- FTSE 100 up 21 points
- French energy giant Total to rebrand
- Positive day for US stocks
5.10pm: Footsie ends on the right side of the ledger, albeit barely
The FTSE 250 ended Friday up 3 points at 7,023, and the FTSE 250 added 25 points, 0.1%, to finish at 22,684.
Stock markets are on the up on the final day of the week, with a muted performance from the FTSE 100 outpaced by better returns on Wall Street and in continental Europe,” IG Chief Market Analyst Chris Beauchamp wrote. “With May all but over apart from next Monday, likely to be a dull day indeed, the month is ending on a positive note, as strong momentum continues to carry markets higher while investors learn to acclimatise to an environment of higher inflation.”
In the US, the Dow was up 120 points, 0.4%, to 34,584 at midday. The Nasdaq improved 76 points, 0.6%, to 13,812, and the S&P 500 added 16 points, 0.4%, to 4,217.
Shares of salesforce.com inc (NYSE:CRM) are up more than 13% to $239.05 after the company posted first quarter revenue and earnings that beat Street expectations.
3.40pm: Total announces rebranding with heavy focus on renewables in transformational week for Big Oil
The FTSE 100 trimmed its gains again before close and was up 21 points to 7,041.
French energy giant Total has announced plans to rebrand as TotalEnergies with a heavy focus on renewables.
Shareholders voted in favour of the move and of the group’s environmental plans.
“We want to become a sort of green energy major,” chief executive Patrick Pouyanné was reported as saying by the BBC.
It’s been a transformational week for Big Oil: Royal Dutch Shell (LON:RDSB) received a shock defeat in a Dutch court, which ruled the oil major’s own plans to become a net-zero carbon emissions company by 2050 were too slow.
Shell will appeal the decision but if it loses will have to reduce its emissions by 45% between 2019 and 2030 compared to its own plans for a 20% reduction.
ExxonMobil also saw a heated AGM where activist fund Engine No.1 managed to push out some directors to move strategy away from fossil fuels.
Meanwhile, Chevron shareholders voted in favour of a proposal for the company to target reduction in the emissions created by its customers (rather than just those resulting from its own operations).
2.50pm: Proactive North America headlines:
Harvest One Cannabis (CVE:HVT) (OTCQB:HRVOF) sees strong fiscal 3Q operating performance and revenue as it controls costs
Plurilock Security Inc (CVE:PLUR) (OTCQB:PLCKF) receives software license order from a US pharmaceutical manufacturer
2.40pm: Wall Street opens in the green
The main indices on Wall Street moved higher on Friday morning as traders awaited more details on the expected US$6 trillion spending plans from the Biden administration.
Shortly after the opening bell, the Dow Jones was up 0.41% at 34,606 while the S&P 500 climbed 0.29% to 4,212 and the Nasdaq rose 0.33% to 13,781.
Also making a strong start to the day was cinema chain and Reddit ‘memestock’ favourite AMC Entertainment Holdings Inc (NYSE:AMC), which shot up 29.2% to US$34.50 in early deals as a buying frenzy and short squeeze continued after Thursday’s surge.
Back in London, the FTSE 100 was adding to its gains into late afternoon, rising 27 points to 7,046 at around 2.40pm.
1.45pm: Illegal cryptocurrency mine found near Birmingham
The FTSE 100 was little moved in the early afternoon, rising 20 points to 7,039.
The police has uncovered an illegal cryptocurrency mine in a warehouse near Birmingham.
The huge energy usage of Bitcoin miners means that some less scrupulous entrepreneurs are turning to illegal means to power their operations.
Mining Bitcoin is not illegal, however, the 100 bitcoin mining machines at the Great Bridge Industrial Estate were found to be powered by electricity unlawfully hived off from the mains supply.
Depending on the equipment and how long it had been running, the criminals could have made a significant profit.
Using a single GPU (graphics processing unit) could reap between US$5 and US$12 per day in Bitcoin, depending on the model of the unit and the Bitcoin price, while an ASIC (application-specific integrated circuit) rig could generate around US$20 per day – or £2,000 for the whole bank of machines.
It was estimated by the police that the mine had illegally used thousands of pounds of electricity.
12.50pm: UK approves Johnson & Johnson COVID-19 vaccine
The FTSE 100 held its gains after lunch, rising 19 points to 7,039.
The country has secured 30mln doses of the jab, which should be rolled out later this year.
The formulation is DNA-based, meaning it uses a genetically modified version of the common cold virus (adenovirus) so it can no longer replicate in humans and cause disease.
