Proactive Investors -
- FTSE 100 firmly in the red at 7,343, down 1.3%
- US central bank signals more rate rises on the way
- Weak housing market drags construction PMI lower
UK construction sector contracts as housing sector plummets
More evidence of distress in the housing market.
Figures from S&P Global show residential work (index at 39.6) decreased at the steepest pace since May 2020 reflecting weaker demand due to rising borrowing costs.
Aside from the lockdown-related fall in house building, the rate of contraction was the fastest since April 2009.
The figures came within the S&P Global/CIPS UK Construction PMI which showed a renewed decline in business activity during June.
#Construction output in the #UK falls for the first time in 5 months in June, as house building activity declines at the steepest pace since May 2020. Read more: https://t.co/cEQptncxK6 pic.twitter.com/pTB25dbhTx— S&P Global PMI™ (@SPGlobalPMI) July 6, 2023
At 48.9 in June, the index was down from 51.6 in May, and below the neutral 50.0 threshold for the first time in five months.
Civil engineering was the best-performing segment (index at 53.1), with business activity rising at the second-fastest pace since June 2022 while commercial building also expanded at a solid pace in June (index at 53.0).
Housebuilders reflected the general malaise in the markets. Taylor Wimpey PLC (LON:TW) fell 2.7%, Persimmon PLC (LON:PSN) slipped 2.6% and Barratt Developments PLC (LON:BDEV) eased 2.3%.
The FTSE is down 1.3%.
Bitcoin looking bullish
Bitcoin saw an early-morning rally above US$31,000, kicking off a bullish session for the world's largest cryptocurrency.
As of 10.58, the BTC/USDT pair was swapping for US$31,094, a 2% day-on-day gain.
Investors have been mulling the possibility of a BlackRock (NYSE:BLK)'s spot bitcoin ETF application getting an approval in the US.
Although there is not definitive timeline for if and when it gets approved, investors have priced in the possibility, with bitcoin around 20% in the past month.
Shell boss says we need more oil
Shell PLC (LON:SHEL) boss Wael Sawan has bluntly warned that oil and gas companies should not be cutting production, claiming the move could be “dangerous”.
Sawan argued the world still “desperately needed” oil and gas in response to backlash from climate activists over the company’s backtracking on plans to cut production.
"What would be dangerous and irresponsible is cutting oil and gas production so that the cost of living, as we saw last year, starts to shoot up again,” he told the BBC on Thursday.
Shell scrapped plans to cut oil production by up to 2% each year until 2030 in last month’s capital markets day, amid a move to bump up shareholder distributions.
Shares in the oil giant dropped 1% to 2,303p.