- FTSE 100 index down 30 points
- Tech stocks drag Wall Street lower
- UK blue-chips have lost over 5% of their value this week
- NatWest results beat expectations
2.50pm: FTSE is down, Wall Street is downer
London’s blue chips are down but their losses are small beer compared to those across the pond.
While the Footsie is being supported by the heavyweight banking and oil sectors, stateside there are very few names in the green.
On the Dow Jones only one of the top 15 largest companies is not in the red so far, being UnitedHealth, while the tech giants are all lower, with Apple down 5%, Amazon down 4%, Facebook down 3%, Alphabet down 2% after earnings overnight, with Microsoft, Tesla and Netflix also dragged lower.
Worst of all was Twitter, which is down 20% on active user growth of 1mln that was short of expectations, even though quarterly sales were well above analyst estimates.
The declines were in spite of encouraging macro data.
Personal income in September rose 0.9%, well above the consensus, while real consumer spending rose 1.2%, also above forecasts.
Meanwhile, the Chicago PMI dipped to 61.1 in October from 62.4 in September, versus a consensus estimate of 58.0.
“We expected a bigger correction after the jump in September, but the index has remained at a very high level,” said Pantheon Macroeconomics.
The Dow Jones is 1.4% lower and the S&P is down 1.7%, while the tech-fuelled Nasdaq has slumped 2.7%.
In London, the FTSE 100 has given up 30 points or 0.6% to 5,551.
1.44pm: Wall Street falls at the opening bell
Wall Street found itself on the back foot in early trading on Friday as market nerves were rattled by the upcoming election and spiking cases of coronavirus.
Shortly after the opening bell, the Dow Jones Industrial Average was down 0.12% at 26,626 while the S&P 500 slipped 0.2% to 3,303 and the Nasdaq fell 0.52% to 11,126.
The negative sentiment in New York seemed to have been mostly unaffected by US personal income data, which increased by 0.9% in September, more than expected and rebounding from a 2.5% decline in August.
The number may provide some relief about the state of the economy, however, it did little to prevent the general malaise.
Back in London, the FTSE 100 had recovered some of its losses but was still down 4 points at 5,577 shortly before 1.45pm.
12.55pm: Wall Street to open lower
The Footsie has slipped back to earlier lows, down 18 points or 0.3% to 5,563.62, and the needle on the Wall Street equity futures market is back pointing towards a lower start as worries about the economic effects of coronavirus weigh on sentiment.
This is despite a bumper bout of tech earnings overnight and strong GDP growth data in Europe.
“It’s been one of those weeks,” said market analyst Craig Erlam at Oanda, “reports on the last quarter have been very encouraging and ordinarily the mood would be far more buoyant.”
A strong US recovery in the third quarter, earnings beats from big tech and even above-expected growth data from Germany, France, Italy and Spain don’t tell the full story, he said.
While the data is great, it’s already old news, it won’t help as many economies around the world are forced to shut down again, meaning the fourth quarter is “shaping up to be painful”.
Erlam said this is what makes the failure for the two Washington parties to agree a stimulus before the election was all the more disappointing.
“Now we face an election that could bring with it considerable uncertainty at a time when Covid cases and hospitalizations are rapidly on the rise.
“This hasn’t been the best week for investors and the next few sessions may not see a dramatic improvement. Covid will continue to be a major downside risk, especially if we see the US going into lockdown in the way that’s now happening across Europe.”
There are upside risks as well though, Erlam said.
“The election may go quite smoothly and lawmakers may return and quickly come to an agreement without the distraction of the election. The Fed was exceptional earlier in the pandemic and there may be some muscle memory there, with the panic that delivered those remarkable days being less evident.
“A Covid vaccine would surely lift the mood. It’s not all doom and gloom. But there may be some more downside to come yet.”
11.30am: Vaccine report jolts markets into life
After wallowing in the red for most of the morning, the FTSE 100 and US stock futures tried to pick itself up just before noon after some positive news emerged about potential COVID-19 vaccines being developed by AstraZeneca (LON:AZN) and Pfizer (NYSE:PFE).
The Medicines and Healthcare Products Regulatory Agency said it has started accelerated reviews of the COVID-19 vaccines to enable the UK to approve the first potential jab as quickly as possible.
