Proactive Investors -
- FTSE 100 rises 45 points to 8185
- Anglo American (JO:AGLJ) up on activist Elliott stake, new bid anticipation
- Pound slightly higher
The FTSE 100 has taken another leg up, rising 45 points or 0.56% to 8,185.24 as oil giants Shell (LON:SHEL) and BP (LON:BP) both turned positive.
Brent crude is down 0.45% today at US$87.81 but not as low as it was a couple of hours ago.
US secretary of state Antony Blinken will travel to Saudi Arabia to try to restart ceasefire negotiations in Gaza, with a delegation from Hamas also travelling to Cairo in parallel and pledging to provide a response to an Israeli proposal focused on an initial hostage release.
Analyst Ipek Ozkardeskaya at Swissquote Bank noted there was a "minor slide" on hope that Blinken’s efforts to convince Israel to a ceasefire, with the White House announcing on Sunday that Israel has agreed to hear out its concerns.
"The barrel of US crude could see support near the $82pb as besides the tense geopolitical landscape in the Middle East, the reflation trade – that relies on softer central bank policies and narrow supply due to OPEC’s efforts – remain favourable for an extension of the rally. Yet a hawkish Fed message this week is a downside risk to this positive outlook – especially if the US finally convinces Israel to cease fire in Gaza."
Race for less space
Interesting find in data from lender Halifax, which has found that prices for flats and other smaller homes have been increasing faster than bigger houses.
This represented a switcheroo in the 'race for space' demanded during the pandemic, when COVID lockdowns inspired buyers to searched for bigger homes and more outdoor space.
The average price of a flat increased by 2.7% in the year to February, versus a 1.7% rise for a semi-detatched home, 2.0% for a detached home and 2.6% for the average terraced property, Halifax found.
Ocado faces CEO pay revolt
Ocado Group PLC (LON:OCDO) is facing shareholder pushback at its annual general meeting over the bonus of its chief executive, Tim Steiner.
In the AGM season that has seen pay battles over AstraZeneca (NASDAQ:AZN) CEO's £18.7 millio pay and LSEG boss David Schwimmer’s £13 million package, Steiner is hoping to have a potential bonus of up to £14.8 million approved by shareholders.
Advisors Glass Lewis have urged investors against the decision, joining fellow proxy adviser ISS, which raised objections earlier this month.
Responsible lobbying group Share Action also said it was keen to hear from Ocado’s management and board and find out why it was happy to provide huge pay packets for its executives when “refusing to pay hundreds of its workers a real living wage of £12 an hour”.
Mixed housing market but signs of life
The number of UK home sales agreed grew 12% in the four weeks to 21 April compared to the same period last year, according to data from Zoopla today.
House price inflation is broadly static, according to the latest Zoopla House Prices Index (HPI), but homes in the south of England are currently seeing negative price inflation despite improving consumer sentiment.
"Static house prices are good for buyers, who are already struggling to cope with a 60% increase in mortgage payments in 2024," the property listing website said.
Average property prices were 0.2% lower year-on-year, a similar fall to the previous month.
There has been a higher number of homes going under offer in the first four months of 2024 compared to the same period last year.
"The housing sales pipeline is now rebuilding after a period of lower sales, when mortgage rates spiked higher in 2022 and 2023," said Zoopla's director of research, Richard Donnell.
His data shows that the housing market is on track for 1.1 million sales completions in 2024, up 10% on 2023.
Pound slightly higher
The pound is up 0.3% against the US dollar today at $1.2533, having been buffeted by Bank of England and Federal Reserve rate expectations for many weeks now, while versus the euro it's flattish with EUR/GBP at 0.8555.
There's not many domestic drivers for GBP this week, with the UK calendar including only some lending figures, housing figures and the final PMI reports on Wednesday and Friday, while BoE officials will not be able to comment on monetary policy as the pre-meeting quiet period starts.
Following the "recent rollercoaster in BoE policy comments and a substantial repricing higher in US rates", says ING forex analyst Francesco Pesole, have left the market "attached" to the prospect of an August rate cut, with reluctance to fully price in more than one additional cut this year.
"That might be leaving sterling in a stronger position than the euro this week – especially considering EUR downside risk for EZ inflation – but we still believe EUR/GBP will ultimately find a more stable upward path as investors price in larger BoE cuts. For now, the pair has erased almost all recent gains and can push back below 0.8550."