Proactive Investors -
- FTSE 100 down 51 points
- L&G sells housebuilding business
- UK core CPI inflation ticks higher
US stocks open flat
US stocks got off to a muted start today as traders hold off their bids until the Federal Reserve’s interest rate call later today.
The Nasdaq 100 opened flat at 19,427 while the Dow Jones Industrial Average dipped 0.2% to 41,508.
The broader S&P 500 index also opened flat at 5,635.
Among the top risers on the Nasdaq are Apple Inc (NASDAQ:AAPL), which is up a percentage point, and Moderna (NASDAQ:MRNA), which has added 1.5%.
In London, the FTSE 100 is down 51 points to 8,258.
Next preview: Sales guidance upgrade speculated
Next plc (LON:NXT) could be on course to upgrade sales guidance once again when the retailer reports interim results tomorrow.
Having already reported a 4.4% uptick in sales over the first half in August, unchanged guidance for the rest of the year at the time has prompted speculation of a hike soon.
Hargreaves Lansdown’s Aarin Chiekrie reckons the mounting speculation for another upgrade comes after Next got “into the habit of delivering positive news lately”.
UK renters stuck in ‘rental hell’
Renters across Great Britain continue to face rising costs, with private rents increasing by 8.4% in the year to August, according to the latest data from the Office for National Statistics (ONS).
The average rent now stands at £1,286 per month.
In England, London saw the steepest rise at 9.6%, while the South West experienced the lowest growth, at 6.4%.
Sarah Coles, head of personal finance at Hargreaves Lansdown (LON:HRGV), called the state of the rental market nothing short of “ensuring rental hell”.
“If renters think there may be light at the end of the tunnel, they’re sorely mistaken. They’re in a deep, dark hole, and that light is coming from somewhere way out of reach. It’s not going to get any closer without significant change to the way the market is operating, and there’s no sign of that any time soon."
Despite government plans to increase housing supply, Coles expressed scepticism that these measures would ease pressures on renters in the near future.
“The government will be hoping that the plan to build more homes will eventually ease the pressure, but this is a long-term ambition, and in the interim, there’s little hope for renters.”
The ONS data also revealed that rental demand remains high, with Zoopla reporting 21 tenants competing for each available property.
The housing market showed a modest uptick, with the average UK house price rising by 2.2% in the year to July, reaching £290,000.
First-time buyers faced an average price of £242,789, while new-build properties saw a significant increase of 23.2%, compared to a 1.3% rise for existing homes.
TGI Fridays’ UK operator collapses into administration
Hostmore PLC (LON:MOREH), the UK operator of Americana-inspired restaurant chain TGI Fridays, has collapsed into administration and therefore been suspended from the London Stock Exchange.
Hostmore’s collapse comes after a failed attempt to acquire the global TGI Fridays brand from the US holding company.
“Unfortunately, all of the board's efforts to implement a lasting solution to support the long-term financial future of the business came against a highly challenging trading and macroeconomic backdrop, and efforts to create value for shareholders through the proposed acquisition of TGI Fridays, while well-advanced, encountered adverse events outside of the Board's control,” the group stated today.
The board has appointed Teneo to oversee the administration process.
“Given the brand recognition, its continued operation in more than 50 other countries, and the level of loyal custom, it’s unlikely to disappear from the UK scene completely,” stated Susannah Streeter, head of money and markets, Hargreaves Lansdown.
“However, a new owner is likely to significantly reduce the number of outlets across the UK, and focus on its more successful restaurants such as in London’s Leicester Square.’’
Train strikes to end as ASLEF accects pay deal
Members of the train driver’s union ASLEF have voted to accept a pay deal, ending a two-year-long dispute with 16 train operating companies.
The agreement was supported by 71% of the union members who voted, bringing an end to a series of strikes across the UK’s rail network.
The settlement includes a backdated pay increase and improvements to working conditions.
Mick Whelan, general secretary, stated: “It just shows what can be done when the grown-ups come into the room.
“The Tory government sat on their hands and refused to talk to us. But this Labour government has worked with us to resolve this dispute.
“The offer is a fair offer and it is what we have always asked for, a clean offer, without a land grab for our terms & conditions.
We achieved more in the first four weeks of a Labour government than we managed under a Tory government that set out to destroy us.”
Wall Street holds steady as interest rate call nears
US markets will hold steady when trading commences this Wednesday as traders await the hotly anticipated interest rate call from the US Federal Reserve.
Futures on the Nasdaq 100 tech index and the Dow Jones Industrial Average suggest they will open flat at 19,454 and 41,645 respectively.
Likewise, the broader S&P 500 is tipped to open flat at 5,640.
Markets are widely expecting a cut from the Fed, but the jury is still out on whether that will be 25 basis points or a chunkier 50 basis points.
Back in London, the FTSE 100 is currently 50 points down at 8,260.
FTSE 100 off its worst?
The FTSE 100 was the worst performing of the European indices at lunchtime, with the London benchmark down 0.7% as it scraped below 8,260 points.
But its now looks to be creeping off its intraday lows, possibly lifted by cautious optimism across the Atlantic.
Next-worst around the continent is the 0.5% decline for the CAC 40 in Paris, followed by the FTSE MIB in Milan, down 0.2%.
Frankfurt's DAX and the IBEX 35 in Madrid are both just below flat, while the Europe-wide Euro Stoxx 600 is down 0.46%.
US futures are pointing modestly higher, with S&P 500 futures just above flat, those for the Nasdaq up 0.2% and Dow Jones futures up 0.1%.
Reckitt in talks to sell £6bn homecare portfolio, reports Bloomberg
Reckitt Benckiser (LON:RKT) Group PLC (LSE:RKT, ETR:3RB) is in talks with interested parties to dispose of its £6 billion homecare portfolio, which includes household brands Air Wick, Mortein, Calgon and Cillit Bang, Bloomberg has reported.
The reported discussions align with an announcement from the FTSE 100-listed FMCG giant in July that plans to get rid of certain non-core products from its portfolio.
In July, management said it plans to make a “sharper, simpler Reckitt” focusing on high-margin ‘Powerbrands’ including Strepsils, Gaviscon, Nurofen, Dettol, Finish, Durex and others in the consumer health and hygiene business.
A formal sale process led by Morgan Stanley (NYSE:NYSE:MS) is expected to commence within months, according to the Bloomberg report.
Reckitt is also mulling the disposal of its Mead Johnson Nutrition business, housing brands Enfamil and Nutramigen.
The household goods giant has struggled to grow the business in recent years, leading to a double-digit fall on its share price in the past 12 months alone.
Net revenues fell 3.7% year on year and operating profit margins tightened by 20 basis points the first half of Reckitt’s current financial year.