- FTSE 100 index slides 9 points
- Household Finance Index remains at 40.8 in October
- Household finances remain under severe strain
12.30pm: Sterling regains its mojo; US indices to rise on stimulus programme optimism
Hopes that the setting of a 48-hour deadline for finalisation of a fiscal stimulus package will get the job done are boosting US sentiment.
Spread betting quotes suggest the Dow Jones will race 255 points higher at the outset to 28,749 while the S&P 500 is set to open 18 points higher at 3,501.
The tech-heavy NASDAQ Composite is seen rising 218 points to 11,935.
“The proposed US coronavirus relief package remains in focus. Nancy Pelosi, of the Democrats, said that she is optimistic about a deal being struck before the US presidential election, but there was an acknowledgement that differences still exist,” said CMC’s David Madden.
“Some people are less convinced that an agreement can be reached … by tomorrow – the deadline that Pelosi set out. It would seem that traders are taking the view that where there is a will there is a way attitude as the political landscape isn’t looking too great but US index futures are higher,” he added.
Traders are also drawing encouragement from Chinese data this morning, which while mixed, had some positive aspects that they were quick to spot.
“China’s third-quarter GDP growth figures were slightly below expectations, but the broad picture shows the key importance of virus containment as the dominant driver of recovery. Compared to the developed world, China’s growth has bounced back stronger and quicker – today’s print confirms that – without the kind of kitchen sink policy support unleashed in developed market countries as lockdowns came online in March,” said Fidelity International‘s Salman Ahmed.
“High-frequency data shows that China’s economic recovery is still strong and the bounce back from golden week is also starting to show in the data. According to the IMF, China is likely to be the only country to register positive growth in 2020 and is projected to deliver more than 8% growth in 2021,2 he added.
On the corporate front, traders are ruminating over third-quarter figures from oilfield support services giant Halliburton.
Senate returns today at 4:30pm but no votes will take place until tomorrow on PPP bill and Senate GOP $500B COVID-19 relief bill on Wednesday. McConnell plans for the Senate to take up Supreme Court nomination of Amy Coney Barrett Friday, the day after Senate Judiciary Cmte vote.
— Craig Caplan (@CraigCaplan) October 19, 2020
The adjusted earnings per share, at 11 cents, were three cents higher than analysts had expected but revenue of US$2.98bn was down 46% year-on-year and was below the consensus forecast of US$3.09bn.
In London, the mood remained sombre, with the FTSE 100 down 9 points at 5,911, as sterling regained its virility on foreign exchange markets on weekend reports that a Brexit compromise may yet be thrashed out. Sterling was four-fifths of a cent firmer against the greenback at US$1.30.
11.35am: Little sign of recovery in householders’ optimism
The IHS Markit UK Household Finance Index for October was unchanged from September at 40.8.
The index measures respondents’ perceptions of financial well-being and is one of those indices where a value below 50 indicates things are getting worse, so the October reading was another grim one.
“October survey data provide little good news, with household finances remaining under severe strain. The overall rate of deterioration did not worsen on the month, but was still sharp overall,” said Lewis Cooper, an economist at IHS Markit.
“Households reported a fall in the availability of cash, a quicker reduction in their spending, further use of savings and increased demand for unsecured credit, all of which highlight the hardship facing some UK households at present. This again resulted in pessimism with regards to financial wellbeing in 12 months’ time.
“With new COVID-19 related restrictions introduced, job security perceptions remained negative and incomes from employment fell again in October. Moreover, the measures are likely to have a severely negative impact on household finances, and as such, hopes of a recovery will be on hold until the pandemic is under control and restrictions loosened,” he added.
IHS Markit’s UK Household Finance Index (HFI) for October is worth a look. It’s mostly bad news, but – despite the grim headlines – people’s perceptions of their #job security did at least continue to recover from April’s low…https://t.co/Uzp1nSFQbj pic.twitter.com/9S4LDsbPu2
— Julian Jessop (@julianHjessop) October 19, 2020
The FTSE 100 was down 9 points at 5,910.
11.00am: An ocean of calm
Trading on Euronext exchange has halted because of a technical glitch and you might be forgiven for thinking the same things has happened in London.
The FTSE 100 is up 6 points (0.1%) at 5,925 and remains on a short leash tethered to Friday’s closing value.
