- FTSE 100 slides 3o points
- US indices turn lower
- Worldwide coronavirus deaths reach 1 million
5 pm: FTSE 100 ends a hair lower
The UK's flagship benchmark index finished Tuesday 30 points, 0.5%, lower at 5,897.5. The FTSE 250 lost nearly 200 points, 1.1%, to 17,173.7.
Driving the losses could be mounting coronavirus concerns, as the pandemic recently reached a tragic milestone.
"Stocks are in the red due to health concerns," CMC Markets UK David Madden wrote Tuesday. "The worldwide death toll of the pandemic has topped 1 million and that headlined has been at the forefront of traders minds today. When you compare the major gains achieved yesterday with the relatively small losses registered today, it indicates that traders are not overly worried about the Covid-19 crisis."
HSBC Holdings plc (LON:HSBA) (NYSE:HSBC) lost some ground, perhaps due to some profit-taking after strong gains on Monday. The financial giant dropped 3.3% to £298.50 in London and 3.9% in New York to $19.18.
"Like their European counterparts, US stocks have handed back some of yesterdays gains," Madden noted. "It has been a quiet day in terms of corporate earnings and volatility is likely to remain low in the session as the first presidential debate between Mr. Trump and Mr. Biden will take place after the market is closed. Opinion polls have pointed favourably to Joe Biden but it is hard to dislodge an incumbent. The allegations that Mr. Trump paid almost zero taxes in the years ahead of election victory in 2016 is likely to be brought up by Mr Biden."
Its been a largely uneventful day in London with traders reluctant to commit ahead of tonights US presidential debate.
The FTSE 100 spent the day in the red and in fact losses started to lengthen towards the end of the day, with the index down 31 points (0.5%) at 5,897.
A majority of Americans say they want to know what is in Trumps tax returns.
Now they do.https://t.co/rzO6rYchAD
— FiveThirtyEight (@FiveThirtyEight) September 29, 2020
US indices have traded in the red since the opening so a similar hesitancy is evident over there. The US advance goods trade deficit was a bit higher than expected in August, widening to US$82.9bn from US$80.1bn the previous month. The consensus forecast was for a deficit of US$81.8bn. “Exports rose 2.8%, but this increase was much smaller than the 12%-plus jump in June and July, and it was more than offset by a broad-based 3.1% increase in imports. The deficit would have risen further if not for a favourable $5.2bn swing in net trade in industrial supplies, which includes oil,” observed Ian Shepherdson, the chief economist at Pantheon Macroeconomics. Excluding industrial supplies, the deficit rose to a record US$84.1bn from US$76.1bn. “Before Covid, the trend was running at about US$69bn per month, and declining slowly. The Covid shock crushed both exports and imports, and both remain below their prior levels, but the rebound in imports has been bigger,” Shepherdson said.
US indices have traded in the red since the opening so a similar hesitancy is evident over there.
The US advance goods trade deficit was a bit higher than expected in August, widening to US$82.9bn from US$80.1bn the previous month. The consensus forecast was for a deficit of US$81.8bn.
“Exports rose 2.8%, but this increase was much smaller than the 12%-plus jump in June and July, and it was more than offset by a broad-based 3.1% increase in imports. The deficit would have risen further if not for a favourable $5.2bn swing in net trade in industrial supplies, which includes oil,” observed Ian Shepherdson, the chief economist at Pantheon Macroeconomics.
Excluding industrial supplies, the deficit rose to a record US$84.1bn from US$76.1bn.
“Before COVID, the trend was running at about US$69bn per month, and declining slowly. The COVID shock crushed both exports and imports, and both remain below their prior levels, but the rebound in imports has been bigger,” Shepherdson said.
