Wall Street follows Europe’s record highs as UK economy escapes recession

Live24 updates

• Fri, 10 May 2024 at 9:05 am GMT-6

  Why trends are so intoxicating for investors

  Shares of Roblox plunged yesterday after the gaming platform company gave disappointing bookings guidance.

  Roblox (RBLX) only came public in 2021, and its stock has fallen from a high above $130 a share in November of that year to around $30 now. That’s as its annual sales growth rate has moderated into the mid-twenties percentage range.

  It feels like the jury’s still out on whether the Roblox craze ends up being a flash in the pan or a lasting trend. It’s tempting as an investor to buy what you know, as Warren Buffett has famously said. And when it comes to trends that we interact with, see, and judge on a regular basis, we develop opinions.

  But what if the trend you know ends up being just a fad?

  Read the full article here

• Fri, 10 May 2024 at 8:58 am GMT-6

  Morrisons workers to go on strike

  Workers at Morrisons are set to go on strike in a dispute over pensions, it has been revealed.

  Unite the Union said almost 1,000 of its members working in Cheshire and Wakefield as warehouse stock controllers, canteen staff and administrators voted to take industrial action.

  They will strike from 23 May to 26 May and again from 13 June to 16 June.

  Unite general secretary Sharon Graham said:

  “Unite is focused on our members’ jobs, pay and conditions and these unmerited changes to workers’ pensions will leave our members worse off every month.”

  Changes to pension contributions could leave workers £500 worse off.

• Fri, 10 May 2024 at 8:36 am GMT-6

  Best savings accounts that offer above inflation rates

  UK households are on the lookout for every little way to make their money go further amid the cost of living crisis, and savings accounts might help.

  After years of low rates, high-yield savings accounts are having a moment as the Bank of England has kept interest rates at a 16-year high of 5.25%. While homeowners face higher mortgages, there is a silver lining in higher borrowing costs as consumers can now find UK savings accounts that offer more than inflation.

  The UK rate of inflation came in at 3.2% in March, the lowest since September 2021, according to figures from the Office for National Statistics (ONS).

  Savers should make sure they shop around to find the best deals and check what rate they are on – as they could still be sitting on a product that does not beat inflation.

  The main factor you should be aware of when choosing a savings account is the difference between easy access and fixed term.

  In a nutshell, easy access accounts allow you to access your money when you need it. Fixed term, as the name implies, are accounts where you can’t access your cash for the duration of the deal. They usually offer better rates but you must be comfortable with the idea of not touching your savings for a long period of time, usually between one to five years.

  What are the best high interest fixed rate accounts?

• Fri, 10 May 2024 at 8:12 am GMT-6

  Jaguar Land Rover posts highest ever yearly sales

  

  Jaguar Land Rover has posted its highest ever yearly sales and its biggest profit in almost a decade.

  The luxury carmaker reported £29bn revenues in the year to March, over a quarter higher than the previous year, thanks to record sales of its Range Rover vehicles.

  Around 133,000 vehicles had been ordered at the end of the financial year, three quarters of which were for Range Rover, Range Rover Sport and Defender models.

  Pre-tax profit came in at £2.2bn, the highest amount since 2015.

• Fri, 10 May 2024 at 7:49 am GMT-6

  Huw Pill: Clear signal of rate cut from downward inflation path

  The Bank of England’s chief economist Huw Pill has said Threadneedle Street has sent a “relatively clear signal” on by recent falls in inflation.

  BOE’S PILL: MPC HAS SENT A RELATIVELY CLEAR SIGNAL THAT THE BANK RATE CAN BE CUT WHEN THERE IS SUFFICIENT EVIDENCE OF A DOWNWARD PATH IN PERSISTENT COMPONENTS OF INFLATION.

  — FinancialJuice (@financialjuice) May 10, 2024

• Fri, 10 May 2024 at 7:42 am GMT-6

  UK economy set to grow 0.6% in Q2

  Looks like the UK economy momentum will keep on going next quarter…

  The UK economy is likely to keep growing during the current quarter, according to the National Institute of Economic and Social Research (NIESR).

  They have predicted that GDP will increase 0.6% in the April to June period.