A ‘rolling review’ of the Pfizer vaccine started in recent weeks, Bloomberg has just reported, citing an unnamed source with knowledge of the situation.
The UK medicines regulator has also been speeding up its review of the vaccine being developed by Oxford University scientists in partnership with AstraZeneca, a fact confirmed by a company spokesperson.
Earlier this month Pfizer said its vaccine candidate was expected to be ready for submission to the authorities in the third week of November, though this week said it has not yet conducted an analysis of the efficacy of the vaccine.
Trial data from the Oxford vaccine is also anticipated in the coming months.
London’s blue chip index rose to 5,589, up around seven points on the day, but then quickly slipped back into the red.
Across the Atlantic, stock futures had been pointing to big falls but after the Bloomberg story emerged a flatter open was anticipated.
A continued rise in Covid-19 cases globally ensures that the market remains on the back foot as we head into the weekend, said Joshua Mahony at IG.
“European markets are drifting lower as we end the week, with stocks remaining under pressure after global daily coronavirus cases hit a record high after breaching the 500,000 threshold.
“While much of the selling pressure seen this week has been focused on mainland European indices such as the DAX, the futures markets point towards a US-led selloff today as new coronavirus cases in the country topped 91,000 with just days left until the election. From a US-perspective, the prospect of a dramatic rise in Covid-cases should bolster Biden’s election prospects.”
However, with Democrat challenger Joe Biden seemingly more willing to lock down the US in a bid to control the virus, Mahony said a victory for the Democrat leader could see markets tumble as the prospect of a nationwide lockdown overshadows stimulus optimism.
9.45am: Housebuilders lifted by robust prices
Banks, oilers and housebuilders are providing some upward momentum for the Footsie on the last trading day of the month.
Blink and you missed it, but this saw the index momentarily step into positive territory, but has dropped back just below the waterline at 5,575.23.
Banks are on the front foot after a week of better than expected third-quarter results capped by well-received numbers from NatWest today.
“The stakes continue to rise ahead of the OPEC meeting in a month’s time,” said analysts at AJ Bell.
Meanwhile, builders like Barratt (LON:BDEV), Persimmon (LON:PSN) and Taylor Wimpey (LON:TW.) have been given some extra impetus as Nationwide reported an 0.8% rise in house prices in October, the fourth successive monthly gain that lifted the year-on-year increase to 5.8%, the highest since January 2015.
The building society said the gain of 3.5% for the three months to October was the strongest for 11 years and noted that “behavioural shifts may also be boosting activity, as people reassess their housing needs and preferences as a result of life in lockdown”.
Nationwide reported that around 10% of those surveyed in September “said they were in the process of moving as a result of the pandemic, with a further 18% considering a move for the same reason”, with a pattern evident “across the country, especially in London”, with more than a third of those considering to move looking to move to a different area, with nearly 30% doing so to access a garden or outdoor space more easily.
This comes a day after the Bank of England reported that mortgage approvals for house purchases increased to a 13-year high in September.
However, David Westgate, chief executive at estate agent Andrews Property Group, said: “House price growth may have hit a five-year high in October, but there will be fewer and fewer high fives in the property market as we enter the winter months.”
He said the future is looking far less certain: “Lenders have grown increasingly conservative over the past two months with the result that first time buyers are struggling to secure finance.
“Mortgage providers are reading the macroeconomic runes and are not liking what they’re saying. This will have a ripple-effect up through the market.
“That said, we’re not expecting the market to enter some kind of stasis mode during the winter.
“Cash-rich or well-financed landlords and people who have decent equity in their homes are remaining active in what is increasingly a buyers’ market.”
8.50am: Weak end to grim week
The FTSE 100 opened lower on Friday, looking set to end a bruising week in the doldrums with coronavirus (COVID-19) lockdown fears continuing to drive sentiment.
The index of UK blue-chips opened in slightly better shape than had been predicted, but was still off 21 points at 5,561.14.
Over the last five trading days, UK blue-chips have lost over 5% of their value and are down 27% since their early-year peak as the tentative recovery from the March’s lows appears to have stalled.