3.30pm: Proactive North America headlines:
Melkior Resources Inc (CVE:MKR) unveils landmark C$110M option/joint venture deal with major Kirkland Lake Gold for Timmins project
Steppe Gold Ltd (TSE:STGO) secures initial debt funding of around US$10.5M for its expansion project at ATO mine
Benchmark Metals Inc (CVE:BNCH) (OTCQB:BNCHF) assembles heavy-weight development team as it advances Lawyers project towards PEA
Auryn Resources Inc (TSE:AUG) (NYSEAMERICAN:AUG) unveils 12 prospective drill targets at its Committee Bay gold project in Nunavut
NexTech AR Solutions Corp (OTCQB:NEXCF) (CSE:NTAR) acquires music industry AR app AirShow
Acasti Pharma Inc (NASDAQ:ACST) (CVE:ACST) initiates review process to evaluate strategic alternatives to boost shareholder value
The Valens Company Inc (CVE:VLNS) (OTCQX:VLNCF) launches high-potency THC-infused beverage Summit 10 under white label deal with A1 Cannabis Company
Lexaria Bioscience Corp (OTCQB:LXRP) (CSE:LXX) gets ethics board nod for human trial of DehydraTECH drug delivery system; launches rodent trial with COVID-19 drugs
Algernon Pharmaceuticals Inc (CSE:AGN) (OTCQB:AGNPF) enrolls 100 patients for its Phase 2b/3 human study of Ifenprodil to treat COVID-19
First Mining Gold Corp (TSE:FF) (OTCQX:FFMGF) hails partner drilling at Pickle Crow which continues to enlarge areas of known mineralization
2.50pm: Wall Street sees mixed start
Shortly after the opening bell on Tuesday, the main Wall Street indices painted a decidedly mixed picture as investor sentiment wobbled ahead of the US presidential election debate and ongoing stimulus wrangling in Washington DC.
In the first minutes of trading, the Dow Jones Industrial Average fell 0.12% to 27,548, while the S&P 500 was relatively flat at 3,351 and the Nasdaq climbed 0.11% to 11,129.
Traders moods seem to also have been impacted by new US trading data, which showed that the countrys trade deficit in goods widened by 3.5% in August as exports struggled to bounce back from disruptions caused by the pandemic.
The figure is likely to be assessed in line with other key macro-economic data such as US GDP tomorrow and the non-farm payrolls report on Friday.
Back in London, the FTSE 100 was trading relatively sideways and was down 19 points at 5,908 at 2.50pm.
2.20pm: FTSE 100 continues to drift
Equity investors are still finding few reasons to dive into equities, especially as US equities now look set to open little changed.
The FTSE 100 was down 22 points (0.4%) at 5,907 while the mid-cap FTSE 250 was down 161 points (0.9%) at 17,209.
The latter is weighed down by a negative reaction to the trading update from hot baked foods purveyor Greggs PLC (LON:GRG).
Disappointing all of those journalists looking to use the “Greggs on a roll” headline for the thousandth time, the shares fell 8.0% to 1,121p after the company said it is to start consultations with unions about job losses after completing a review of the business.
Bakery chain Greggs is in talks with staff over cutting employee hours "to minimise the risk of job losses" when the job retention scheme ends.
Boss Roger Whiteside said there's "no chance" the firm will be able to reduce staff hours sufficiently to avoid any redundancies
— Rob Young (@robyounguk) September 29, 2020
Susannah Street, an analyst at Hargreaves Lansdown, eschewed the “on a roll” cliché and went with “flaky sales” instead.
Greggs had very flaky sales during August as warm temperatures put customers off its hot pastries and it was unable to benefit from the Eat Out to Help out scheme as seats werent available in its outlets,” she noted.
“September has seen its stores bringing home the bacon again though, as more people left home and popped in or picked up products using its click and collect service, which has been rolled out nationwide. Sales had crumbled earlier in the summer but over the four weeks to 26 September, like-for-like sales had recovered to 76.1% of the level the firm saw this time last year. Customers are being rewarded with the return of its celebrated Belgian bun as the firm brings back a broader range of its products,” she added.
12.35pm: Losses pared after EC's Economic Sentiment Indicator for the UK rises
As time ticks down to tonights potentially crucial US presidential debate, US investors appear to be prepared to hope for the best.
