Proactive Investors -
- FTSE 100 hit a session peak at 7,673.13
- US stocks cautious ahead of key jobs data
- UK service sector still growing but at a slower pace
What a picture
Art held its value as an alternative investment asset in 2022, despite demand from previously heavy buyers in China falling sharply.
In total, the global art market in 2022 was estimated to be worth US$67.8bln, ahead of the US$64.1bln valuation in 2019, a report from UBS Group and Art Basel found.
Sales across the world increased by 3% year-on-year, driven by gains in the high end of the market.
The US market remains the leading country in terms of sales by value, making up a 45% share of the industry. Stateside, the market reached a record valuation of US$30.2bln, the report added.
Britain reclaimed its place as the second-largest art market in 2022 as it accounted for 18% of global sales by value, replacing China which saw its share drop from 20% to 17%. The UK art market, which was worth US$11.9bln in 2022, remained below its 2019 valuation of US$12.2bln.
1.30pm: A quick look at some of today’s fallers and risers
Risers
Fulham Shore - up 32% to 13.9p: Shares soared after the owner of the Franca Manca and Real Greek restaurant chain agreed to be bought in a £93mln deal. Japanese buyer Toridoll is offering 14.15p a share, a premium of more than a third of Tuesday’s closing price.
Northern Bear - up 28% to 47.7p: Shares rallied after it unveiled a dividend growth strategy and said it anticipates strong trading results for the year ended 31 March 2023. The company plans to declare an ordinary dividend of 4p per share and a special dividend of 1p per share for the period. Despite challenges in the construction industry, Northern Bear has exceeded the previous year's results, with an expected adjusted operating profit of over £2.75mln.
Scotgold - up 17% to 14.7p: The company secured US$500,000 of much-needed financial support and said it had embarked on a more cost-effective method of extracting ore from its mine near Loch Lomond. The company also said that its main debt provider had agreed to defer interest payments until the end of the year.
Fallers
Drumz - down 16% to 0.56p: The investing company saw its shares fall after it said it was raising money at a discount to acquire Acuity Risk Management (ARM), a supplier of governance, risk and compliance software and services. The AIM-listed outfit, which already owns 25% of ARM shares, announced a conditional fundraise of £1.45mln before expenses at a price of 4.5p per share, a discount of approximately 33.3% to the last closing price.
US open
Wall Street is likely to open lower after the first of three jobs reports out this week indicated the first sign of weakness in the US labour market, putting the Federal Reserve in a tricky position in its battle to return inflation to its targeted range, while concern about a potential recession has propelled the price of gold towards its all-time high.
Futures for the Dow Jones Industrial Average (DJIA) fell 0.1% in Wednesday's premarket trading, while those for the broader S&P 500 index shed 0.2%, and contracts for the Nasdaq-100 were also 0.2% lower.
The Labor Department reported on Tuesday that US job openings slipped to 9.9 million in February, the fewest since May 2021.
The DJIA and S&P 500 each finished down for the first time in five sessions, with both declining 0.6% to 33,402 and 4,101 respectively, while the Nasdaq Composite lost 0.5% to 12,126.
Spot gold rallied above $2,000 an ounce to $2,024.89, its highest since March 2022, as the dollar weakened in response to the data. It was last trading at $2,025.53.
“Figures on job openings and factory orders are pointing towards a potential recession for the world’s largest economy, but the upside might be a pause in interest rates which would typically be a positive for stocks,” commented AJ Bell head of financial analysis Danni Hewson.
“The concern is the Federal Reserve might have to sound the retreat before its war on inflation is truly done. This could leave us with the worst of all worlds – the dreaded stagflation where the economy is shrinking but prices are continuing to surge higher.”
Ahead of the all-important non-farm payrolls report on Friday, today’s release of the ADP (NASDAQ:ADP) National Employment Report is expected to reveal that an additional 200,000 private-sector jobs were created in March, down from 242,000 in February.
Also due out today, the ISM services index for March is likely to show a decline to 54.4 from 55.1 in February, noted ING strategist Francesco Pesole.
“Back in December, a one-off drop below 50 sparked recessionary panic and crippled the dollar.
Now, the combination with yesterday’s decline in job openings could mean that even prints in the 52-53 area could have a similar effect, as markets see more than one high-frequency piece of data moving in the direction of economic slowdown,” he added.
Royal Mail (LON:IDSI) talks end in stalemate
The never-ending saga surrounding Royal Mail rumbles on.
Royal Mail, which is owned by International Distributions Services, revealed that talks with union bosses have ended in stalemate, raising the prospect of further postal strikes.
The two sides have been negotiating for 11 months over pay, jobs and conditions for the 112,000-strong workforce, which led to 18 days of strikes in 2022 and 2023.
A spokesman for Royal Mail said: “After 11 months of talks, including mediation by Sir Brendan Barber and Acas, we are deeply concerned that our talks with CWU have concluded without an agreement.”
“We made substantial efforts to reach an agreement, including making a number of further improvements to our offer.”
It stressed it remained committed to striking a deal.
For its part, the CWU said there has been progress in several areas, and it was willing to continue talks but had been advised that the directors leading the negotiations for Royal Mail were no longer available.
Shares in IDS were down 1.3% to 217p, while the FTSE 100 was up 33 points to 7,667.
FTSE 100 outperforming European indices
A scan across Europe shows us that London’s blue-chip index is outperforming its peers on the continent.
The German DAX is down 0.35%, while the French CAC 40 shed 0.2%, but the FTSE 100 is up 0.39% to 7,763.
STOXX 600, which tracks the 600 largest stocks traded across 18 European countries, is down 0.16%.
It isn’t all gloomy, however, with the Spanish IBEX 35 up 0.56%, boosted by the S&P Global Spain Composite PMI climbing to 58.2 in March 2023, the strongest growth since November 2021.