  NIESR said:

  “The fact that the UK’s GDP growth transitioned into positive territory after experiencing the shallow recession in the second half of 2023 is encouraging.

  “However, the UK economy has largely flatlined following the initial stages of post-pandemic recovery. To escape the low-growth trend into a new and sustained era of high output growth requires structural changes and public investment.

  “We expect that monthly GDP will continue its momentum in April, growing by 0.1 per cent relative to March, driven by growth mainly in services and production, particularly agriculture.

  “Indeed, the S&P Global/CIPS UK services PMI reported an optimistic balance of 55.0 in April up from 53.1 in March. In line with this positive sentiment, we now forecast GDP to grow by 0.6 per cent in the second quarter of 2024, mainly driven by services sectors.”

• Fri, 10 May 2024 at 6:11 am GMT-6

  Anglo American rises after Rio Tinto mulls offer

  Shares in the mining sector were higher on Friday amid reports that Rio Tinto (RIO.L) had considered an offer for rival British miner Anglo American (AAL.L), which is now BHP’s (BHP.L) £31bn takeover target.

  Rio “management had not ruled out making a play for part or all of the mining group and continued to study the day-to-day situation”, the Australian Financial Review reported.

  Anglo has turned down BHP’s proposal, saying it was opportunistic and significantly undervalued the British company. Under the UK’s takeover rules, BHP has until May 22 to make a formal offer.

  “Shares in Anglo American are up on a report that Rio Tinto also considered a bid following BHP’s rejected offer. M&A speculation is helping to keep Anglo shares supported at the moment,” Victoria Scholar, head of investment at Interactive Investor, said.

  BHP and Rio have a close working relationship at Escondida and Resolution Copper. One option for Rio is to informally assist BHP’s bid for Anglo by acquiring the assets that BHP does not want, such as Anglo’s diamond business, AFR wrote.

  Glencore is also studying options for a possible approach for Anglo, Reuters reported earlier in the month, a move that could spark a bidding war.

  See what other tickers are trending here

• Fri, 10 May 2024 at 5:50 am GMT-6

  Oil rises on renewed hopes for US rate cuts

  

  Oil prices rose on Friday, after two days of gains, as US jobs data supported the case for Federal Reserve rate cuts this year.

  Brent crude (BZ=F) the international benchmark, rose 0.4% to push above $84 a barrel after a two-day climb that added about 1%. This was after having exceeded the 100-day moving average. US-produced West Texas Intermediate neared $80.

  The Organisation of Petroleum Exporting Countries and its allies (OPEC+) are due to meet early next month to decide on output in the second half.

  “With crude oil prices now trading over $10 a barrel off their highs, we could not rule out some speculative buying,” Citigroup Inc. analysts Max Layton and Francesco Martoccia wrote in a note. However, “the right strategy in this balance between geopolitical risks and loosening fundamentals is to sell any rally.”

• Fri, 10 May 2024 at 5:22 am GMT-6

  TSM April revenue rises 60%

  Taiwan Semiconductor Manufacturing Company’s (TSM) April revenue jumped nearly 60% year-on-year, as the firm rides a wave of sustained demand for the advanced semiconductors used in artificial intelligence (AI) hardware.

  The world’s largest contract chipmaker said consolidated revenues for April were approximately TWD236.02bn (£5.7bn/$7.2bn), an increase of 59.6% from April 2023. This compares with a 34.3% on-year jump in March 2024.

  The company is Nvidia’s (NVDA) sole manufacturer for the most advanced training chips. TSMC also fabricates semiconductors for Apple (AAPL).

  Last month, TSMC announced its newest semiconductor process, advanced packaging, and other technologies for powering the next generation of AI innovations.

  “We are entering an AI-empowered world, where artificial intelligence not only runs in data centres, but PCs, mobile devices, automobiles and even the internet of things,” said CEO C.C. Wei.

• Fri, 10 May 2024 at 5:03 am GMT-6

  Rightmove: UK property sector will improve this year

  Rightmove has said that the UK property market will improve this year, as customer numbers rise compared to 2023.