France, Spain, Ireland and Germany have unveiled new, draconian restrictions on movement in a bid to slow the infection rate – and experts say it is only a matter of time before the UK follows suit.
One report estimates that almost 60 % of the British population, that’s almost 33mln people, will be under stricter rules by Monday. It is also thought London could be moved into the top tier in two weeks unless infection rates drop significantly.
On the market, NatWest (LON:NWG) topped the risers, gaining 4.4% after third-quarter results followed the banking sector trend by coming in ahead of expectations.
“NatWest has rounded off the banking season with a surprise swing to profit for the quarter, driven largely by a lower impairment charge and an improved contribution from its retail banking unit,” said Richard Hunter, head of markets at Interactive Investor.
“The retail banking division, formerly known as UK Personal Banking, accounts for around 40% of overall income and is a good gauge of consumer activity. Increased spending and mortgage applications in the period drove an improvement in fortunes, despite pressure on income resulting from lower overdraft fees and a dilution of mortgage margins.”
Rolls Royce (LON:RR.) continued to run out of steam as ripples were felt from the jet engine maker’s rights issue. It was down 7.7% early on.
Among the smaller stocks, Open Orphan (LON:ORPH) stood out with an 8% gain after it landed a contract with a tier-one German pharma company.
Proactive news headlines:
Anglesey Mining PLC (LON:AYM) said its12%-owned associate Labrador Iron Mines Holdings (LIM) has started work on a Preliminary Economic Assessment for its Houston project in Labrador, Canada. It is the first development of LIM’s assets since production halted in 2014 because of the low iron ore price, said Anglesey. Iron prices have started to recover over the past two years and with increased inquiries and expressions of interest from potential off-takers, LIM is now working to advance Stage 2 of its planned direct shipping ore mining operations, Anglesey added.
Symphony Environmental Technologies PLC (LON:SYM) said its partner Promociones Fantásticas has launched new biodegradable and antimicrobial drinking straws using the group’s technology. Promociones Fantásticas is a Colombian drinking straws producer, with Symphony’s exclusive distributor Latin Pack is the masterbatch supplier. Promociones Fantásticas has been using the d2w technology, which makes plastic to biodegrade quicker, for three years.
Westminster Group PLC (LON:WSG) said its CSR arm, the Westminster Foundation has delivered and installed a sanitisation tunnel to Freetown International Airport (FNA), Sierra Leone. The company added that the tunnel will help reassure passengers that FNA is a coronavirus (COVID-19) secure environment and boost traffic through the airport. Westminster provides security and screening services for the airport and said it had promised earlier in the year to provide it with a mass sanitisation tunnel.
Applied Graphene Materials PLC (LON:AGM), the producer of specialty graphene additives, revealed that it has signed a distribution agreement with GOBARR Kimya Ticaret ve Pazarlama Ltd. Sti (Gobarr). The agreement will further expand Applied Graphene’s distribution network to target customers in the Turkish coatings and polymers sector. Gobarr’s team of industry specialists has over 25 years’ experience in supplying innovative products to the paint and coatings market across Turkey. The agreement will make Gobarr the market’s leading supplier of graphene dispersions focused on Turkey’s industrial coatings sector.
IQ-AI Ltd. (LON:IQAI) said it has advanced its contrast free imaging project to the next stage, validation testing. The group said the validation stage includes subjecting the Artificial Intelligence (AI) model to a large and varied set of data, and statistically comparing the model’s output to “ground truth”, or actual, images acquired using contrast. The testing results will refine the model sufficiently to prepare it for the final stage – regulatory clearance, it added.
Open Orphan PLC (LON:ORPH) said its Venn Life Sciences arm has won a two-year contract with a ‘tier-one’ German pharmaceutical company. The new agreement is an extension of work already being undertaken and will see Venn deliver further analytical services. These services will include pharmacometrics (using maths, statistics and the sciences to model the interaction of drugs in the body) and pharmacokinetics, a branch of pharmacology that assesses how a drug is absorbed and distributed by the body.