There has been little news flow from the top-tier [Don’t mention tiers! – Dastardly Dom] companies. Drugs giant AstraZeneca has popped out a couple of announcements but as neither of them are about a coronavirus vaccine, the market has not shown much interest.
AstraZeneca‘s Trixeo Aerosphere has been recommended for marketing authorisation in the European Union for maintenance treatment in adult patients with moderate to severe chronic obstructive pulmonary disease.
The Committee for Medicinal Products for Human Use also gave an indication extension to Forxiga of its marketing authorisation in the European Union for the treatment of symptomatic chronic heart failure with reduced ejection fraction in adults with and without type-2 diabetes.
The shares were up 0.2% at 8,236p.
VG news @CommonsEAC doing follow up inquiry. Hope they bring @boohoo back to question & call in shareholders @JupiterAM_UK @InvescoEMEA & @BaillieGifford whose response to findings of Levitt review makes mockery of their claims to champion Environmental Social & Governance #ESG https://t.co/cpL7G44Dcx
— Liz Kendall (@leicesterliz) October 6, 2020
9.40am: The starter’s pistol was fired but did anyone hear it?
Most of us appreciate a gentle start to the working week and that’s what the stock market is giving traders.
The FTSE 100 was up 4 points (0.1%) at 5,923, helped by some half-decent economic data from China.
The Chinese economy grew by 4.9% in the third quarter, which was an improvement on the previous quarter’s growth of 3.2% but below the 5.5% rise that was forecast.
“Any ill-feeling was tempered by improving industrial production and unemployment rate numbers, and, crucially, a far better than expected retail sales reading. That metric – which, after the GDP gross domestic product] figure, is the most important for investors – surged from 0.5% in August to 3.3% in September, marking the second positive reading in a row,” noted Connor Campbell at Spreadex.
Across the pond, the Speaker of the House of Representatives, Nancy Pelosi, has set Tuesday evening as a deadline to reach a coronavirus stimulus deal ahead of the presidential election.
“While the odds are still slim, market participants are reacting positively to every progress made as time is running out to maintain the momentum of the economic recovery,” Milan Cutkovic at Axi.
“Investors will need strong nerves in the coming days and weeks. Fears about the consequences of a second corona wave, Brexit uncertainties and the upcoming elections in the United States will guarantee a continuation of the stock market’s roller-coaster ride,” Cutkovic said.
8.50am: Better than expected start for Footsie
The FTSE 100 got off to a slightly better than anticipated start to proceedings on Monday amid coronavirus (COVID-19) vaccine hopes and data showing a resilient economic performance from China.
The index of UK blue-chip shares opened 25 points higher at 5,944.45.
Keeping the lid on any further exuberance at the start of the trading week, however, were Brexit negotiations, which have an impending train wreck feel to them.
Any sniff of a COVID-19 inoculation, such as the one seen over the weekend as Pfizer said it was ready to file for regulatory sign-off for its coronavirus prophylactic, seems to have an immediate impact on travel-related stocks.
Flying high early on Monday was British Airways owner IAG (LON:IAG), which gained 2%.
Rolls Royce (LON:RR.), which maintains jet engines for fleets of the world’s airlines, jumped a further 4%.
That said, much of the recent Lazarus-like revival of Rolls, which has doubled in value since its low at the start of October, has been put down to short covering.
On the debit side, traders appeared to be calling the end to the recent run for Just Eat (LON:JET), up 15% in the last month, as the stock was marked down 1.3%.
On the FTSE 250, IWG (LON:IWG), the office group formerly known as Regus, was ahead 6.9% after an upgrade to ‘buy’ from Berenberg.
Proactive news headlines:
Landore Resources Ltd (LON:LND) has begun an autumn-winter drilling programme on the BAM gold deposit in Ontario, Canada. The company will drill 14,000 metres aimed at further infilling and extending the defined resource of 1,015,000 ounces of gold, and to test the depth potential of the previously delineated mineralisation.
Symphony Environmental Technologies PLC (AIM: SYM) said the largest baker in Turkey, Uno Bakery, has launched a biodegradable packaging programme using Symphony’s d2w technology. Uno is the first major bakery in Turkey to upgrade most of its packaging with d2w biodegradable technology, Symphony said. The collaboration follows a similar partnership the company has with the largest bakery in Mexico. Packaging made with d2w can be recycled if facilities are available, but if it escapes collection and ends up in the environment as litter, it will degrade and biodegrade in a continuous, irreversible and unstoppable process, in the same way as nature’s wastes and much faster than regular plastic, the biodegradable plastic specialist noted.