11.50am: Wall Street set for positive open ahead of US$6 trillion budget announcement
The FTSE 100 stayed put at lunchtime, rising 17 points to 7,037, while US stocks are also expected to open in the green.
Futures are pointing at a 0.5% rise for the Dow Jones to 34,608, while the S&P 500 and Nasdaq are both called 0.3% higher to 4,214 and 13,706 respectively.
President Biden is expected to announce a US$6 trillion budget later on Friday, although analysts advise to take it with a pinch of salt.
“Despite Biden enjoying a slim majority across congress, the ability to get his original plan across the line is doubtful,” said Joshua Mahony at IG.
“Thus while markets will likely enjoy an optimistic end to the week, it could be just a matter of time before we see a heavy dose of reality over just how much of that US$6 trillion will see the light of day.”
10.40am: Insurance ‘loyalty penalty’ to be scrapped from next year
The FTSE 100 trimmed its gains in late morning, rising 16 points to 7,035.
Insurers will no longer be able to charge existing customers more than new ones, the Financial Conduct Authority said.
Price walking, the practice of automatically increasing the premium when it is renewed, will also be stopped.
The proposals follow months of consultation with the industry and years of complaints from consumer groups that the industry unfairly penalises loyal customers.
The financial regulator said that the proposals will save loyal customers an estimated £4.2bn over 10 years and added that 10mln motor or home insurance policies have been held for longer than five years.
“The FCA will stop car and home insurers from ripping off their most loyal customers. However, regular switchers will pay the price. It’s something we’ve seen regularly from the FCA now, where efforts to protect the most vulnerable customers, end up costing savvier consumers more,” said Sarah Coles, personal finance analyst at Hargreaves Lansdown.
“Price walking doesn’t just affect loyal customers. It has also distorted the market so that insurers focus on cutting the cost for new customers above all else. They’ll even offer loss-making deals in order to bring new customers in. The new rules will put a stop to this, because insurers won’t have any incentive to offer incredibly cheap deals to attract customers they hope to price walk later. It means regular switchers will see their costs rise.”
Direct Line PLC (LON:DLG), which does not sell policies through price comparison sites, advanced 3% to 301.9p.
9.40am: Average age of positive COVID-19 tests drops thanks to vaccines
The FTSE 100 was on the rise in mid-morning, advancing 26 points to 7,045.
The average age of positive COVID-19 tests in the UK is 29, according to NHS data, down from 35 at the beginning of April and 41 at the start of the year. It’s the youngest yet recorded.
Experts say it’s likely to be thanks to the vaccine rollout, The Times reported, while under-65s accounted for 69% of hospitalisations in England last week. Last year, 64% of patients were over 65.
People aged over 30 can now book a vaccine in England, with 62mln doses administered across the UK including a full course of two shots to 23.6mln residents.
8.40am: US stimulus replaces inflation as new market motif – but for how long?
The FTSE 100 opened in positive territory although the gains weren’t of the scale of those seen in Asia’s main markets as they welcomed the strong economic recovery in the US.
Jobless claims fell to the lowest level since March of last year, while the annualised rate of growth of the world’s largest economy was 6.4%.
Stimulus rather than inflation is likely to be the key theme on the last day ahead of the long weekend here in the UK following a report the Biden administration is seeking US$6 trillion in federal spending for 2022.
However, this could easily change with the release of Personal Consumption Expenditure data.
“The measure tends to be one which the Federal Reserve monitors closely and is more influential in deciding policy than the more obvious consumer price index,” explained Richard Hunter, head of markets at Interactive Investor.
“Inflationary concerns continue to bubble under the surface. Although in abeyance for the moment, this could be short-lived as the economic data continues to point towards excess demand as growth kicks in, with supply struggling to keep pace.
“As such, a further switch into cyclical, value stocks underpins a flip-flop from investors trying to position themselves for all eventualities.”
Housebuilder Vistry (LON:VTY) was up 2.5% on the back of a Barclays Capital upgrade to ‘overweight’.
6.50 am: Footsie set to float modestly higher
London’s leading shares are set to open modestly higher after a strong showing from US stocks yesterday.
Spread betting quotes indicate the FTSE 100 will rise 24 points to 7,044 at the open.
“The overnight data from the US was a mixed bag,” declared Jeffrey Halley at OANDA.
“Durable Goods ex transport rose respectably by 1.0%, above expectations of 0.80%. Pending Home Sales fell 4.40%, which isn’t much of a surprise given mortgage applications have been falling. With the US freshly vaccinated, escaping the zombie apocalypse in the city and escaping to suburban Wisteria Lane is now less appealing. Most notably, Initial Jobless Claims fell to 406,000, which seems to have supported some modestly bullish sentiment for the remainder of the session,” he added.
