And lastly, a late flurry of motion has pushed the FTSE 100 as much as its highest closing degree in practically every week.
The index has closed up 80 factors, or 1.3%, at 6,176, with silver miner Fresnillo (+5.6%), chemical compounds group Johnson Matthey (+4.3%) and hospitality group Intercontinental Hotels (+3%) among the many risers.
Equities throughout Europe have additionally posted good points following the rally in Asia-Pacific markets, with the Stoxx 600 ending 1.5% larger.
The sight of the Nasdaq hitting one more file excessive right this moment reassured traders that the rally nonetheless has legs – even when it seems to be at odds with fundamentals (yes you, Tesla).
Optimism that a Covid-19 vaccine will be commercially available additionally lifted shares, as did better-than-expected outcomes from Pepsico (lifted by demand for lockdown nibbles).
British safety group G4S additionally cheered traders by hiking its profit forecasts, after which hit its workforce with plans to chop over 1,000 jobs:
And they weren’t alone….
There had been different reminders that the UK economic system has been hit laborious — with retail footfall still low, and a few households struggling to cope with the loss of income after being furloughed or laid off.
In one other blow to the UK labour market, Halfords has confirmed plans to shut 60 shops and garages by April.
My colleague Sarah Butler explains:
The cycle and automobile elements retailer mentioned it hoped to maneuver workers to different branches, however the closures might result in lots of of job losses. Halfords has already closed its Cycle Republic chain and 5 Halfords shops and garages.
“Covid-19 has materially changed the retail outlook for the coming months and has overshadowed Brexit as the emerging risk,” the corporate mentioned in an announcement.
The closures are the newest blow to UK excessive streets and retail parks after a variety of companies revealed plans within the final two weeks to shut shops. Boots, John Lewis, furnishings chain Harveys and shirtmaker TM Lewin are amongst these to have introduced closures in latest weeks.
Donald Trump’s financial adviser, Larry Kudlow, has been sounding optimistic on Fox News right this moment.
Kudlow predicted that the US economic system might develop by at the very least 20% within the second half of this yr, which means a V-shaped restoration could be intact.
Wall Street is getting near a five-week excessive:
Most shares on the Dow are up right this moment, led by healthcare shares and tech companies.
Pharmaceutical agency Pfizer (+4.7%) is the highest riser, on hopes for its Covid-19 vaccine. It’s adopted by Apple (+3.6%), and United Health (+2.7%).
Retail chain Home Depot (+2.2%) and building equipment agency Caterpillar (+2.3%) are additionally being lifted by optimism concerning the financial restoration.
UK tech firm Sage shares the Bank of England’s considerations concerning the jobs market.
It has printed new analysis right this moment, exhibiting that 62% of small and medium sized enterprises (SMEs) are both planning to make redundancies following the Covid-19 pandemic, or have already executed so.
This equates to 1.4m jobs in danger, warns Sage. Its survey (of two,000 administrators and enterprise homeowners) additionally discovered that 15% of companies reckon they received’t survive a second spike in infections.
Sage argues that the federal government’s Summer Statement had little for the tech sector, however was good for “bricks and burgers” (because of VAT cuts on hospitality, and a stamp obligation vacation). They need extra assist for tech spending – resembling digital grants, or letting companies declare 200% tax reduction on know-how funding.
Here’s one other instance of how tech inventory valuations have soared, whilst gross sales have been hit by the coronavirus lockdown.
Shares in electrical automobile firm Tesla are completely hovering once more right this moment.
Tesla has jumped virtually 11% in early buying and selling to $1,711 per share, a brand new file excessive.
That lifts its market capitalisation over $300bn for the primary time, cementing its place as probably the most invaluable automobile maker on the planet.
Traders seem like placing loads of religion in Tesla’s capability to dominate the automobile business in future years, as Elon Musk has lengthy promised. This valuation doesn’t make a lot sense on conventional earnings metrics #understatement.
Over in New York, shares are rallying at first of the brand new week, sending the Nasdaq to a recent file excessive.
Optimism is constructing that this week’s incomes season will present that an financial restoration is underway. Pepsico’s forecast-beating results have brightened the temper.
Wall Street can be shrugging off the newest grim Covid-19 information – with international circumstances at file ranges, and Florida alone reporting 15,000 new cases yesterday.
Instead, hopes of a vaccine-breakthrough are lifting shares, with Pfizer and BioNTech reporting that two of their experimental coronavirus vaccines have obtained ‘fast track’ designation from the U.S. well being company.
Here’s the small print:
- Dow Jones industrial common: up 222 factors or 0.85% at 26,298
- S&P 500: up 24 factors or 0.7% at 3,209
- Nasdaq: up 149 factors or 1.4% at 10,766
This means the Nasdaq is now up roughly 20% this yr, because the FAANG shares have steadily outperformed the broader market [the Dow is still down 8%]
It’s a bit early, however we should always elevate a toast to Diageo for creating the world’s first paper-based spirits bottle that’s 100% plastic-free.
It might sound a bit fragile, however my colleague Rebecca Smithers studies that it ought to maintain your whisky safely, and be higher for the setting:
The firm mentioned it was aiming to launch the bottle early subsequent yr with its Johnnie Walker whisky brand in a single market earlier than rolling it out worldwide.
The bottle is constituted of sustainably sourced pulp, complies with worldwide food and drinks security requirements and is absolutely recyclable. The contents are protected by a liner, manufactured from resin somewhat than plastic, which holds the liquid however disintegrates when completed. The cap will likely be manufactured from aluminium.
Just in: the governor of the Bank of England has predicted that the UK economic system has began to get well from its Covid-19 stoop.
Andrew Bailey informed a web based viewers of faculty pupils that the turnaround has begun, but in addition warned that unemployment is a large fear.
Bailey mentioned (through Reuters)
We are seeing the economic system come again now considerably, as a result of clearly the restrictions are starting to be lifted.
But there’s a protracted strategy to go, we’re very anxious about jobs, as are lots of people.”
Bailey’s feedback are well timed – tomorrow morning, we get the newest UK GDP information for May. It might present that the economic system began to develop once more, after shrinking by over 20% in April throughout the lockdown.
Bailey was additionally endearingly modest when the Speakers for Schools discuss turned to his personal profession:
Pepsico’s CEO Ramon Laguarta says the corporate benefited from demand for snacks to assist folks by way of the lockdown.
Speaking after posting that 3% drop in revenues last quarter, he says:
“We gained market share in salty, savory and macro-snacks in the quarter.”
Today’s results also show a 23% surge in revenues at Quaker Foods, implying that folks have been doing much more oat-based baking! That made up for a 7% drop in beverage gross sales within the US.
William Ryder, fairness analyst at Hargreaves Lansdown, says:
“Pepsi’s properly diversified enterprise means the influence of COVID-19 has not been felt evenly throughout the corporate. While the pandemic appears to have been a web price to the group, divisions like Quaker Foods have executed properly – maybe benefiting from extra dwelling cooking and well being acutely aware clients.
While the pandemic has been disruptive and raised prices within the brief time period, Pepsi is properly positioned to bounce again – the group’s enviable secure of manufacturers needs to be sufficient to see them by way of. The market has recognised these strengths although, and the shares have virtually recovered to their degree at first of the yr.”