Oncimmune Holdings PLC (LON:ONC) said it has a “growing pipeline” of opportunities as it completed the first year of its three-year plan to commercialise its EarlyCDT lung screening technology and its ImmunoINSIGHTS service. In its full-year results statement, investors were told the company was in “active late-stage discussions with a number of national health systems and pharmaceutical partners, globally”. It said further opportunities for ImmunoINSIGHTS have been created as a result of the group’s close involvement with the government’s coronavirus (COVID-19) programme, and specifically, the development of an infectious disease NavigAID panel.
[email protected] Capital PLC (LON:SYME), the online inventory finance platform, said it has chosen to issue its securitised note to one investment group rather than syndicate it. In a statement, SYME said that following detailed evaluation it has agreed to partner on an exclusive basis with a global investment fund whose intention is to subscribe for the whole of the first issuance and become an ongoing partner of the company. “Whilst this decision has put back slightly the date of completion of the first issuance, the opportunity to form an ongoing partnership with the Investor will provide valuable benefits to SYME, both in the short and long-term,” the group said in the statement.
Minds + Machines Group Limited (LON:MMX) said it has concluded its formal investigation to determine whether certain revenue associated with a specific contract had been correctly recognised in the year ended December 31, 2019, and the six months to June 30, 2020. The domain name specialist said it believes that revenue attached to the specific contract has been incorrectly recognised. It was previously announced that cash of US$1.125mln was received in connection with the specific contract and revenue of US$938,000 was recognised in the 2019 financial year. Following its investigation the company said it believes any cash sums initially received pursuant to this contract should have been classified as a deposit against future sales and then recognised as revenue as the company’s partner made sales to end-users. To date, the partner has made US$201,900 of end-user sales under the contract.
Metal Tiger PLC (LON:MTR), the AIM-listed investor in natural resource opportunities, announced on Thursday that it has purchased 300,000 shares in ASX-listed Los Cerros Limited (ASX:LCL) at an average price (before costs) of approximately A$0.1575 per share for a total consideration of approximately A$47.2k. Following this investment Metal Tiger will be interested in 3.50 million shares and 1.25 million A$0.10 warrants in Los Cerros. Los Cerros is an exploration and mining company with a dominant land position within the Andes and Quinchia regions of the Mid-Cauca Gold belt in South America. Los Cerros’ primary focus is the Qunichia Gold Portfolio, which is located in Colombia. For the year ended December 31, 2019, Los Cerros reported a net loss of A$4.16mln and, as at June 30, 2020, reported net assets of A$15.76mln.
In a separate statement on Friday, Metal Tiger provided an update in relation to its investment in Cobre Limited (ASX:CBE) which has released its quarterly activities report to September 30, 2020. Metal Tiger owns 18.79% of the issued share capital of Cobre. The link to Cobre’s quarterly activities report can be found here: https://asx.api.markitdigital.com/asx-research/1.0/file/2924-02302328-2A1260301?access_token=83ff96335c2d45a094df02a206a39ff4. Additionally, the link to Cobre’s quarterly cash flow report can be found here: https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02302329-2A1260302?access_token=83ff96335c2d45a094df02a206a39ff4
Location Sciences Group PLC (LON:LSAI), the leading location verification company, has announced the issue of a total of 16,969,098 new ordinary shares of 0.1p each in the company to a number of directors as payment for fees owed for certain periods since February 1, 2020, totalling £81,451.67. The new ordinary shares are being issued at a price of 0.48p per share, a 6.7% premium to the closing mid-market share price on October 29, 2020.
Thor Mining PLC LON:THR) ( ASX:THR) has said its annual general meeting will be held at 7pm (Australian Central Standard Time) on November 25, 2020, at the Thor Mining offices, 58 Galway Avenue, Marleston, South Australia
Seeing Machines Limited (LON:SEE), the advanced computer vision technology company that designs AI-powered operator monitoring systems to improve transport safety, has announced that its CEO Paul McGlone will present the company’s Year End Results presentation via Webcast on Monday, November 2, 2020, at 9.00am GMT. Hosted by Proactive Investors, the webcast can be streamed via YouTube: https://www.youtube.com/watch?v=0KlBkoQ2vME&feature=youtu.be
Rosslyn Data Technologies PLC (LON:RDT), a leading global big data technology company, has announced that at its annual general meeting held on Thursday, all resolutions were duly passed. Full details of the voting results, as well as the full proceedings of the AGM and questions, are available on the company website at: https://www.rosslyndatatech.com/investors/2020agm
6.50 am: Tumble predicted for Friday
The FTSE 100 index looks set for big falls on Friday in tandem with overnight plunges by US stock futures and Asian markets after US tech results failed to excite and amid worries over spiralling coronavirus infections and the outcome of next week’s presidential election.
