- FTSE 100 flat
- UK economy stagnates
- Mixed start on Wall St
15.55: Footsie flat as holiday mood takes hold
After decent gains during most of the day, there was a definite air of closing the books for the holiday season as the end of the day approached.
FTSE100 was up 2 at 8,086 but seemingly on low volumes as those who hadn’t left already prepared for half-day closing tomorrow and the Christmas break.
Airtel African, up 3.5%, Pershing Square (LON:PSHP) (2%) and Croda (LON:CRDA) (1.7%) were the best of the risers, though AstraZeneca and Centrica (LON:CNA) got honourable mentions.
Fallers included Frasers (down 3%) after its bruising defeat against boohoo and bookie Entain (LON:ENT) (-2.8%).
US markets were mixed with the Dow and S&P 500 lower, but Nasdaq was flat.
15.42: Aviva (LON:AV) job cuts on way as Direct Line deal confirmed
More on the Aviva Direct Line takeover, where up to 2,300 jobs are at risk according to reports today.
Aviva has agreed to pay the equivalent of£275p per Direct Line share or £3.7 billion in total, confirmation of which was announced this morning.
Brokers said that Aviva is planning to cut 5% -7% of the combined workforce to save £125 million in costs or between 1,600 and 2,300 staff based on the current joint headcount.
Direct Line however has just overhauled its back-office IT systems and which system will be used is not yet clear.
Shares in Aviva were up 0.6% at 460.1p today.
3.12pm: Mixed start on Wall Street
Wall Street faced mixed fortunes as Monday’s shortened trading week got underway and investors eyed any sign of a last-ditch Santa rally around Christmas.
The S&P 500 and Nasdaq opened in positive territory, gaining 0.1% and 0.4% respectively, though the Dow Jones dipped 0.3% early on.
A muted start to the week saw just four of the Dow’s 30 constituents head into the green, with Walmart Inc (NYSE:NYSE:WMT, ETR:WMT)’s 2.6% drop placing it as the index’s biggest faller.
Heavyweight Apple Inc (NASDAQ:AAPL, ETR:APC) also edged lower, despite bullish commentary from Wedbush tipping the iPhone maker to become the first ever US$4 trillion company by early 2025.
Elsewhere, Advanced Micro Devices (NASDAQ:AMD) Inc (NASDAQ:AMD, ETR:AMD) and Broadcom (NASDAQ:AVGO) Inc (NASDAQ:AVGO, ETR:1YD) were among the S&P and Nasdaq’s risers as each gained over 4%.
14.23: Apple tipped to win US$4 trillion market cap race
Apple is being tipped to be the first company to hit the US$4 trillion stock market valuation mark on prospects for AI-enhanced iPhone sales.
According to investment bank Wedbush, Apple is “on pace to reach the US$4 trillion market cap threshold by early 2025.”
Shares are up 37% this year so far and 16% since November, valuing the tech giant at US$3.85 trillion on optimism about new product cycles and advancements in AI integration.
"Investor enthusiasm for artificial intelligence and an expectation that it will result in a supercycle of iPhone upgrades," added Tom Forte, an analyst at Maxim (NASDAQ:MXIM) Group.
Apple is currently worth more than the combined value of Germany (.GDAXI) and Switzerland's (.SSMI) main stock markets, Reuters points out.
Nvidia (NASDAQ:NVDA), at one time the favourite to hit 4T, has dropped back recently due to AI chip supply concerns having surged more than 800% over the past two years whereas Apple has ‘only’ doubled.
Earlier this month, Apple started integrating OpenAI's ChatGPT into its devices and this is expected to drive a rebound in sales.
"Although near-term iPhone demand is still muted ... it is a function of limited Apple Intelligence features and geographic availability, and as both broaden, it will help to drive an improvement in iPhone demand," Morgan Stanley (NYSE:NYSE:MS) said in a note.
Apple is the brokerage's "top pick" heading into 2025.
In the UK, FTSE 100 has eased back and is now up 8 at 8,093.
13.40: Construction boss latest to blast Budget changes
British construction firms have warned that the Budget measures announced by the government will "fatally undermine" family-run companies in the sector.
In a letter to the Prime Minister and seen by Sky News, Steve Mulholland, chief executive of the Construction Plant-hire Association (CPA), said the changes to Business Property Relief and Inheritance Tax had caused real unease among its members, many of which were family-run businesses.
"To be clear, these are well-established, in some cases, large family-run businesses with an exceptional reputation for delivery and customer service.
"These changes will result in companies deferring investment and hiring decisions, expansion plans will be called into question, with prolonged uncertainty and instability at a time when businesses can ill-afford it."
