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FTSE 100 hits new record
Newsflash: The UK’s FTSE 100 index has hit a new alltime high at the start of trading in London.
The blue-chip share index has hit 7926 points, as it surges over the record high set on Friday (which was the first since 2018).
As explained in the opening post, the rally comes as hopes build that the UK economy could fare better in 2023 than feared, with the NIESR thinktank predicting a recession could be avoided.
Shares are also benefiting from hopes that central banks could end their interest rate increases soon.
Victoria Scholar, head of investment at Interactive Investor, tells us:
The FTSE 100 has hit a record high again, surpassing Friday’s peak. Following a wobbly start to the week in which global equities were hit by concerns about a more hawkish path from the Fed after a strong US jobs report as well as heightened US-Sino tensions, the UK large-cap index has restored its bullish momentum.
Yesterday Fed Chair Jerome Powell said inflation is easing, raising hopes that the US could be approaching the peak for interest rates. A strong close on Wall Street with the Nasdaq closing up by 1.9% has helped drive a positive start to the European session.
Over a one-year period, Pearson is the best performing stock on the FTSE 100 followed by BAE Systems and Antofagasta. Over the past one month, JD Sports is the top performer with IAG and 3i in second and third place.
The pound is trading higher against the greenback driven by US dollar weakness against most European currencies today following Powell’s relatively hopeful remarks about the outlook for US inflation.”
Key events
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Shares in Manchester United have jumped by 15% in early trading, after news broke that the Emir of Qatar, Sheikh Tamim bin Hamad al-Thani, is interested in buying the club.
Shares in Activision dropped 3% at the open, but are now down 1.7%.
The New York stock market has opened slightly lower, despite hopes that interest rate increases are slowing.
The Dow Jones industrial average has dipped by 28 points, or 0.1%, to 34,128 points, while the broader S&P 500 index is 0.25% lower.
Shares in Microsoft have jumped 3%, despite the CMA dealing a blow to its hopes of buying Activision.
Investors are encouraged by Microsoft’s push in artificial intelligence – it is revamping its Bing search engine and Edge Web browser with AI, using technology behind the wildly popular ChatGPT service.
Administrators for collapsed airline Flybe have applied for a temporary operating licence, the Civil Aviation Authority (CAA) has announced.
This would give the administrators from Interpath the chance to put the regional carrier on a firm footing, but flights would not initially resume.
It is the first time the CAA has received an application for a temporary licence from a failed airline, PA Media reports – and comes almost two weeks after Flybe ceased trading and cancelled all its scheduled flights.
A spokesman for the regulator said:
“Flybe’s administrators have applied for a temporary operator’s licence.
“If approved, it would allow the administrators to start the process of restructuring the business.
“The UK Civil Aviation Authority has not yet made a decision on whether to grant a temporary licence.
“Flybe’s licence currently remains suspended in accordance with the undertakings given by the administrators.”
Activision Blizzard says it hopes to help Britain’s competition regulator to “better understand” the gaming industry, after the CMA ruled today that Microsoft’s takeover could harm gamers.
An Activision spokesperson said:
“These are provisional findings, which means the CMA sets forth its concerns in writing, and both parties have a chance to respond.
“We hope between now and April we will be able to help the CMA better understand our industry to ensure they can achieve their stated mandate to promote an environment where people can be confident they are getting great choices and fair deals, where competitive, fair-dealing business can innovate and thrive, and where the whole UK economy can grow productively and sustainably.”
Workers employed by the City of London Corporation are being balloted on whether to hold strike action in a long running pay dispute.
The Unite union say the City of London Corporation, which is the local authority for the City of London, has imposed a pay increase for 2022 worth just three per cent, on average.
With RPI inflation at 13.4%, that is a “substantial real terms pay cut”, Unite says.
Ballot papers are being sent to members from today, with the ballot closing on Wednesday 15 March. If workers support taking industrial action then strikes could begin before the end of next month.
6th Feb – CoL ballot closes, if you haven’t voted yet, Vote now!
A GMB member said:
▶️”I have had to take out loans and am using a card to get by each month.”◀️✅yes to industrial action
✅yes to decent pay
✅💯City of London Corp must pay up pic.twitter.com/8ThYEfqW2I— GMB London Region (@GMBLondonRegion) February 3, 2023
Unite regional officer Nick West says the City of London Corporation can fully afford to deliver a pay rise.
West adds:
Our members’ are being forced to use food banks and borrow money to pay bills. All of this is happening whilst the corporation spends hundreds of thousands on lavish entertainment for the wealthy.
Unite has exhausted every avenue of negotiation and, for the first time in the union’s history, are balloting our members at the City of London Corporation for industrial action over pay. Our members are united in the demand for fair pay and are prepared to take industrial action, halting the City’s key services until the corporation puts forward an acceptable offer.”
Uber stock rises after earnings as company gives upbeat outlook
Ride-sharing company Uber has reported its strongest quarter on record, as demand rebounded as pandemic restrictions were rolled back.
Uber has reported adjusted profits, on an EBITDA basis, of $665m, an increase of $579m year-on-year.
Gross Bookings grew 19% year-over-year, with ‘Mobility’ bookings (journeys) up 31% and ‘Delivery’ (such as food orders) rising 6% year-on-year.
“We ended 2022 with our strongest quarter ever, with robust demand and record margins,” said Dara Khosrowshahi, Uber’s CEO, adding:
“Our global scale and unique platform advantages position us well to accelerate this momentum into 2023.”
Last year, a global investigation revealed how Uber broke the law, duped police and regulators, and secretly lobbied governments across the world.
Today, the company says it is confident of growth in the current quarter. It predicts gross bookings will grow by 20% to 24% year-on-year in Q1 2023, and expects adjusted EBITDA of $660m to $700m.
Nelson Chai, Ubers’s CFO, says the company “significantly exceeded” its profitability outlook last year.
Chai adds:
“Our outlook for a Gross Bookings and Adjusted EBITDA step up in Q1 builds on that progress, and sets us up for yet another record year.”
Shares in Uber are up almsot 8% in pre-market trading.
Microsoft has said it was committed to addressing the concerns raised by Britain’s competition regulator about its acquisition of “Call of Duty” maker Activision Blizzard today.
Rima Alaily, MS’s corporate vice-president and deputy general counsel, says:
“We are committed to offering effective and easily enforceable solutions that address the CMA’s concerns.”
“Our commitment to grant long-term 100% equal access to ‘Call of Duty’ to Sony, Nintendo, Steam and others preserves the deal’s benefits to gamers and developers and increases competition in the market.”
Her’es our news story on the UK’s competition regulator’s ruling that Microsoft’s $68.7bn (£59.6bn) deal to buy Activision Blizzard, the video game publisher behind hits including Call of Duty, will result in higher prices and less competition for UK gamers.
Shares in Activision Blizzard have dropped by 4% in pre-market trading.
They’re down to $72.70.The stock had already been trading at a substantial discount to the $95 per share value of Microsoft’s offer, given concerns that regulators might block the deal.
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