Spread betting firm CMC Markets expects the blue-chip index to open around 90 points lower at 5,490, having closed flat yesterday, just off 1 point at 5,581.75. The Footsie recouped earlier falls on Thursday after New York stocks started with gains after the US reported a record quarterly GDP growth number.
Overnight in New York, the Dow Jones Industrials Average closed 139 points, or 0.5% higher at 26,659, albeit having dropped 900 points on Wednesday, its biggest fall since June. The broader S&P 500 index recovered 1.2% and the tech-laden Nasdaq Composite rallied 1.6%
However, the mood turned after-hours in New York, with US futures dropping sharply as the big batch of tech numbers prompted profit-taking in the recent high-flyers.
Naeem Aslam, chief market analyst at Avatrade.com said: “Big tech stocks impressed Wall Street by beating their revenue estimates; however, some failed to excite other metrics. For instance, Apple smashed the sales number for the fiscal third quarter. The sale number came in at $64.7 billion; however, Greater China sales plummeted by 29%. This is a concern for investors because China is a major market for Apple, and the fact that sales have dropped in China has raised alarm bells for investors.
“As for the social media giants, Twitter’s sales number was impressive; sales revenue soared by 14% to $936 million. Speculators who were looking for a drop of 5% in the sales number are likely to face pain as the stock may attract new investors. However, the disappointing element was that the user growth wasn’t impressive, and this may trigger some profit-taking.
“Facebook showed that it has the ability to weather the ad boycott storm as the sales number bumped 22% to 21.5 billion. Monthly active users also confirmed strong growth.”
With the tech declines, Asian markets were hammered on Friday, with Hong Kong’s Hang Seng index dropping 1.8%, and Japan’s Nikkei 225 index off 1.5%.
In London, the corporate spotlight Friday will be on NatWest PLC (LON:NWB), the last of the FTSE 100 banks to report third-quarter numbers.
Around the Markets:
- Pound down 0.2% to US$1.2905
- Gold up 0.2% to US$1,870.15
- Brent Crude Oil down 1% to US$37.29
6.45am: Early Markets – Asia/Australia
Shares in the Asia-Pacific region fell heavily after US stock futures declined on Friday trading with the Dow Jones Industrial Average futures dropping 1.91%.
In Japan, the Nikkei 225 fell 1.52% whiles South Korea’s Kospi dived 2.33% below the flatline.
Hong Kong’s Hang Seng slipped 1.89% by the afternoon along with mainland Chinese stocks, with the Shanghai Composite down 1.19%.
Australia’s S&P/ASX 200 rose by as much as 0.4% in early trade but later gave up its gains and closed 0.55% lower.
Proactive Australia news:
Strategic Elements Ltd (ASX:SOR) is escalating development of self-charging flexible battery technology under collaboration with the University of New South Wales (UNSW) and will achieve scale-up of 1-litre of ink within the next four weeks.
Lithium Australia NL’s (ASX:LIT) (OTCMKTS:LMMFF) (FRA:3MW) 90%-owned Envirostream Australia Pty Ltd has received grant funding of $201,399 from Sustainability Victoria under the e-Waste Infrastructure Grant Round 2.
Lotus Resources Ltd (ASX:LOT) has completed a scoping study for Kayelekera Uranium Project in Malawi, Africa, which demonstrated its capacity to be one of the first operations to globally restart uranium production to meet a growing supply shortfall.
YPB Group Ltd (ASX:YPB) made significant business achievements with technical and commercial advances in the third quarter of the current year despite ongoing impediments from COVID-19 restrictions. Nanoveu Ltd (ASX:NVU) is experiencing growing interest in its antiviral products evidenced by the September quarter which saw increased international sales momentum.