Mulholland described his association’s 1,900 members as "the backbone of the construction industry, contributing £14bn to the economy and supporting over 190,000 jobs".
"The vast majority of these companies are family-run businesses," he told Sir Keir.
"Our members have a key role to play in building the 1.5m new homes, that is a priority for your government and a key pillar of your Plan for Change".
"Your pledge to get Britain building again can only be delivered through renewed investment in new equipment, technologies, innovations, and people," Mulholland wrote.
"The October budget failed us on each of these levels.”
Mulholland’s comments came as latest economic data showed the UK economy saw no growth between July and September, something that Chancellor Rachel Reeves blamed on the previous government.
FTSE 100 up 18 at 8,103.
12.58: Morrisons has tech glitch on busiest shopping day of year
Morrisons is struggling to deliver some orders for Christmas after problems with its loyalty card and its click and collect service.
Price discounts on its More Card weren’t being registered said customers, while others had been told that some deliveries might arrive late.
Morrisons, which has been heavily discounting its Christmas ranges, told the BBC: "All our stores have now made the top 100 More Card prices the regular price - including the 10p veg deal, turkeys, spirits and champagne.
"In addition, we will give More Card customers an extra 10% off their entire shop as an apology."
Morrisons has been showing signs of recovery under new chief executive Rami Baitieh after taking on a pile of debt when it was acquired by US private equity fund CDR.
"There's never a good time for a tech glitch, but for it to happen on what is expected to be the busiest day of the year is the stuff of nightmares," retail analyst Natalie Berg. Told the BBC.
"This will further erode shopper trust and impact profitability.
Morrisons is the fifth-largest market supermarket in the UK, according to Kantar, with 8.6% of the grocery market in the 12 weeks leading up to 1 December 2024.
Grocery sales this Christmas are expected to hit a record of more than £13 billion according to market research group Kantar.
FTSE 100 up 26 at 8,110.
12.21pm: Nasdaq to gain in mixed start for Wall Street
Sentiment appeared mixed on Wall Street ahead of Monday’s trading and a shortened Christmas week.
Futures had the Nasdaq up 0.1% before the opening bell and continuing a recovery seen on Friday after stocks were battered by hawkish commentary from the Federal Reserve mid week.
The Dow Jones was seen 0.3% lower in the meantime, with futures pointing to a 0.1% drop for the S&P 500.
Fed expectations for just two interest rate cuts in 2025, against anticipations for up to four previously, had hammered sentiment on both sides of the Atlantic.
Hopes for a traditional Santa rally for equities in the days around Christmas faced being dashed as a result.
Swissquote Bank analyst Ipek Ozkardeskaya noted such a Christmas boost could not be written off just yet though.
“In the absence of major economic data, this Xmas-shortened week could see a further rebound in the US equities - no one wants to miss the Santa rally,” Ozkardeskaya said.
11.51am: Royal Mail (LON:IDSI) to trial axing Saturday second-class deliveries
Royal Mail will trial ditching Saturday second-class letter deliveries in a move that could pave the way for the service to be fully axed.
Almost one million households across the UK will no longer receive second-class post on Saturdays under the trial, which is expected to begin in February.
A phased process will eventually see 1,200 delivery offices across the country offering the service three times a week between Monday and Friday.
The postal service has repeatedly called for Universal Service Obligation rules, which require one-price letter deliveries on six days a week, to be watered down.
A successful trial would add to its case for the rules to be overhauled, with a consultation expected by regulator Ofcom in the new year... Read more
11.04am: Honda (NYSE:HMC), Nissan, Mitsubishi confirm tie-up talks
Honda, Nissan and Mitsubishi have confirmed they are in talks to potentially create the world’s third-largest carmaker.
The trio on Monday firmed up plans to “start consideration towards a business integration through the establishment of a joint holding company”.
Reports earlier in the day had pointed towards talks between Japan’s second and third-largest carmakers, Honda and Nissan.
Monday’s confirmation said the duo had signed a memorandum of understanding, with Mitsubishi set to decide on joining by late January.
If set up, the merged business would be the third-largest carmaker globally by sales behind Toyota Motor (NYSE:NYSE:TM) Corp and Volkswagen (ETR:VOWG_p) Group (XETRA:VOW).
It would boast a market capitalisation of around US$50 billion (£39.77 billion) and be formed as the global car industry moves towards electrification in its largest-ever shift.
9.57am: Direct Line pushed higher as Aviva takeover agreed
Direct Line Insurance Group PLC (LON:DLGD) (LSE:DLG) shares jumped after Aviva PLC (LSE:AV.) firmed up a £3.7 billion deal to buy the FTSE 250-listed insurer.
