Proactive Investors -
- FTSE 100 up 15 points at 7,509
- Oil price jumps after attack on Israel
- Airlines dive as flights cancelled
Amazon plans Christmas hiring spree
Online retailer Amazon is preparing for the Christmas rush by recruiting 15,000 people to fill seasonal roles.
Amazon (NASDAQ:AMZN), which has faced strikes by workers seeking wage rises at its warehouses this year, has also announced a pay rise for its staff of at least £1 an hour.
The minimum starting pay for frontline employees will increase to between £11.80 and £12.50 an hour depending on location.
The rise, for all full-time, part-time, temporary and seasonal roles, will be effective from October 15, it said.
Oil prices jumps on Middle East conflict
Oil prices jumped as the crisis in the Middle East continued following the attack on Israel by Hamas on Saturday.
Brent crude rose 3.7% to $87.70/barrel and West Texas Intermediate rose 4.0% to $86.09 on fears the turmoil could spread to other oil producing countries.
Susannah Streeter, head of money and markets at Hargreaves Lansdown (LON:HRGV) said investors are assessing the potential for the conflict to disrupt supply in the Middle East, if other countries are drawn in.
“With the Israeli government warning of a long and difficult war, there are concerns that deep and incessant retaliative strikes on Gaza could potentially bring Iran into the conflict and have an impact on the flow of energy in the region,” she said.
Oil price rose 3% on news from Israel pic.twitter.com/uBlZzHme32— Laura Aboli (@LauraAboli1) October 9, 2023
Over at Citi, analysts noted that “timing is everything and the attacks almost certainly postpone any Saudi/Israeli rapprochement, along with any high probability expectation of Saudi Arabia reducing or eliminating its extra 1-m b/d cut if prices resume their recent fall.”
“Risks also grow for an Israeli attack on Iran, given its support and encouragement to Hamas, with timing an open question.”
“Meanwhile, any expansion of battles will have potential repercussions on oil markets,” Citi said.
Weak open expected on Wall Street
Across to the US now and it looks like a weak start on Wall Street given the tensions in the Middle East.
In pre-market trading, futures for the Dow Jones Industrial Average were 0.4% lower, while those for the S&P 500 fell 0.5%, and contracts for the Nasdaq 100 futures were down 0.7%.
FUTURES RIGHT NOWS&P 500 DOWN 0.8% ????
NASDAQ 100 DOWN 0.7% ????
DOW JONES DOWN 0.7% ????
VIX UP 7% ????
— ????BT ビットコイン (@DogeXBT) October 9, 2023
Oil prices jumped following the attack on concerns output from leading oil producers could be hit.
Ipek Ozkardeskaya at Swissquote Bank said: “It is difficult to predict the extent of the price action on geopolitical shocks. The fact that the US and Iran are pulled into the turmoil hints that tensions may further escalate.”
“From a price perspective, the $90pb level is expected to shelter decent offers in US crude, as escalation and prolongation of Mid-East tensions could be the final straw that could bring the world very close to the brink of recession, and temper appetite for oil. It's too early to call.”
Disney will be focus after The Wall Street Journal reported that activist investor Nelson Peltz plans to push for a seat on the board.
His firm, Trian Fund Management, owns a stake worth more than $2.5 billion in Disney, the report said, citing people familiar with the matter.
Elsewhere, speeches from Dallas Fed President Lorie Logan and Board of Governors member Philip Jefferson will be watched for any clues as to the future path of interest rates.
The speeches come as the Fed prepares for the latest data on inflation with consumer price and wholesale price data this week.
Minutes from September’s FOMC meeting will also be published on Wednesday.
Meanwhile, the reporting season kicks off later in the week with banking results from JPMorgan (NYSE:JPM), Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) due on Friday.
Lloyds' consumer business on track
Lloyds Banking Group PLC (LON:LLOY)’s consumer business is making good progress, according to analysts at KBW Europe.
The research team, were commenting following what it called an "excellent" update from Lloyds’ management.
In particular, KBW said management highlighted that the business is on track to contribute c.30% of its total additional revenue target (£1.5 billion by 2026) and c.40% of its gross cost savings target (£1.2 billion by 2024).
This is achieved by a combination of new products as well as efficiency initiatives, it noted.
In terms of near-term performance, despite challenging margin trends, it remains comfortable with existing >310bps net interest margin guidance for 2023.
But KBW retained an underperform on Lloyds.
“We continue to like Lloyds as a simple, well-run UK retail and commercial banking operation, and the seminar yesterday very much confirms this proposition.”
“However, as we look into 2024, the dynamics for UK banking continue to feel demanding, with latest data showing no let-up in recent trends particularly in terms of margin pressure.”
It added the shares are not particularly cheap at 5.7x consensus 2024 /E with a limited chance of seeing positive news with third quarter results later this month.
Lloyds shares were down 0.8% at 42.30p.