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London open: Stocks fall as recession fears continue to weigh
London stocks fell in early trade on Friday as worries about a global recession continued to dent sentiment.
At 0825 BST, the FTSE 100 was down 0.8% at 7,112.40.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “Fears rattling financial markets show little sign of subsiding, with investors spooked about signs of looming recessions, while inflation stays stubbornly high.
“Fresh falls on Wall Street marked a miserable milestone with the S&P 500 tumbling in the first half of the year by 20.6%, a fall not seen since 1970. The tech-heavy NASDAQ, which has been wracked by volatility, has plummeted by a third this year and is on track for the biggest ever yearly drop.
“There are concerns that, just like in the seventies era, demand and inflation won’t fall back easily, and that the Federal Reserve and other central banks will have to step on the accelerator of interest rate hikes to bring red hot prices under control. The risk is that could see economies slam into a brick wall of recession, with ripple effects around the world.”
On the macro front, investors were eyeing June manufacturing PMIs for the eurozone and UK, due at 0900 BST and 0930 BST, respectively.
Meanwhile, there wasn’t a whole lot going on in equity markets, but Abrdn and Jupiter Fund Management were both knocked lower by a rating downgrade at Citi. The bank cut its stance on both asset managers to ‘sell’.
“We see downside risks for almost all names, but see the biggest risk of disappointment at Abrdn and Jupiter,” Citi said in a note on the sector.
Elsewhere, Chemring dipped even as it said the UK’s Serious Fraud Office had closed its investigation into the activities of the Technology Solutions subsidiary and associated persons.
Oxford Biomedica gained as it signed a new three-year deal which would facilitate potential future manufacturing opportunities for the AstraZeneca Covid-19 vaccine.
Top 10 FTSE 100 Risers
Top 10 FTSE 100 Risers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Ocado Group Plc | +6.63% | +51.80 | 833.00 |
| 2 |  |
Easyjet Plc | +5.37% | +19.70 | 386.30 |
| 3 |  |
Tui Ag | +5.02% | +6.65 | 139.10 |
| 4 |  |
Carnival Plc | +4.55% | +28.20 | 647.80 |
| 5 |  |
Rolls-royce Holdings Plc | +4.30% | +3.57 | 86.52 |
| 6 |  |
Marks And Spencer Group Plc | +4.10% | +5.55 | 141.05 |
| 7 |  |
Melrose Industries Plc | +3.64% | +5.45 | 155.15 |
| 8 |  |
International Consolidated Airlines Group S.a. | +3.59% | +3.86 | 111.48 |
| 9 |  |
Lloyds Banking Group Plc | +2.73% | +1.16 | 43.47 |
| 10 |  |
Sainsbury (j) Plc | +2.65% | +5.40 | 209.40 |
Top 10 FTSE 100 Fallers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Bhp Group Limited | -2.31% | -53.00 | 2,244.00 |
| 2 |  |
Antofagasta Plc | -1.99% | -23.00 | 1,132.00 |
| 3 |  |
Fresnillo Plc | -1.98% | -15.20 | 751.60 |
| 4 |  |
Glencore Plc | -1.56% | -6.95 | 438.15 |
| 5 |  |
Anglo American Plc | -1.43% | -42.00 | 2,895.00 |
| 6 |  |
Bp Plc | -1.39% | -5.40 | 382.90 |
| 7 |  |
Smith & Nephew Plc | -1.26% | -14.50 | 1,133.00 |
| 8 |  |
Bunzl Plc | -0.85% | -23.00 | 2,696.00 |
| 9 |  |
United Utilities Group Plc | -0.83% | -8.50 | 1,011.50 |
| 10 |  |
Rio Tinto Plc | -0.79% | -39.00 | 4,877.50 |
US close: Major indices end session lower to wrap up brutal Q2
Wall Street stocks were firmly in the red at the close of trading on Thursday as the S&P 500 delivered its worst first first-half performance in more than half a century.
At the close, the Dow Jones Industrial Average was down 0.82% at 30,775.43, while the S&P 500 was 0.88% weaker at 3,785.38 and the Nasdaq Composite saw out the session 1.33% softer at 11,028.74.