Having rejected an initial advance from Aviva in November, agreement came as a sweetened bid was “simply too compelling to pass up,” Hargreaves Lansdown (LON:HRGV) analyst Matt Britzman noted.
“Direct Line has been navigating choppy waters, with its market share steadily eroding and a history of missteps from previous management leaving the ship off course,” she said.
“While the new management team has been working to steady the vessel, even they couldn’t deny that Aviva’s offer was the golden ticket they’d struggle to replicate on their own.”
Shares gained 3.1% to reach 250.8p on Monday, though remained below the 275p valuation under Aviva’s offer.
9.33am: FTSE 100 edges higher after worst week in a year
The FTSE 100 moved into positive territory on Monday morning following its worst performance in over a year last week.
London’s blue chip index shed 2.6% over the course of the week, marking the sharpest drop over a five day period since October 2023.
Wednesday’s hawkish commentary from the Federal Reserve over rate cuts in the world’s largest economy over the coming year had caused a sharp drop in equities on both sides of the Atlantic.
The Bank of England’s decision to hold interest at 4.75% on Thursday then did little to move the dial.
Investors appeared in a somewhat brighter mood on Monday, with the FTSE 100 turning green come mid-morning, though still up by just three points at 8,088.
A lack of any significant movers saw Airtel Africa PLC (LAGOS:AIRTELAFRI) (LSE:AAF) head the risers with a 1.9% gain, ahead of BAE Systems (LON:BAES) PLC (LSE:BA.) and AstraZeneca PLC (LSE:LON:AZN).
Entain PLC (LSE:ENT) led fallers on a 2.9% drop meanwhile, as Schroders PLC (LSE:LON:SDR) and Frasers Group PLC (LSE:LON:FRAS) were also among those to move lower.
9.15am: Chancellor Rachel Reeves points to ‘huge’ challenge on economy
Chancellor Rachel Reeves has laid out the scope of the challenge in fixing the economy after revised figures showed gross domestic product (GDP) stalled in the third quarter.
“The challenge we face to fix our economy and properly fund our public finances after 15 years of neglect is huge,” she said on Monday.
“But this is only fuelling our fire to deliver for working people.”
The ONS reported earlier on that GDP growth stalled in the three months to September as an initial estimate for a 0.1% uptick was wound down.
Estimated GDP growth over the second quarter was also scaled back from 0.5% to 0.4%.
“The Budget and our plan for change will deliver sustainable long-term growth, putting more money in people’s pockets through increased investment and relentless reform,” Reeves added.
8.57am: Recession fears loom as firms expect further decline ahead
Figures showing the UK economy flatlines in the three months to September have raised eyebrows over the risk of a recession ahead.
According to the ONS, gross domestic product (GDP) failed to grow over the quarter, against an initial estimate for a 0.1% uptick.
Separate figures earlier this month showed the economy unexpectedly contracted in October, leaving fears of negative growth over the final quarter of the year.
The drop has raised concerns that the UK could be on course towards the two consecutive quarters of negative economic growth that would leave it in recession.
A survey by the Confederation of British Industry, also published on Monday, showed private sector firms were expecting activity to contract over the three months to March.
Expectations over the three months ahead were at their lowest in two years, with pessimism around output across all sub-sectors being recorded.
“The economy is headed for the worst of all worlds,” CBI deputy chief economist Alpesh Paleja said, “firms expect to reduce both output and hiring, and price growth expectations are getting firmer”.
“Businesses continue to cite the impact of measures announced in the Budget - particularly the rise in employer national insurance contributions - exacerbating an already tepid demand environment.”
Analysts had highlighted bright spots in Monday’s GDP data though, with Pantheon Macro (BCBA:BMAm) pointing to growing investment and firm consumer spending.
“Looking ahead, we expect GDP growth to rebound to 0.2% quarter-to-quarter in the fourth quarter,” Pantheon said.
“And, we expect growth next year to average a healthy 0.4% quarter-to-quarter in 2025.”
8.29am: Frasers hints new candidate for Boohoo (LON:BOOH) board after spat
Frasers Group PLC (LSE:FRAS) has hinted a new candidate will be put forward to join Boohoo Group PLC (AIM:BOO)’s board after the latter's shareholders rejected appointments last week.
Frasers noted the outcome of last Friday’s vote to appoint founder Mike Ashley and restructuring specialist to Boohoo’s board in a statement on Monday.
“Frasers respects the views of the independent shareholders,” it said.
The vote marked the culmination of a spat between the two companies after largest shareholder Frasers took aim at Boohoo’s plans for a strategic review and possible sales.