  The UK’s largest property portal expects the number of customers to rise 2% year-on-year, compared to a previous forecast of a “slight decrease”.

  It said that while ongoing high mortgage rates and long completion times on transactions continue to weigh on the market, customers are “now increasingly looking to transact”.

  Sales agreed between January and April came in 17% higher than the same period last year, with 1.1 million sales forecast to take place over this year.

  The company said its house price index indicates annual house price growth of 1.7%, the highest for 12 months.

• Fri, 10 May 2024 at 4:46 am GMT-6

  Homes with investment potential

  

  There’s a lot to consider when investing in bricks and mortar – whether you’re after a steady income stream, long-term growth or a quick profit and if you plan to live in the property while it pays its way.

  Then you’ll need to research locations, rental demand and yields and crunch the numbers to ensure that income exceeds expenses by a comfortable margin. These properties could present some great investment opportunities.

  Find out more here

• Fri, 10 May 2024 at 4:28 am GMT-6

  Bets on BoE June rate cut narrows

  Money markets have lowered the odds of the Bank of England cutting interest rates next month.

  Bets on a June rate cut now stands at 48%, while there is a 52% possibility that Threadneedle Street holds rates at 5.25%.

  Yesterday, the decision stood at 55% chance of a cut in June.

  It comes as the BoE left rates on hold yesterday, with two policymakers voting for a cut.

  Derek Halpenny, head of research for global markets at financial group Mitsubishi UFJ, said:

  “Most of the key guidance comments from Bailey and Broadbent in the press conference and again from Bailey in a Bloomberg TV interview after the press conference were clear in signalling rate cuts are coming.

  “Mostly notable was Bailey’s Comment that the monetary stance would “likely” need to be made less restrictive and “possibly more so than currently priced into market rates”.

• Fri, 10 May 2024 at 4:10 am GMT-6

  Lower treasury yields see gold prices surge

  In early Friday trading, gold prices surged by close to 1%, buoyed by lower treasury yields and a weakened dollar.

  Prices are set to conclude the week with gains following two consecutive weekly losses.

  Ricardo Evangelista, senior analyst at ActivTrades, said:

  “These upward movements can be largely attributed to evolving expectations regarding the Federal Reserve’s future actions, with analysts now leaning towards at least two rate cuts in 2024.”

  “The latest impetus for this shift occurred on Thursday, when US jobless claims surpassed expectations, amplifying sentiments stirred by last week’s disappointing non-farm payrolls report and further exposing vulnerabilities in the American labour market.”

  “Against this backdrop, the Federal Reserve is encountering diminishing leeway to maintain higher rates for an extended period, with this changing dynamic auguring well for the value of the non-yielding precious metal.”

• Fri, 10 May 2024 at 3:56 am GMT-6

  Lidl announces third pay rise in 12 months

  Lidl has announced that it is raising pay for the third time in a year. The German discounter is increasing pay for hourly-paid colleagues to a minimum of £12.40 across the country, up from £12.

  In London, colleagues will see entry level pay rise to £13.65, up from £13.55. The new base rates equal the best hourly pay in the sector and will ensure that the discounter continues to reward colleagues with industry-leading pay.

  The latest move represents an investment of over £2.5m, following a £37m investment in March 2024, as well as an £8m raise in September 2023, bringing the total investment in pay over the past 12 months to nearly £50m.

  Ryan McDonnell, CEO at Lidl GB, said:

  “As we continue to expand, we are welcoming more customers and attracting more colleagues into the business every day. It’s absolutely right, therefore, that we continue to offer industry-leading pay”.

• Fri, 10 May 2024 at 3:41 am GMT-6

  British Airways owner hails strong quarter

  

  International Consolidated Airlines Group (IAG.L), owner of airlines British Airways and Aer Lingus, has said its earnings have soared in recent months thanks to higher sales, lower fuel costs and stronger demand.

  It reported an operating profit for the first three months of the year of €68m (£58.5m), up from €9m last year.

  It was boosted by increased demand over the Easter holiday and added that it was seeing strong summer bookings.

  “Our transformation initiatives and increased demand, including over the Easter holidays, have delivered another very good set of results with improvement to both revenue and operating profit,” Luis Gallego, chief executive, said in a statement.