The Dow Jones industrial average climbed 142 points to 34,465 while the S&P closed in on another record high, rising 5 points to 4,201.
In Asia this morning, most markets have picked up the baton from the US. Japan’s Nikkei 225 is 603 points heavier at 29,153 and Hong Kong’s Hang Seng is 184 points to the good at 29,297.
The agenda for the UK today is emptier than my book of pithy metaphors.
A couple of FTSE 100 companies have annual general meetings scheduled for today, of which the HSBC Holdings PLC (LON:HSBA) looks the more interest, given the banking giant announced yesterday it would be exiting the US retail banking giant.
On the macroeconomic front, the only items likely to be of interest all relate to the US and include the personal income and spending data releases.
“The former jumped more than 21%M/M [month-on-month] in March due to the receipt of stimulus payments,” reported Daiwa Capital Markets.
Daiwa’s chief economist for America, Mike Moran, expects a 13.0% month-on-month (M/M) downward correction this month.
“Encouragingly, given the resilience seen in the retail data, Mike expects a modest 0.2%M/M lift in spending in April despite the strong 4.2%M/M uplift seen in March. Meanwhile, following the shock CPI reading, Mike estimates that the core PCE deflator will post a 0.5%M/M increase – the most since 2001 – which given reinforcing base effects should lift annual inflation to around a three-decade high of 2.8%Y/Y.”
Good old Mike.
“Finally, Friday will also bring the Chicago PMI for May and the advance merchandise trade report for April. Regarding the latter, Mike expects both exports and imports to ease, but the decline in imports should dominate to deliver a modestly narrower trade deficit for the month,” Daiwa reports.
That’s enough from Mike. Let the trading commence!
Around the markets
- Sterling: US$1.4198, down 0.05 cents
- 10-year gilt: 0.812%, + 5.75 basis points
- Brent crude: US$69.48 a barrel, up 28 cents
- Gold: US$1,895.30 an ounce, down US$3.20
- Bitcoin: US$37,583, down US$893
6.50am: Early Markets – Asia / Australia
Stocks in the Asia-Pacific region were higher on Friday as shares of newly listed JD Logistics opened at 46.05 Hong Kong dollars before surging to more than 18% from its issue price.
The Shanghai Composite in China gained 0.18% and Hong Kong’s Hang Seng index lifted 0.63%
In Japan, the Nikkei 225 surged 2.19% while South Korea’s Kospi rose 0.99%.
Shares in Australia jumped, with the S&P/ASX 200 trading 1.26% higher.
Proactive Australia news:
Piedmont Lithium Inc (ASX:PLL) (NASDAQ:PLL) (OTCMKTS:PDDTF) and Sayona Mining Ltd (ASX:SYA) (OTCMKTS:DMNXF) are advancing a joint bid to acquire North American Lithium (NAL) via subsidiary Sayona Québec (Piedmont 25% and Sayona 75%).
KneoMedia Ltd (ASX:KNM) (OTCMKTS:KNEOF) has secured the first 100 Seat Licences for its KneoWorld Career Technology Education (CTE) program for phase-1 deployment by the Albany School District in New York State.
Andromeda Metals Ltd (ASX:ADN) has signed an MoU with AEM Technologies Inc to explore a joint technical and commercial development under which the company can access AEM’s patented process to construct a facility to produce high purity alumina (HPA) using ADN kaolin.
Ora Banda Mining Ltd (ASX:OBM) (FRA:M6N) has received further broad, high-grade results in resource extension and infill diamond drilling at Golden Eagle deposit within the wider Davyhurst Gold Project in Western Australia, supporting pre-mining expectations and providing important information into remodelling the Southern Mining Area.
European Lithium Ltd (ASX:EUR) (FRA:PF8) (VIE:ELI) has received the all-clear to finalise a definitive feasibility study (DFS) for Wolfsberg Lithium Project in the heart of Europe following the settlement of a legal dispute.
Buru Energy Limited (ASX:BRU) (OTCMKTS:BRNGF) (FRA:BUD) has taken another step towards its 2021 exploration program at the Canning Basin Joint Venture with Origin Energy Ltd (ASX:ORG) (OTCMKTS:OGFGY) (FRA:ORL) with mobilisation of the Ensign 963 drilling rig underway.
Carnavale Resources Ltd (ASX:CAV) (FRA:YBB) has successfully completed its third aircore drilling program of 135 holes for 7,432 metres at the Kookynie Gold Project 60 kilometres south of Leonora in the Western Australian Goldfields.