Shield Therapeutics PLC (LON:STX) has confirmed that the generics giant Teva Pharmaceutical Industries has withdrawn its patent challenge, which had gone to the appeal stage. The company said this means European Patent No.2668175, which covers the “process for preparing an iron hydroxypyrone” has become final and that the patent will be maintained as amended on March 14 last year. Additionally, Teva’s ending of its opposition to European Patent No.3160951 (“crystalline forms of ferric maltol”) means the patent is maintained as granted, providing protection out to October 2035.
Ceres Power Holdings PLC (LON:CWR) has agreed an expanded collaboration with South Korean group Doosan which gains the licence to manufacture Ceres’ proprietary solid oxide fuel cell stacks. Doosan plans to build a manufacturing facility with an initial 50MW capacity by 2024. It is worth GBP36mln to Ceres over 3 years, plus a further GBP7mln potentially due subject to key performance indicators (KPIs). This income precedes longer term royalties on the sale of fuel cell stacks.
IXICO PLC (LON:IXI), the artificial intelligence-driven data analytics company focused on neuroscience, has racked up its fourth consecutive year of strong top-line growth, seeing underlying earnings double. In a trading update for the year to the end of September 2020, the group said revenue rose by 26% to GBP9.5mln, up from GBP7.6mln the year before, signifying the fourth year in a row that revenue had increased by more than 25% year-on-year. Earnings before interest, tax, depreciation, and amortisation (EBITDA) more than doubled to achieve at least market expectations of GBP1.1mln (2019: GBP0.5mln), the firm said. In a separate announcement, the company revealed that Dr Robin Wolz, its senior vice president of Science & Innovation will present on the industry panel at the virtual SCA & ARCA Global Conference, taking place on October 19-21, 2020.
Amryt Pharma PLC (LON:AMYT) (NASDAQ:AMYT) said it has signed a distribution deal for Lojuxta covering 17 countries in central and eastern Europe (CEE). Swixx BioPharma, which also has the exclusive contract for Amryt’s Myalepta, will start deliveries later this month. Lojuxta, also known as lomitapide, has been developed to treat adults with a rare cholesterol disorder.
IQGeo Group Plc (LON:IQG) has secured a major contract extension with a large utility network operator in the USA. The company will continue to provide the client with software licenses and services. It has been using IQGeo’s Inspection & Survey application for gas leak detection in its utility networks. The new contract also includes meter surveys and increases the number of divisions deploying IQGeo technology. The value is anticipated at US$600,000.
Advanced Oncotherapy PLC (LON:AVO), the developer of proton therapy systems for cancer treatment, is to set out its stall at an investor event on Monday. The company’s management team will discuss the broader market potential for proton therapy and outline how Advanced Oncotherapy’s LIGHT system could accelerate the adoption of proton therapy as a treatment modality for several different cancer indications. The team will also discuss how the LIGHT system can potentially be adapted for FLASH delivery of protons, an emerging mode of proton therapy treatment that uses ultra-high dose rates.
BlueRock Diamonds PLC (LON:BRD) said it has sold 2,900 carats at an average price of US$300 per carat. The aggregate consideration amounted to just over US$870,000. The production comes from the company’s Kareevlei diamond mine in the Kimberley region of South Africa.
88 Energy Ltd (LON:88E) told investors it has increased its stake in the area including and surrounding the previously Charlie-1 well in Alaska to 75% from 30%. The ‘Area A’ comprises around 40% of the gross Project Icewine acreage. A new independent resource estimate for this area is anticipated in the coming weeks. It is planned that a new farm-out process will follow the release of the report.
Coinsilium Group Limited (AQSE:COIN) has told investors that its shares begin cross-trading publicly on the OTCQB Venture Market (OTCQB) in the United States on Monday. The shares will trade under the ticker symbol ‘CINGF’. Previously, they were quoted on the OTC’s Pink Open Markets but the group said the upgrade to OTCQB provides greater access to new and materially larger pool of prospective US investors.
Europa Metals Ltd (LON:EUZ) has been awarded a EUR466,801.50 grant by the Centre for the Development of Industrial Technology, a Spanish government entity operating under the umbrella of the Ministry of Science and Innovation. The grant is for use towards research and development at the Europa’s wholly-owned Toral lead, zinc and silver project in the region of Castilla y Leon, north-west Spain. The grant is categorised as a partly refundable loan with a nil per cent interest rate.