Spread betting quotes suggest the Dow Jones index will open a modest 26 points firmer at 27,610 while the S&P 500 is expected to start 6 points to the good at 3,357.
The tech-heavy NASDAQ Composite is looking a bit more hale and hearty, with a 277 point gain to 11,395 in prospect.
The show-down between two ageing gunslingers is not the only political show in town, of course, following yesterdays proposal by the Democratic Party of a US$2.4tn stimulus package for the US economy.
“Yesterday, we heard more positive tones from Democratic House Speaker Nancy Pelosi, who said that she has spoken with US Treasury Mnuchin on another relief package and that she expects talks to continue. With the Democrats lowering their demands, she argues that it is the White House and the Republicans turn to follow suit by accepting a larger stimulus package,” reported Danske bank.
“While an agreement still seems at least somewhat down the road (the White House and Pelosi are still around USD1,000bn apart), risk sentiment got a boost yesterday afternoon from Pelosi's comments. As we argued in yesterday's morning comment, if the two parties can agree on more fiscal stimulus, it may be the trigger for shifting the recent risk headwind to tailwind,” the Nordic investment bank said.
Also on the agenda today are speeches by Federal Reserve policy-makers, Messrs Williams, Harker and Quarles.
Palantir, the data analytics company, is set to float today and is expected to be valued at around US$20 billion.
“For the day ahead, Ill be watching out for the Palantir IPO, Micron Technologies earnings and the first presidential debate between Donald Trump and Joe Biden,” revealed LCGs Jasper Lawler.
“Really Palantir (ticker PLTR) will be a direct listing not a proper IPO. The listing is expected to value Peter Thiels company at over US$20 billion but as is often the case with tech companies when raising money – it is still unprofitable,” Lawler noted.
In Lonon, the FTSE 100 was down 17 points (0.3%) at 5,911 after the European Commissions Economic Sentiment Indicator (ESI) for the UK climbed to 83.0 in September from 75.1 in August.
A value of 100 represents the average value of the index between 1990 and 2019.
“The big increase in the ESI in September is an encouraging sign that the recovery hasnt ground to a complete halt, though the shortfall in demand relative to its pre-COVID level still seems to be bigger in the UK than in the rest of Europe. Indeed, the UKs ESI still was substantially below the Eurozones, 90.2, in September,2 observed Samuel Tombs, the chief UK economist at Pantheon Macroeconomics.
11.45am: Asia-focused banks give back some of yesterday's losses
The Footsie remains in the doldrums, not least because some of yesterdays big gainers – Asia-focused banks – have come back down to earth today.
The FTSE 100 was down 26 points (0.5%) at 5,901, with the retreat led by International Consolidated Airlines Group SA (LON:IAG), down 3.4% at 91.24p. The British Airways owner has taken up a semi-permanent residence in the Footsies cellar, as has another stock intrinsically tied up with air travel, Rolls-Royce Holdings PLC (LON:RR.), which is down 3.2% at 144.5p.
The top riser in London was Canadian Overseas Petroleum Ltd (LON:COPL), up 26% at 0.295p, after its board approved the granting of 341.6mln share options effective September 14, 2020.
The options can be exercised at a price of 0.35p – so a bit of a way to go yet and some market observers have suggested other reasons may be behind todays rise.
#copl is on the move… finally people are waking up to what is coming… PSC licence extension will see the green light to production Q1 2021. Extension is due tomorrow but maybe a few days late… who cares. This is going to be huge…????
— Sidneysideline (@Sidneysideline) September 29, 2020
10.15am: Market waits for presidential debate sponsored by Saga
Londons investors are exhibiting signs of apprehension ahead of tonights face-off between the two septuagenarian US presidential candidates.
The FTSE 100 was down 37 points (0.6%) at 5,891.
“Its all going to kick off later tonight, as the first US presidential debate takes place in Cleveland. The fun starts at 9pm US Eastern time and will last one and a half hours,” said Neil Wilson of markets.com.
