Daily Stock Market News

FTSE 100 Live 01 February: House price inflation at 11.2% after January surge, Joules


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A 10 year mortgage deal from Lloyd’s Bank

LLOYD’S Bank, Britain’s biggest high street lender, is launching an intriguing mortgage offer.

Its 10-year fixed rate deal is, it claims, the cheapest on record. I personally would grab it if I could.

The 1.66% rate isn’t available to just everyone, you have to have a 40% deposit and there’s a £1000 fee. There is also an early repayment charge of 6% if you switch away in the first five years.

That’s tough, but perhaps not unreasonable.

Is this the start of a trend?

read more here

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FTSE higher in afternoon trade

The FTSE is consolidating gains in afternoon trade. The 100 is up 55 points with a little over an hour of the trading day left. It is being propelled higher by miners, with Antofagasta at the top with a gain of 3.8%. Fresnillo, Rio Tinto, Anglo and Glencore aren’t far behind.

Wall Street is off to a plodding start. The Nasdaq is down 0.4% and the S&P 500 is 0.2% lower, while the Dow is flat. Still, the dip is nothing compared to the volatility we saw regularly last month.

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Further signs of strength in the UK economy arrived today when figures showed manufacturing is enjoying a lengthy period of growth.

The IHS/Markit CIPS index for January was at 57.3, slightly down from December but the 20th month running of growth. Any number above 50 shows growth.

Duncan Brock at CIPS said the economy was buoyed by “confidence amongst the UK’s makers, higher job creation levels and output at the strongest rate since July 2021.”

Supply chain pressures are easing, but staff absenteeism remains high.

Brock added: “There was hope that tangible and sustainable improvements in business conditions were just on the horizon.”

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Spending on credit cards is rising as inflation puts pressure on incomes.

Consumer credit spending hit £800 million in December, the Bank of England said, up from the six month average of £700 million. £400 million went on credit cards, while the rest came in the form of personal loans, car finance and other types of borrowing.

Credit card spending is now growing at 2%, the central bank said, outpacing the growth of the broader consumer credit market, which stood at 1.4% in December.

It comes amid a widely publicized squeeze on household budgets as energy costs soars

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Price-conscious shoppers are switching to Aldi and Lidl as the cost-of-living crisis squeezes household budgets.

The German discounters were two of only three grocers to grow market share and sales over Christmas, according to new data from market research firm Kantar.

In contrast, most of the “Big Four” supermarkets suffered a drop in both sales and market share.

It comes as people increasingly shop around for the best prices as inflation soars. Kantar said grocery inflation was running at 3.8% — adding £180 to the average annual shopping bill.

Read the full story.

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UK house prices have enjoyed their strongest start to the year since 2005, according to new data.

Nationwide’s long-running house price index suggests average selling prices rose by 0.8% in January, meaning prices are now 11.2% above where they stood a year earlier. That was above forecasts of a 10.9% rise.

Robert Gardner, Nationwide‘s Chief Economist, said is was “the strongest pace since June last year, and the best start to the year for 17 years.”

The average house price now stands at £255,556, up from £254,822 in December.

Read the full story now.

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KPMG’s 571 UK partners saw their pay jump by 20% last year thanks to “possibly the hottest deal market ever”.

Average partner pay leapt to £688,000 as revenues and profits climbed. It puts executive pay £48,000 above pre-pandemic levels. Partners took an 11% pay cut in 2020 to protect jobs.

KPMG UK today announced what it called a “market leading” £100 million bonus pool for its 14,700 UK staff to share.

The payouts came on the back of bumper demand for KPMG’s advice on deals. Income at its deal advisory practice rose 31%, the biggest increase across the company’s four divisions.

Chief executive John Holt told the Standard: “We’ve gone through possibly the hottest deal market ever, particularly driven by private equity cash trying to find a home and overseas investors looking at British assets.”

Read the full story.

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Iron Barr

The Queen unveils a plaque during a visit to AG Barr’s factory in Cumbernauld in June (Andrew Milligan/PA)

/ PA Wire

Irn Bru, according to legend, is made in Scotland from girders.

Whatever the reinforcements, they have helped parent company AG Barr weather the worst of the pandemic.

Against a backdrop of rampant inflation in the cost of ingredients, packaging, transport and labour the London-listed drinks maker today published its third profits upgrade in six months.

Having “adjusted our pricing with customers where appropriate”, it now expects earnings to exceed November’s upgraded forecasts.

In the 12 months to the end of January sales are expected to be £267 million — up 17.5% compared with the previous year — beating the pre-pandemic period’s £255.7 million.

Chief executive Roger White said: “We have delivered an excellent financial performance against a volatile backdrop, whilst at the same time delivering on our strategic priorities.”

John Moore, senior investment manager at Brewin Dolphin, said: “Although AG Barr has traditionally tended to err on the side of caution, with around £66 million of net cash shareholders should expect to see rewards for their patience.”

Shares were up 10p to 505p.

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Soaring costs down Joules

Joules / Instagram

Lifestyle fashion brand Joules took a hammering today after a profits warning over supply chain struggles sent its shares down by as much as 40%.

The wellies and weatherproofs seller, said to be the Duchess of Cambridge’s “go-to” for stripes, endured a shocker of a festive season with footfall down 36% on 2019.

Although group revenues were up 31% in the nine weeks to January 30, higher labour and freight costs and lower full-price sales squeezed margins.

Gummed-up global shipping lanes led to delays in new stock and cancelled wholesale orders, compounding the January blues. It has lowered full-year profit guidance by a half to £5 million.

Joules also postponed publication of interim results to complete “going concern” analysis.

It intends to raise prices, cut ad spend and head office costs, liquidate old stock and exit some supply deals to get back on track in the second-half of 2022.

AJ Bell’s Russ Mould said: “Retailers need to be well oiled machines in the current climate and Joules has clearly messed up by not running everything as efficiently as possible.

“All retailers have suffered from supply chain issues but plenty of them have sailed through thanks to good forward planning, something which Joules seems to have lacked.

“As a premium lifestyle brand, it needs to uphold a reputation for superior quality and that includes the way the business is run as well as the products.

“After numerous setbacks management will have to get the business back on track soon otherwise CEO Nick Jones could soon find he is fighting for his job.

“The share price is down approximately 70% since he became the boss and investors won’t put up with that kind of performance for long.”

Peel Hunt cut its recommendation on the shares to hold from buy and lowered their price target to 110p from 275p.

Shares are down 47p, or 39.8%, to 71p.

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TSB bid: not for us says Virgin Money boss

VIRGIN Money today ruled itself out of bidding for TSB, the somewhat troubled rival that has had bids from Co-op Bank and reportedly Nationwide Building Society fail.

TSB, still dealing with the fall out from a computer collapse in 2018 that saw 1.9 million customers locked out of their accounts, has a strong parent in Spain’s Sabadell, but is still thought vulnerable to a bid.

A £1 billion offer from Co-op Bank was rejected last year. At the weekend reports said Nationwide had also come close to a bid.

Asked if Virgin was interested, CEO David Duffy replied: “We don’t want to do any large transactions. The future is actually not about scaling up, it is about digital. Bulging up is not the way to grow, in a post Covid digital world. It is about building customers through technology, not about buying someone else current accounts.”

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Read More: FTSE 100 Live 01 February: House price inflation at 11.2% after January surge, Joules

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