Shanta Gold Ltd (LON:SHG) said it produced 19,973 ounces of gold from its New Luika mine in Tanzania during the third quarter of 2020. That, in turn, generated underlying earnings (EBITDA) of US$22.5mln, with all-in sustaining costs (AISC) at US$883 per ounce, the group added. The company closed out the period with net debt of US$5.1mln, following a US$7.8mln cash payment related to the acquisition of the new West Kenya project.
Afarak Group PLC (LON:AFRK) said that overall production of speciality alloys and ferroalloys during the third quarter of 2020 dropped by 60.1% when compared to the same quarter of the prior year. Speciality alloys production dropped by 31% to 17,411 tonnes, while ferroalloys production dropped by nearly 70% to 23,325 tonnes, it added. Reduced mining activity in the South African mines resulted in significant lower mining volumes as the company focused on the protection of staff during the coronavirus pandemic.
Salt Lake Potash Ltd (ASX:SO4) (LON:SO4) (OTCMKTS:WHELF) has added operational and potash experience to its board through the appointment of Phil Montgomery and Peter Thomas as independent non-executive directors. These appointments, which are effective immediately, comes as the company drives the Lake Way Sulphate of Potash Project towards first production.
Power Metal Resources PLC (LON:POW) the AIM-listed metals exploration and development company said on Friday that it has received a notice to exercise warrants over 2,200,000 new ordinary shares of 0.1 pence each in the company, comprising 1,000,000 warrants at an exercise price of 0.75p per ordinary share and 1,200,000 warrants at an exercise price of 1.0 pence per ordinary. The group said subscription monies of GBP19,500 have been received by Power Metal in respect of these exercises.
Genel Energy PLC (LON:GENL) has announced the appointment of BMO Capital Markets as its joint corporate broker, effective immediately. BMO Capital Markets will work alongside JP Morgan Cazenove, Genel’s current joint corporate broker.
Avation PLC (LON:AVAP), the commercial passenger aircraft leasing company, said it continues to manage its capital structure through the coronavirus (COVID-19) pandemic. In relation to the Avation Capital S.A. 6.5% senior notes due 2021 issued under Avation’s global medium-term note programme, the company added it has retained PJT Partners as financial advisor and DLA Piper as legal advisor to assist with a collaborative dialogue with bondholders. The company kindly asks bondholders to disclose their holdings to the company’s Identification Agents, D.F. King and Orient Capital, to facilitate this dialogue.
Base Resources Limited (LON:BASE) has said its 2020 annual general meeting will be held on Friday, November 20, 2020, at 1.00pm Perth time at the Kimberley Room, Katitjin Centre, Australian Institute of Management WA, 76 Birkdale Street, Floreat, Western Australia; and online via the Lumi software platform using the Meeting ID 379-190-456. A full version of the notice of annual general meeting (Notice), including the explanatory memorandum in respect of the items of business to be considered at the Meeting and instructions on how to access the Lumi software platform, is available at the company’s website: www.baseresources.com.au.
InnovaDerma PLC (LON:IDP), a UK developer of beauty, personal care and life science products, has announced that the company’s AGM will be held on Wednesday, November 11, 2020. at 10.00am GMT. Given current measures around the coronavirus (COVID-19) situation in the UK, the group’s board has decided that the AGM will now be run as a virtual meeting. Shareholders will not be able to attend the AGM at a physical location. Shareholders are therefore requested to submit their votes, in respect of the business to be considered at the AGM, via proxy, as early as possible. All resolutions at the AGM will be decided on a poll. To ensure that shareholders are able to follow the proceedings of the AGM, the company will provide access to an online audio and presentation link, accessible via the online Investor Meet Company platform. Shareholders that wish to attend the AGM should register for the event in advance via the following link: https://www.investormeetcompany.com/innovaderma-plc/register-investor
Oncimmune Holdings PLC (LON:ONC), the leading global immunodiagnostics group, has said it will be announcing its full-year results for the year ended May 31, 2020, on Friday, October 30, 2020. The group said Adam Hill, its chief executive officer, together with Matthew Hall, chief financial officer, will host a presentation and conference call for analysts at 11.30am GMT on the day of the results. For conference call details please contact Alexander Davis of FTI Consulting at [email protected] or 020 3727 1000. The management team will also host on Investor Meet Company a live presentation of the results on Friday, October 30, at 3.00pm GMT. Access to Investor Meet Company is free and interested parties can register to attend the presentation via the following link: https://www.investormeetcompany.com/oncimmune-holdings-plc/register-investor
6.50am: Small positive seen on Monday
The FTSE 100 looks set to make a tentative start to the trading week, ignoring signs of economic recovery and the prospects for a coronavirus (COVID-19) vaccine early in the New Year.