No indication from Neil or anyone else whether there will be a break in the debate for cocoa.
“Trump won in Ohio, a typical battleground rust belt state, by eight points last time around but it is leaning towards Biden in 2020, according to the polls but we know polls only tell a portion of the story – its in the battlegrounds where it counts,” Wilson said.
An updating average of 2020 presidential general election polls: https://t.co/1pZ78kdkv7
— FiveThirtyEight (@FiveThirtyEight) September 29, 2020
The shares were up 4.4% at 512p after the company said like-for-like sales were up 19.2% in the quarter.
“The group is one of the market leaders in a structurally growing discounter market, and should outperform in a recessionary environment,” suggested Amisha Chohan, an equity research analyst at Quilter Cheviot.
“The retailer is also winning market share and has attracted a new, middle class, customer base – who are beginning to shop with them regularly. We believe B&M will continue to outperform peers as consumers become much more money conscious,” the analyst added.
8.45am: Ferguson leads blue-chips, while cut-price Greggs continues to struggle
The FTSE 100 made a quiet start ahead of key data including the Bank of Englands credit reading and monthly mortgage approvals.
Trade negotiations between the UK and EU are heading into a decisive phase, though nobody is talking about a quick resolution to the impasse over the internal markets bill.
The excitement after hours will come from the US where incumbent Donald Trump goes head to head with the early poll leader, Joe Biden, in the first of the 2020 campaigns televised presidential election debates.
On the market, Ferguson (LON:FERG), a UK plumbing and heating specialist, was an early winner, rising 5.7% after better-than-expected full-year results.
“The actions taken at the height of the pandemic mirrored what was being done in many global boardrooms,” said Richard Hunter, head of markets at Interactive Investor.
“The interim dividend and share buyback programme were suspended, as was the M&A programme and there was tight control on capital expenditure.
“This had the effect of freeing up additional capital when it was most needed, and having come out of the other side the company is now reaping the benefit of those temporary actions.”
On the FTSE 250, Greggs (LON:GRG) delivered what one commentator referred to as a flaky performance after the bakery chain said trading would remain below normal levels for the foreseeable future. The shares shed 4%.
A former tiddler that is now worth north of half a billion pounds, Novacyt (LON:NCYT) spiked a further 20% in early deals after it was announced the healthcare company had launched its COVID-19 antibody test.
Proactive news headlines
Westminster Group PLC (LON:WSG) said its technology division has been awarded a contract to replace and maintain security screening equipment at the Palace of Westminster, also known as the Houses of Parliament.
IXICO PLC (LON:IXI), the brain imaging analytics specialist, has received a £2mln extension to a contract from a 'top-20' pharma client to provide additional imaging services for a pivotal Huntington's disease (HD) study.
CentralNic Group PLC (LON:CNIC) said the conditions of its acquisition of Zeropark and Voluum, collectively known as Codewise, have been satisfied or waived, and as such, the deal is now unconditional and shall become effective at the end of October.
Ncondezi Energy Limited (LON:NCCL) said it has submitted a historical cost audit report to China Machinery Engineering Corporation (CMEC) for its Ncondezi integrated 300 megawatt (MW) power project in Tete, Mozambique. In a separate announcement covering its results for the six months ended June 30, Ncondezi reported a loss for the period of US$1.21mln, narrowed from US$1.26mln in the previous year, while it ended the first half with cash of US$592,000.
Shares in Iofina PLC (LON:IOF) surged on the back of interims that revealed record revenue and underlying earnings (EBITDA) for the iodine extractor. Revenue in the six months to the end of June rose 8% to US$15.74mln from US$14.53mln in the corresponding period of 2019 while EBITDA jumped 50% to US$2.95mln from US$1.97mln.
Zanaga Iron Ore Company Ltd (LON:ZIOC) said the recent rise in the price of iron ore has made its project in the Republic of Congo even more attractive. Work is running within the 2020 budget forecast, it added, while cash reserves at 28 September were US$0.5mln.