Proactive Investors -
- FTSE 100 on the front foot, up 29 points
- AstraZeneca (NASDAQ:AZN) falls as trial results disappoint
- Oil price spikes as Saudi extends production cut
Mixed start seen in shortened US session
US stocks are expected to start the first session of the second half of 2023 in mixed fashion after strong gains on the final session of the first half on Friday, with investors more focused on Tuesday's Independence Day holiday.
In pre-market trading, futures for the Dow Jones Industrial Average (DJIA) were 0.1% lower, while those for the S&P 500 were flat, but contracts for the Nasdaq-100 added 0.1%. The markets will close at 1.00pm ET on Monday ahead of Independence Day.
On Friday, the DJIA ended 285 points, or 0.8% higher at 34,407, while the S&P 500 index jumped 1.3%, and the Nasdaq Composite added 1.5%.
The Nasdaq Composite closed out its biggest first-half gain since 1983, surging 31.7%, while the S&P 500 jumped 15.9% for its best first-half since 2019. The DJIA lagged, climbing a modest 3.8% during the period.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank commented: "Equities did well. Even though profits fell, they fell less than expected and more importantly, AI saved the day sending the Big Tech stocks to a nice bull market. Bonds on the other hand tumbled as US spending and growth remained resilient. The latter convinced the Federal Reserve (FeD) that it should keep hiking the interest rates."
"But," she added, "last week’s strong economic data released in the US, combined with Friday’s softer-than-expected PCE figures supported, yet again, the idea of a soft landing and further fueled the rally in stocks."
"Of course, this incredible performance makes many investors wonder whether the equity rally could continue in the second half," Ozkardeskaya concluded.
Investors will have the latest US ISM Manufacturing PMI and S&P Global manufacturing PMI data for June to assess on Monday morning, ahead of Friday’s always crucial June jobs report.
On the corporate front, Tesla shares were little changed in overnight trading after the electric vehicle maker reported delivery and production numbers that beat analysts’ expectations.
Elsewhere, United Airlines shares inched marginally lower as bad weather contributed to a swath of flight disruptions over the long holiday weekend.
Petrol retailers "profiting at our expense"
Sarah Coles, head of personal finance, Hargreaves Lansdown (LON:HRGV) says the CMA report on prices at the pump "highlights what motorists have long suspected – that petrol stations are profiting at our expense."
"When prices soared in the middle of last year, costs at the pump went up like a rocket and we all paid the price," she said.
"Then when they dropped back, the supermarkets dragged their feet in passing on cheaper prices, and they fell like a feather."
"The rest of the market followed in their wake, so margins on fuel rose by 6p a litre. Life has been particularly difficult for diesel drivers, who are paying 13p a litre more thanks to higher margins," she explained.
UK manufacturers battle staff shortages
UK manufacturers are struggling to battle staff shortages, latests figures have showed.
Data from from Make UK, an industry body, and the professional services firm BDO showed that there were still 74,000 unfilled vacancies in the sector, creating a £6.5bn economic gap that needed filling despite overall employment increasing last year.
Manufacturing, which accounts for about 10% of the UK’s economic output, has been stuck in the doldrums this year even as the dominant services sector has continued to expand.
The latest PMI for the sector released today showed the sector had contracted to a six-month low.
Make UK’s regional outlook found that Yorkshire and the Humber reported the biggest jump in manufacturing jobs, with employment up 46,000 last year. It means that just over a tenth of all jobs there are in manufacturing.
The South West and the East of England reported 27,000 to 28,000 new jobs in manufacturing last year. The North West lost 21,000 jobs and the East Midlands shed 7,000. The total remained stable at 147,000 in Wales.
Home and motor insures rebuked by FCA
The UK financial watchdog has blasted home and motor insurers over their treatment of vulnerable customers and their handling of complaints in the cost of living crisis.
The Financial Conduct Authority said it had completed a review into home and motor insurers’ practices which uncovered that some had failed to give customers appropriate settlements, handle their complaints in time and identify vulnerable customers in need of support.
The watchdog’s review also found instances of motor insurance customers being offered a price lower than their car’s fair market value after it had been written off, a violation of FCA rules. The regulator said it is “taking action” against firms who have broken its rules.
Sheldon Mills at the FCA, said: "Timely and fair claims handling is especially vital during the cost of living squeeze."
‘While we have seen many firms treating their customers correctly, we found too many examples of customers not receiving the service they’re entitled to."