“Frasers takes note of Boohoo's invitation to propose a board candidate other than Mr Ashley or Mr Lennon,” it added on Monday.
“We will put forward a highly qualified candidate in due course and fully expect Boohoo's board to uphold their commitment without hesitation or delay.”
8.20am: Boohoo offloads London office to cut down debt
Boohoo Group PLC (AIM:BOO) has sold off its London office to further pay off debts, the clothing retailer said on Monday.
Global Holdings UK Ltd bought the Great Pulteney Street, Soho office for £49.5 million, Boohoo confirmed in a statement.
Boohoo added the move to sell the “non-core” and “non-strategic” asset would further strengthen its balance sheet, with the company having embarked on a turnaround earlier this year.
“Part of the proceeds will be used to pay down, in full, the remainder of the term loan, which was due for repayment in August 2025,” Boohoo said.
Boohoo would be left with a £125 million revolving credit facility, “sufficient for its needs going forward,” as a result, it added.
8.09am: FTSE 100 drops at open
London’s blue chips fell as trading got underway on Monday, with the FTSE 100 opening 25 points lower at 8,059.
Relx (LON:REL) PLC and Spirax (LON:SPX) Group PLC led the early fallers, followed by the likes of Persimmon PLC (LSE:LON:PSN) and IMI PLC (LSE:LON:IMI).
Standard Chartered PLC (LSE:LON:STAN) and HSBC Holdings PLC (LSE:LON:HSBA) gained in the meantime in the absence of any major movers.
8.01am: UK economy stalls as growth estimates wound down
Revised data showed the UK economy stalled between July and September and grew at a slower rate than previously thought in the three months prior.
Gross domestic product was unchanged over the quarter to September, against previous stated 0.1% growth, according to a new estimate from the Office for National Statistics.
Growth between April and June, previously estimated at 0.5%, was revised down to 0.4% in the meantime.
“The economy was weaker in the second and third quarters of this year than our initial estimates suggested,” ONS statistics director Liz McKeown said.
She added bars and restaurants, legal firms and advertising “in particular” performed less well.
“The household saving ratio fell a little in the latest period, though remains relatively high by historic standards,” McKeown continued.
“Meanwhile, real household disposable income per head showed no growth.”
7.47am: Aviva agrees £3.7 billion deal to buy Direct Line
Aviva PLC (LSE:AV.) has firmed up an agreement to buy rival Direct Line Insurance Group PLC (LSE:DLG) through a £3.7 billion deal.
Direct Line shareholders will receive 0.2867 new Aviva shares, 129.7p in cash and up to 5p in dividends per share under the agreement, the FTSE 100-listed insurer said Monday.
Each Direct Line share will be valued at 275p as a result, marking a 73.3% premium to their closing price on November 27 when Aviva first launched its takeover bid.
Direct Line had rejected Aviva’s first advance, before agreeing to a sweetened deal in early December, paving the way for the takeover by mid-2025 based on shareholder approval... Read more
7.30am: House prices grow as stamp duty deadline looms
November saw house prices move higher as a looming deadline on stamp duty exemptions pushed up demand, Zoopla has reported.
Year on year, prices increased by 1.9% in November to an average of £267,500 as the sales pipeline grew by 30% to 283,000 homes collectively worth £104 billion.
Many buyers were rushing to avoid higher stamp duty before thresholds were dropped from April, Zoopla noted.
This will see stamp duty paid on homes worth £125,000, against £250,000 previously, with first-time buyers facing a drop in the threshold from £425,000 to £300,000.
The sales pipeline had hit its highest level in four years as a result as buyers also returned to the market following years of inflated mortgage rates, Zoopla added.
Uncertainty around the direction of mortgage rates had seen buyers become more price sensitive though, with sales being agreed at 3.6% below asking prices.
7.12am: Stocks seen edging upwards
London’s blue chips looked on course for a gain ahead of the shortened Christmas week.
Futures had the FTSE 100 up 21 points 8,121 prior to Monday’s trading, following a 215-point drop over the course of last week.
Asian markets largely enjoyed gains overnight, with China’s Shanghai and Shenzhen indices among the few to drop.
Back in London, attention early on was on data from Zoopla showing a 1.9% increase in house prices year on year in November to an average of £267,500.
5.00am: Monday's schedule
House price figures from Zoopla and a final estimate for economic growth over the third quarter will be the focus on Monday.
Announcements due:
AGMs: Abrdn Diversified Income And Growth PLC, Virgin Wines UK (LON:VINO) PLC
Economic news: Zoopla House Prices (UK), Current Account (UK), GDP (UK), Consumer Confidence (US)