Ladimir Putin’s intervention in the gas market and a short-term deal on US debt limits has calmed traders’ nerves after yesterday’s wild session.
The FTSE 100 index rose 1%, helping natural gas futures to drop as low as 227p per therm, up from 400p seen yesterday when investors panicked over inflation fears and an earlier-than-expected rise in interest rates.
Meanwhile, home prices remain on an upward trajectory as the space race continues, after Halifax reported a new record monthly average figure of £267,587.
Huge money laundering fines on NatWest
NatWest pleaded guilty to three accounts of money laundering today and can expect hefty fines from watchdogs willing to take action against the crime.
The bank, formerly the Royal Bank of Scotland, admitted that it had failed to comply with regulations over a four-year period between November 2012 and June 2016.
It’s a blow to Alison Rose, the new chief executive, who is trying to restart the bank, which was broken up under the leadership of Fred “The Shred” Goodwin and had to be bailed out by the taxpayer. .
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risk appetite returns
Clouds turned cloudy for stock markets today after US politicians heeded warnings of “disastrous consequences” should they fail to raise the country’s debt limit in time.
An offer by Senate Leader Mitch McConnell to increase a short-term debt limit to avoid a national default provided some relief for Wall Street, though the ceasefire was doing little more than delaying the issue until December.
Treasury Secretary Janet Yellen previously warned that her failure to agree an extension would likely lead to a recession, putting additional pressure on sentiment at a time of mounting global shocks to inflation and interest rate outlook.
The S&P 500 and Nasdaq closed nearly 0.5% higher, prompting bargainers to return to the London market after Vladimir Putin’s intervention in the gas market.
The FTSE 100 index rose more than 1% at one point and later rose 51.94 points to 7047.81 after a gain of more than 3% for miners, including Anglo American.
Yesterday’s all-important jobs report in the United States means relief may not last long as a strong figure will be seen as a green light for the Federal Reserve to launch a plan to ease economic stimulus .
A particularly vulnerable number has the potential to spark fears of a stagflationary recession through a toxic combination of rising prices and low growth.
FTSE 100-listed packaging and paper giant Mondi revealed that while its input costs were significantly higher in the September quarter, it has so far managed to pass these energy, resin, transportation and chemical overheads.
The stock rose 19p to 1,807p after Mondi allayed fears that demand for its products could be hit. Fellow packaging firm Smurfit Kappa also rose 88p to 3,850p.
The FTSE 250 index rose 95.22 points to 22,481.84, with British gas owner Centrica up 2%. Rising gas prices appear to have done no damage with shares now 18% over the past month as smaller rivals slid their way.
On AIM, Victorian plumbing fell further from June’s first price of 262p, when the bathroom products firm said revenue growth slowed over the summer. Shares fell from 19p to 221p, even though full-year earnings remained ahead of market expectations.
Cheers: Revolution Bars reports strong trading performance
People going out to enjoy cocktails after the lockdown have helped Revolution Bars enjoy business ahead of expectations.
The bar chain said that between July 19 and October 2, it recorded comparable sales, up 17% over the same period two years ago before the Covid-19 crisis.
The hospitality sector was able to reopen in July.
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Workspace sees SMEs come back to London offices
Coming back to the SME office, the owner of the homeowner’s workspace said they had reported pick-ups in lettings and building use.
“There are positive signs of momentum,” Graham Klemet said, with more than 1,000 inquiries, 633 views and 175 lettings agreed to on their sites last month. He said that was better than what was seen in the pre-pandemic.
The company, which has offices in 60 locations in London, offers flexible leases, typically two years with the option to exit after six months, and the scope to take up additional space if needed. It is popular among start-ups and SMEs.
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Loan Deal FTSE 100 . removes
The FTSE 100 index is up more than 1% and has opened at around 7070.
Richard Hunter, Head of Markets, Interactive Investor, said: “The risk appetite for investors is back for some time, although sentiment remains fragile.”
The mood has been helped by progress on debt limit talks in the US after Senate Leader Mitch McConnell offered to raise the short-term debt limit to avoid a national default.
London-listed mining stocks benefited from a correction sentiment, with Anglo American shares up 3% and Glencore up 2%.
fear of inflation
Gas prices fell below their record high yesterday after Russia announced it was ready to increase supplies to help Europe survive the energy crisis.
But with gas futures still holding higher levels, there is every possibility that households will see a sharp rise in their cost of living this winter as companies pass on a lot of overheads.
Bank of America’s UK economist Robert Wood now expects the CPI measure of inflation to hit 5.1% in April, along with a figure of 5.8% for the RPI benchmark, which still shows train fares and student fares. Used to set loan rates.
His note published yesterday projected a 45% hike in Offgame’s price range in April instead of previous expectations of a 25% increase.
UK home prices climb as ‘space race’ continues
UK home prices rose “sharply” in the last weeks to add more than £4,400 to the value, where stamp duty aid was available with the aim of giving a turbo-boost to the residential market during the pandemic.
Halifax said average prices in September hit a record £267,587, up 1.7% month-on-month and 7.4% higher than the same period last year.
Russell Galley, managing director of the mortgage lender, said: “This rate of monthly growth was the strongest since February 2007.”
Read the whole story here.
Even as bitcoin was kept in the shadows by the spectacular gas price volatility yesterday, the cryptocurrency rose by a comparatively modest 7% to top $55,000 yesterday.
It continued to trade near that level this morning, with more institutional support gaining ground yesterday when the investment firm of billionaire George Soros said it had some coins.
Bitcoin is now at a five-month high after gaining 27% during the month.
gas prices stable
London’s market is set for a quiet session after Russian President Vladimir Putin’s intervention yesterday helped ease rising natural gas prices.
Gas futures for November delivery rose above 400p per therm at one point yesterday, raising fears of inflation and driving the FTSE 100 index down 1%. The gas figure is now back at 266p, while Brent crude is trading slightly lower above $80 a barrel.
Expectations of a US debt ceiling settlement are also up around 0.5% on both the S&P 500 and the Nasdaq after Wall Street ended in positive territory following reverse losses.
Tomorrow’s jobs report in the United States likely means the uncertainty hasn’t gone away, however, as a strong figure seen as a green light for the Federal Reserve to launch a plan to ease economic stimulus. Will go
Particularly vulnerable numbers have the potential to spark fears of stagflation, a toxic combination of rising prices and low growth.
After yesterday’s wild session, the FTSE 100 index is expected to open nearly 60 points higher at 7055.