Proactive Investors -
- FTSE 100 heads lower, down 46 points
- CBI boss steps aside while allegations investigated
- UK construction sector rebounds in February
US markets seen flat
Wall Street is expected to open flat at the start of a new week as investors look to comments from Federal Reserve Chair Jerome Powell for more clues on the Fed’s next step ahead of a key employment report on Friday.
Futures for the Dow Jones Industrial Average (DJIA) were unchanged in Monday pre-market trading, while those for the broader S&P 500 index were marginally higher and contracts for the Nasdaq-100 rose 0.1%.
The main US indices ended higher on Friday following a volatile week as the market digested economic data that pointed to a resilient economy. The DJIA snapped a four-week losing streak to close 1.2% up at 33,391, while the Nasdaq Composite rallied 2% to 11,689 and the S&P 500 jumped 1.6% to 4,046.
“Fed Chair Jerome Powell will give his semi-annual report on monetary policy to Congress on Tuesday and the Senate on Wednesday, markets expect that the Fed Chair will likely stick to the well-worn script regarding progress in the inflation battle but that Fed remain data dependent and as such it is too early to declare victory," TickMill Group market analyst Patrick Munnelly said. "Whilst nascent signs of disinflation are developing, the broader inflation picture remains challenging and well above the 2% mandated target."
Apart from Powell’s comments this week, Friday looms large as the latest non-farm payrolls report falls due, commented Richard Hunter, head of markets at interactive investor.
“Last month’s report rattled investors with a breathtaking addition of 517000 jobs, and a further reduction to the unemployment rate, suggesting that the labour market is starting to show signs of immunity from the hiking cycle.
However, expectations for February are more modest, with a consensus for 225000 jobs to have been added, while investors will also have an eye on any revisions to the previous bumper reading,” Hunter noted.
Back in London and the FTSE 100 is close to its worst levels for the day at 7,901.56, down 45.55 points, or 0.57%.
CBI head to step aside while allegations investigated
The director general of the Confederation of British Industry Tony Danker has stepped aside from the role while the business lobby group investigates allegations relating to his workplace conduct.
The body said he had requested to leave the role while a number of allegations were examined.
They came to light after a previous allegation that was made in January was investigated and "dealt with comprehensively, in line with CBI procedure", it said in a statement.
EXCL: CBI boss Tony Danker has stepped aside amid an investigation into complaints about his conduct - by @Annaisaac https://t.co/YI2JEGSqRh— Pippa Crerar (@PippaCrerar) March 6, 2023
It continued: "The CBI investigation determined that the issue did not require escalation to a disciplinary process". But it added: "On March 2, the CBI was made aware of new reports regarding Tony Danker's workplace conduct.
"We have now taken steps to initiate an independent investigation into these new matters. Tony Danker asked to step aside from his role as director-general of the CBI while the independent investigation into these matters takes place.
"The CBI takes all matters of workplace conduct extremely seriously but it is important to stress that until this investigation is complete, any new allegations remain unproven and it would be inappropriate to comment further at this stage."
Drax strike in Yorkshire is over
Strike action at the Drax power station in Yorkshire has ended after workers secured a “dramatically improved” pay offer, the Unite union has announced.
Unite says that fresh negotiations have been held after 180 workes held a day’s strike action in February after rejecting an 8% pay increase, below the headline rate of inflation.
Drax has now made a improved pay offer, including back pay, which Unite says is worth 16% to the lowest paid workers.
Workers have accepted this offer in a ballot. Strikes had been scheduled for later this month, and in April.
Unite general secretary Sharon Graham said: "This was an excellent increase for Unite members at Drax, who by showing unity and standing up to their employer secured a vastly improved pay increase."
Moderna to build vaccine centre in the UK
Covid jab maker Moderna has confirmed it will move to the UK and build a vaccine-manufacturing centre after the Government signed a 10-year deal with the company to buy its medicines for the NHS.
The US business said the new Moderna Innovation and Technology Centre at Harwell Campus in Oxfordshire will aim to provide the public with access to mRNA vaccines for a wide range of respiratory diseases.
We’re proud to announce @HarwellCampus in Oxfordshire as the location of our new Moderna Innovation and Technology Centre (MITC) in the UK. This exciting milestone follows finalization of Moderna’s ten-year strategic partnership with the UK government in December 2022. pic.twitter.com/Uf5u0hMrkT— Moderna (@moderna_tx) March 6, 2023
It said the investment "will create hundreds of jobs", with construction due to begin this year and the facility expected to open in 2025.
Back in the markets and the FTSE 100 has slipped further, now down 47 points, hovering around 7,900.
RBC upgrades B&M
Shares in B&M European Value Retail SA bucked the weaker market trend as RBC Capital Markets upgraded the stock to outperform with a 550p price target.
The broker raised its 2024 and 2025 pre-tax profit forecasts by 4% to 7% due to expectations of higher, price driven like-for-like sales growth, along with a gradual ramp up in UK space growth.
“Our survey work suggests B&M remains very price competitive, and we feel store standards have become more consistent, with further potential upside here,” RBC commented.
The broker sees potential for France and Heron Foods to generate close to 20% of group sales by 2025 and highlighted an undemanding valuation versus peers with potential for further cash returns.
Shares in B&M rose 1.4% to 495.50p while the FTSE 100 remained on the downside, off 29 points.
Eurozone retail sales rose less than expected
Retail sales in the eurozone rose less than expected in January, as household budgets continue to be squeezed by high inflation and rising interest rates.
Retail sales volumes rose 0.3% in January, partly offsetting a revised fall of 1.7% in December, according to data from the European Union's statistics agency Eurostat released Monday.
The reading fell below the 0.5% increase forecast by economists in a poll by The Wall Street Journal.
Euro area #RetailTrade +0.3% in January 2023 over December 2022, -2.3% compared with January 2022 https://t.co/8drpCfNGaf pic.twitter.com/WjLEaqVx5Z— EU_Eurostat (@EU_Eurostat) March 6, 2023
On an annual basis, the volume of retail sales was down 2.3% in January, Eurostat said.
ING Economics said the “small increase in retail sales in January suggests a weak start to the year for the consumer amid stubbornly high prices.”
“While surveys about the first quarter have been relatively upbeat so far, these sales data don’t give much evidence that a rebound has started. We expect GDP growth in the first quarter to be flat.”
Meanwhile, the FTSE 100 has stabilised at 7,920.31. down 26.80 points, or 0.34%. Its European counterparts are faring better with the Dax up 0.4% and the CAC 40 rising 0.5%.
Over half a million UK small businesses at risk due to rising costs
Around 630,000 UK small and microbusinesses are at risk of going bust in the face of rocketing costs and pressures on consumers, according to new research.
Data analysis of 2.3mln British microbusinesses, typically firms with fewer than 10 employees, highlighted increased pressure among small businesses due to skyrocketing costs, such as higher energy bills.
The Venture Forward report, produced by GoDaddy, indicated that the potential collapse of these companies would be a roughly £12bn hit to the economy.
It comes ahead of a key Spring Budget for the prime minister and Chancellor Jeremy Hunt.
However, the research found that fewer than one in five (19%) entrepreneurs said they believe that Rishi Sunk "is acting in the best interests of small and microbusinesses".