  He added that IAG’s exposure to the Middle East was very small so it hadn’t seen a big impact from the conflict there.

  Shares were 1.1% higher on the back of the news.

• Fri, 10 May 2024 at 3:29 am GMT-6

  Pound rises as UK economy grows

  The pound (GBPUSD=X) is currently up against the dollar as the UK economy exited recession at the start of this year.

  Sterling has risen 0.1% versus the US greenback to $1.2531, even after Andrew Bailey, governor of the Bank of England (BoE) pointed to interest rate cuts later this year.

  The pound was also up 0.1% against the euro, trading around €1.162.

• Fri, 10 May 2024 at 3:14 am GMT-6

  FTSE hits fresh high

  The FTSE has reached another all-time high in London today, surging passed the 8400 point mark for the first time, hitting a new intraday high of 8431 points.

  London’s benchmark index has been on a strong rally since mid-April, and is on track for its third weekly rise in a row. It has gained 9.2% so far this year.

  Susannah Streeter, head of money and markets at Hargreaves Lansdown, said:

  “Confidence breeds more optimism, and with the economy showing signs of repairing and the FTSE 100 rallying higher, the glass half full sentiment is settling in. The blue-chip index has powered higher in early trade and set fresh records, after a sheen of positivity has descended on the UK.”

  Meanwhile, Victoria Scholar, head of investment at Interactive Investor, said:

  “After the FTSE 100 hit a record high for the fourth straight session on Thursday, the UK index has opened higher yet again and is potentially on track to close at another all-time high.

• Fri, 10 May 2024 at 2:55 am GMT-6

  UK economy growth better than G7 rivals

  The British economy has grown faster than its G7 rivals at the start of this year. Compared to the 0.6% growth recorded in January-March, here is how the others performed:

  • The US rose 0.4%

  • Germany rose 0.2%

  • France rose 0.2%

  • Italy rose 0.3%

  Canada is estimated to have also grown by 0.6% and Japan is predicted to have grown by 0.2%.

• Fri, 10 May 2024 at 2:41 am GMT-6

  UK construction sector remains weak

  

  Construction output in Britain fell by 0.9% in January to March period, for the second quarter in a row. This means construction is in recession.

  Output is 0.7% lower than the same quarter a year ago, the ONS said on Friday.

  The fall reflects a decline in new work of 1.8% driven by private commercial new work, which fell by 5.3%.

  However, repair and maintenance increased 0.3% due to housing associations re-directing their budgets towards repairs and upgrading “to deal with problems such as damp arising from tenants using less heating because of the higher cost of living”.

  Wet weather also dampened construction activity, as storms kept workers off building sites.

  Nicholas Hyett, investment manager at Wealth Club, said:

  “Construction remains the one area of weakness, particularly in the commercial sector. That’s no surprise.

  “Real estate is particularly exposed to the effect of higher interest rates, and the upheaval of the pandemic is still rocking the office and retail sector – with increased home working and online shopping permanently changing demand. That’s not a trend that’s unique to the UK.”

• Fri, 10 May 2024 at 2:28 am GMT-6

  Chancellor and PM on GDP figures

  Here’s what Jeremy Hunt and Rishi Sunak had to say on the back of the news that the UK economy grew by 0.6% in the first quarter of this year.

  The chancellor said:

  “There is no doubt it has been a difficult few years, but today’s growth figures are proof that the economy is returning to full health for the first time since the pandemic.

  “We’re growing this year and have the best outlook among European G7 countries over the next six years, with wages growing faster than inflation, energy prices falling and tax cuts worth £900 to the average worker hitting bank accounts.”

  The prime minister said:

  The economy has turned a corner. Today’s news proves that. We know things are still tough for many people, but the plan is working, and we must stick to it.

  After a tough period with the pandemic and the energy shock, today’s figures are proof that the economy is returning to full health.

  And more important than that, the IMF say our long term prospects are the strongest of any major European economy over the coming years. https://t.co/4FxeNBo40u

  — Jeremy Hunt (@Jeremy_Hunt) May 10, 2024