfolio
Back in the US and Californian bank PacWest Bancorp (NASDAQ:PACW) has offloaded a $2.6bn portfolio of loans to real estate investment group Kennedy Wilson (LON:KWE), just weeks after it said it was looking at narrowing its focus to its core community banking business.
In a filing, the regional bank which has een its shares plunge around 75% in 2023 in the wake of US banking crisis, said the sale of 74 loans was “consistent with the previously announced strategy" to pursue strategic assets sales.
A further six loans worth $363mn could be added to the deal.
The news boosted shares in pre-market trading with shares up around 3.5%.
Sainsbury targets leading brands for online fashion push
Sainsbury’s (LON:SBRY) is planning on launching an online marketplace for high street fashion brands, applying the pressure on department stores such as Marks and Spencer (LON:MKS).
The Times claim the grocery giant is pitching to brands such as Jigsaw and White Stuff on selling through its website and 60 of its stores.
Sainsbury’s is said to be flexible in its terms of conditions with brands and is offering a lower commission rate than John Lewis, which charges 40%.
Shares in the grocer were 1% lower at 278.30p while the FTSE 100 has slipped narrowly into red, now down 2 points
Meta plans to appeal €1.2bn data transfer fine
The record fine handed out to Facebook-owner Meta Platforms Inc risks carving up the internet into silos, according to Sir Nick Clegg, Meta's president of global affairs.
Meta has said it would appeal the Irish decision which has led to it being fined a €1.2bn and told to stop sending European users' data to the US in a spying row.
Ireland’s Data Protection Commission, which oversees the General Data Protection Regulation, on Monday handed down the fine for Meta, saying that Facebook (NASDAQ:META) had violated its rules requiring platforms to ensure data transfers from Europe to the US have appropriate safeguards in place.
Describing the move as "flawed" and "unjustified," the company also promised to "immediately" seek a suspension of the banning orders, saying they would cause harm to "the millions of people who use Facebook every day".
Clegg, the former deputy Prime Minister, said the data-transfer curbs risk carving up the internet "into national and regional silos, restricting the global economy and leaving citizens in different countries unable to access many of the shared services we have come to rely on".