The Dow closed 253.88 points lower on Thursday as market participants digested comments from Federal Reserve chairman Jerome Powell at the European Central Bank forum.
Thursday’s primary focus was last month’s core personal consumption expenditures index, the central bank’s preferred measure of inflation, which revealed personal incomes in the US had continued to grow steadily but showed spending had come in lower than expected.
According to the Department of Commerce, personal incomes increased at a month-on-month pace of 0.5%, in line with economists’ forecasts, while outlays were up by just 0.2% versus April (consensus: 0.4%). The headline PCE price deflator printed at up by 0.6% on the month and 6.3% year-on-year, while at the core level, PCE prices were up 0.3% on the month and 4.7% higher in annual terms.
Comments from Federal Reserve Bank of Cleveland president Loretta Mester were also drawing an amount of investor attention after saying she was in favour of a 75 basis point hike at the Fed’s upcoming July meeting, assuming current economic conditions persist, were also drawing an amount of investor attention.
Elsewhere on the macro front, US first-time jobless claims decreased slightly in the week ended 25 June, pointing to tight labour market conditions. Initial jobless claims fell by 2,000 to 231,750, according to the Labor Department, missing market expectations for a reading of 228,000. On a non-seasonally adjusted basis, claims rose by 1,060 week-on-week to 207,421, with notable increases seen in New Jersey, Massachusetts, and Kentucky.
Finally, manufacturing activity in the Chicago area slowed more sharply than anticipated in June, plumbing a near two-year low. Market News International‘s Chicago Purchasing Managers’ Index fell from a reading of 60.3 for May to 56.0 in June its lowest print since August 2020. Economists had forecast a dip to 58.8.
In the corporate space, Simply Good Foods said retail takeaway revenues increased 14.4% across the US in the thirteen weeks ended 29 May, while Constellation Brands reported Q1 earnings of $389.5m and profits of $2.06 per share.
Walgreens Boots Alliance reiterated full-year guidance as retail gains helped offset a drop in Covid-19 vaccine uptake, while Micron Technology issued fourth-quarter profit guidance that fell short of estimates.
Friday newspaper round-up: Macron, Bulb Energy, Thames Water
Customer service standards have fallen to record lows at energy companies, with suppliers Utilita and Ovo Energy among the worst offenders, according to a new report. Customers have had to wait longer for their calls to be answered and have regularly been unable to get hold of their supplier, research by Citizens Advice has found. – Guardian
Evidence of the negative impact of Brexit on the UK’s trade with the European Union is starting to emerge with EU data showing that exports to the bloc declined by nearly 14% in 2021 compared with 2020, a senior official in Brussels has said. Maroš Šefčovič, the European Commission vice-president and Brexit negotiator, said that even with the impact of the pandemic being taken into account, the increase in red tape since the transition period ended in January 2021 has taken its toll on trade in goods and services with the UK. – Guardian
Emmanuel Macron’s grand bargain with Germany has unravelled. He no longer has the political credibility to rein in France’s chronic fiscal deficits or to stop the national debt ratcheting further into the danger zone. Five years ago he swept into power as the reformist Wunderkind, touting his book Revolution and vowing to turn France into Europe’s start-up nation. It looked as if a French leader might finally take a chainsaw to the 3,000-page code de travail (labour law) and a thicket of 360 separate taxes dating back to feudalism. – Telegraph
The chief executive of Bulb Energy is to stand down from the collapsed energy supplier at the end of the month. The company said last night: “Bulb’s chief executive and co-founder, Hayden Wood, is stepping back from the business. We wish him all the best for the future.” Wood, 39, will not be replaced and the role will be split. – The Times
Thames Water is tapping shareholders for up to £1.5 billion as it seeks to fix problems that have led to rising complaints, leaks and fines by the regulator over illegal dumping of sewage. Britain’s biggest water utility, which serves almost a quarter of the population, said that it would raise £500 million in new equity from shareholders this financial year and was talking to investors about a further £1 billion. – The Times
