FTSE 100 Live: Markets panicked as US rate hike looms, Next boosts earnings guidance

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Today’s ondon strong start to trading in 2022 has stalled as investors reacted to the prospect of higher US interest rates around the time of March.

Wall Street markets fell sharply and the FTSE 100 index fell 1% after the release of the meeting minutes from the Federal Reserve that indicated that rates could rise “relatively soon”.

The sell-off overshadowed another strong trading performance from Next, as the fashion chain upgraded its earnings guidance on the back of strong Christmas trading.

Show the latest updates 1641478079 in the US, as US unemployment numbers exceed expectations

The latest US unemployment numbers were released in the last hour and came above expectations. There were 207,000 initial benefit claims in the four weeks to December 31, up from the 200,000 that economists had expected.

“Although this is seen as a slight negative, it is worth noting that it remains at historically low levels and continues to show significant strength in the US labor market,” says Dan Boardman-Weston, chief information officer at BRI Wealth Management. This is more impetus for the Fed to raise interest rates faster or sooner than the market had expected.

“Unless Omicron’s rapid spread begins to put the economy under significant stress – which markets do not expect – the stage appears set for continued economic growth and for monetary policy to become tighter in the coming months.”

Wall Street opens in about 20 minutes, with futures pointing to a mixed open — the tech-heavy Nasdaq is being asked to drop another half a percent at the open, while the Dow should rise 0.2%.

On this side of the pond, the moderate FTSE fight faded at lunchtime, with bluechip down about 0.7%.

EXEC Barclays EXEC Joins Startup Bank

Rand spent 12 years in the British Army before moving to banking in 2000. He began his career at JPMorgan before moving to Barclays, where he worked for 12 years. Rand left the bank in late 2020.

He will take over as CEO on Monument from Mintoo Bhandari, a former managing director at US investment giant Apollo who founded the lender in 2018.

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Pod Point, which listed in London in November, said it was still enjoying “strong trading” and full-year results were on track with expectations.

The company works with companies like Tesco and Barratt Homes to install charging infrastructure on public spaces and private properties.

Stock improved 8.7p, or 3.5%, to 255.5p per update.

Perhaps surprisingly, CEO Eric Fairburn said it was “just the right time” for the government to cut electric vehicle grants, as new figures showed a quarter of cars purchased at the end of last year were battery-powered.

The Society of Automobile Manufacturers and Traders (SMMT) said 2021 was the most successful year in history for electric vehicles, with plug-ins accounting for 18.5% of all new cars purchased last year. Momentum is accelerating, with battery-powered cars taking 25.5% of the market by December.

“What is the support is to encourage the activity before it becomes commercially viable,” Fairburn told The Standard. “I think electric cars are on their feet now.”

Technology sales in London are falling

Having fallen as much as 1% earlier in the session, the FTSE 100 managed to regain some ground.

bluechip is down about 44 points, or 0.6%, at 7,473 this lunchtime. Tech companies still held the index position, with industrial design software company Aviva dropping the most.

Tech stocks were sold off around the world after fresh minutes from the Federal Reserve overnight suggesting that rates may rise sooner than expected in the US. When America sneezes, the world catches a cold, and there are expectations that other central banks can now follow suit.

Higher rates are bad for high-growth stocks like technology but good for banks. And unlike the US markets, which have a large number of technology companies, the London stock market is more dependent on lenders than on technology.

Asia-focused Standard Chartered currently tops the FTSE board with a gain of 3.6%. And units Lloyds, HSBC, NatWest and Barclays are not far behind. In the land of ads, WPP is up just over 1% after upgrading to “buying” from Shore Capital.

Elsewhere, the top stories at this lunchtime are:

Sale puts the luggage box in Dr. Martins / Dr. Martins

Dr. Martins’ stock price suffered its biggest drop in a single day after previous owner Permira, which went public with the shoemaker 12 months ago, dumped a 6.5% stake at a discount.

The UK-based private equity group sold 65 million shares at 395 pence, less than yesterday’s closing price of 421 pence, sending the stock down 13% to 366 pence.

Permira raised £257m from the sale, which was offered by Luxembourg-based fund IngreLux, in a position to institutional investors under the direction of Goldman Sachs.

That’s not much less than the £300m she paid to take control of the company in 2013.

It still holds 36% of Dr. Martin’s issued capital.

The popular shoe maker enjoyed a bumper IPO last January as shares jumped 16% on their first market debut.

It posted a 46% jump in pre-tax profit to £61m in the six months to September 30, but wnedshippingdel ays and struggling supply chains could affect sales in the following financial year.

A growing year for Bitcoin

A new report shows that cryptocurrency trading volumes rose last year to rival some of the major currencies.

While last year was a cryptocurrency hack, 2022 was even more difficult. Bitcoin is in a bear market and fell another 6.8% overnight to $46,163, its lowest level since September.

1641464612 Women’s clothing company Sosandar roasts a jump in sales

Women’s clothing retailer Sosandar recorded sales growth

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Online women’s clothing retailer Sosandar has encouraged the festive trade, aided by “very strong” sales of party wear before Christmas.

The AIM-listed company added that trading in early January was also strong, with increased demand for active and casual wear since December 25.

Total revenue in the three months to December 31 was £8.9 million, up from £4 million and representing a record quarter.

1641461136 M&C Saatchi faces £250m bid from Vice Chairman

M&C Saatchi, the storied Soho advertising company with close links to the Conservative Party, is facing a £250m takeover bid from its vice-chairman.

Vin Murria, a software entrepreneur who owns nearly 10% of the business, is preparing to make a bid that will take the company off the stock market.

A story in the Daily Telegraph this morning mentioned her intentions. Today, M&C was forced to tell investors it had received an “initial approach from AdvancedAdvT Limited, a vehicle associated with Vin Murria, Corporate Director”.

Investors got the Fed meeting minutes wrong

A rise in US interest rate expectations weighed on currency markets, with the British pound reversing some of its recent recovery to stand down 0.4% at just over 1.35 against the US dollar.

The pressure extended to Asian markets, with the Nikkei 225 index in Tokyo closing down nearly 3%.

Mark Heffel, chief investment officer at UBS Global Wealth Management, said the minutes surprised investors, but the decline in shares appeared to be exaggerated.

He told clients: “Fed policy normalization should not affect corporate earnings growth expectations, which remain on solid footing due to strong consumer spending, rising wages and easy access to capital.

“Keep in mind that the Fed has gotten progressively more hawkish since last summer and that stock markets have done well.”

Growth firms have been the main beneficiaries of lower real and nominal interest rates, driving valuations to high levels.

Hefele added: “With the Fed beginning to normalize policy, it makes sense for these stocks to face the strongest headwinds. In the US stock market, we continue to prefer value stocks over developing stocks.”

The company behind the UK gas project is offering itself for sale

Buyers are buzzing about UK gas assets after higher global prices re-focused on domestic supplies.

AIM-listed Angus Energy said it had recently received a “chain of approaches” from interested buyers for its 51% stake in the Saltfleetby gas field in Lincolnshire and a single offer to buy out the entire business. As a result, Angus began a formal sale, with CEO George Lucan saying it was in the “best interests of investors” because public markets “do not give much value to hydrocarbon reserves in general.”

Meanwhile, Angus said it was continuing its plans to resume gas production at the Saltflitpe site, which was first discovered in the 1990s.

Shares jumped 14.5% to 0.88 pence.

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