The index of UK blue-chip shares is predicted by the spread betting firms to open just 4 points higher at 5,923.
On Sunday we were treated to a video of the Pfizer production line rattling with bottles of serum months ahead of any regulatory sign-off for the company’s inoculation.
Meanwhile, Professor Jeremy Farrar, a member of the Scientific Advisory Group for Emergencies (Sage), said he saw light at the end of the tunnel as he predicted a jab would be ready for the first quarter next year.
In Asia on Monday, the main markets were lifted by China’s GDP readout, which revealed the world’s second-largest economy expanded by a better than expected 4.9% in the third quarter.
Retail sales, meanwhile, grew by 3.3% last month in another sign the country is starting to quickly recover from the ill effects of the pandemic.
While the Shanghai Composite was flat, the Hang Seng, Nikkei 225 and Kospi indexes all headed higher today.
“Markets in Asia have started the week in a fairly positive fashion on the back of these Chinese numbers, and this appears to be helping to prompt a similarly positive start for markets in Europe this morning, as investors continue to look for some sort of direction,” said Michael Hewson of CMC Markets.
Rumbling on in the background here at home is Brexit with the UK continuing to sabre-rattle about ending negotiations to prepare for a no-deal departure from the EU.
The pound’s downgrade by ratings agency Moody’s, meanwhile, appeared to merit little more than a collective ‘meh’ from the foreign exchange markets.
Later on Monday, the world’s central bankers are taking the stage with scheduled presentations from US Federal Reserve chair Jay Powell, European Central Bank president Christine Lagarde and Bank of England deputy governor, Jon Cunliffe.
Around the markets:
- Pound US$1.2927 (flat)
- Bitcoin $11,440.58 (up 0.47%)
- Gold US$1,906.20 an ounce (flat)
- Brent crude U$42.86 (down 0.24%)
6.45am: Early Markets – Asia/Australia
Stocks in the Asia-Pacific region were mixed on Monday after China released its GDP data.
Mainland Chinese stocks were lower, with the Shanghai Composite down 0.44% after third-quarter GDP grew by 4.9% as compared to a year ago. Chinese economists were expecting a 5.2% GDP growth.
Other markets in Asia were mostly higher with Hong Kong’s Hang Seng up 0.82% while the Nikkei 225 in Japan rose 1.18%.
South Korea’s Kospi advanced 0.54% and in Australia, the S&P/ASX 200 was up about 0.85% near its seven-month high.
Proactive Australia news:
Nexus Minerals Ltd (ASX:NXM) has received high-grade results of up to 1-metre at 57.1 g/t from the second 20 RC holes drilled at Templar prospect within the Wallbrook Gold Project in the Eastern Goldfields of Western Australia.
Magmatic Resources Ltd (ASX:MAG) is planning new drilling to target a priority gold-copper porphyry target zone at Lady Ilse project in the northern extension of Molong Volcanic Belt within the prolific Lachlan Fold Belt of New South Wales.
Hexagon Energy Materials Ltd (ASX:HXG) is focused on progressing work plans for its McIntosh Nickel-PGE Project in the Kimberley region of Western Australia and is encouraged by recent developments at nearby projects.
West Wits Mining Limited (ASX:WWI) has secured the environmental authorisation component of a mining right application for the Witwatersrand Basin Project (WBP) in South Africa and has completed the scoping study for the project.
Carnavale Resources Ltd (ASX:CAV) (FRA:YBB) is on track to complete the majority of its planned exploration for the 2020/21 financial year which is focussed on its Western Australian projects, during the current field season.
Perseus Mining Ltd (ASX:PRU) (TSE:PRU) (OTCMKTS:PMNXF) is on the cusp of reaching its goal of becoming a 500,000-ounce per year gold producer as it brings its third gold mine into production within the next few months.