FTSE 100 Live August 25: Interest rate expectations take center stage in Jackson Hole, markets stable

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Well-received earnings news helps FTSE edge higher

Strong earnings news for the building products sector and gains for oil stocks helped London’s FTSE 100 post modest overall gains as homebuilders and retail stocks continued to tumble on fears of the implications of rising interest rates.

The index added 6 points in total to 7478.67, up 0.2%. CRH, the global building products group, topped the rankings with a gain of almost 4% after its half-year results. Persimmon, the developer, was the biggest faller, down more than 4%.

Global market investors will get clues about the prospects for a U.S. rate hike when the Federal Reserve Chairman speaks at a gathering of central bankers in Jackson Hole, Wyoming. Speech dominated sentiment for much of the week.

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Wall Street soars as corporate news awaits rate clues

New York stocks rallied on the open of trade as investors scoured a range of corporate news ahead of remarks expected tomorrow from the Federal Reserve Chairman.

Jay Powell will speak at the rally of central bankers in Jackson Hole, Wyoming, in an event likely to shape market impressions of the speed and scale of U.S. rate hikes as policymakers fight against inflation.

The S&P 500 gained 7 points to 4148.7, a gain of 0.2%. Tesla rose 0.9% after the electric car maker split its shares in a bid to attract more retail investors. Amazon gained 0.4% after announcing plans to shut down its online healthcare business. Peloton, the maker of connected exercise equipment, fell 16% after reporting a quarterly loss of more than $1 billion.

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Peloton shares look set for a wild ride after reporting a loss of over $1 billion

Peloton shares are on course for another wild ride after the maker of internet-connected exercise bikes reported a quarterly loss of more than $1 billion just a day after a sales pact with Amazon pushed shares up more than 20%.

They are now down more than 14% in premarket trading ahead of Wall Street’s opening bell after reporting a loss of $1.24 billion for the three months to the end of June as the company embarked on a restructuring program reducing the size of its chain of stores and favoring the sale of subscriptions to its online exercise classes. It lost $313 million in the same period a year ago.

The company, which has seen a sales boom during the lockdowns, has struggled since the lifting of Covid restrictions, is raising prices again after cutting them after the pandemic.

Its chief executive, Barry McCarthy, said the connected fitness market will remain “challenging for the foreseeable future”, having shrunk 51% year-to-date, with Peloton’s market share up 17%.

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Cannabis products company Love Hemp hit by trade suspension

Cannabis products company Love Hemp has been fined £100,000 and delisted from the alternative Aquis Stock Exchange (AQSE) due to a fundraising issue.

The company backed by boxer Anthony Joshua, a two-time world heavyweight champion, specializes in cannabis oil (CBD) and other hemp-based products, including edibles and capsules, and now has agreed to pay a reduced fee of £70,000 after being the victim of an AQSE investigation.

Love Hemp said it had completed a £2m funding round despite some fundraising participants delaying settlement terms with the full amount of fundraising proceeds unavailable for the company for “20 days after announcement”.

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CRH builds profits even as costs are “difficult and volatile”

CRH, the global building materials giant, pointed to a “challenging and volatile” environment for costs as inflation continues to hammer the construction sector.

There were signs in its results for the six months to June 30 of the impact. Operating profit at its Western Europe division fell year-on-year, where its precast concrete business increased sales but suffered from rising costs. In Eastern Europe, CRH indicated that it continued to assist its staff in Ukraine

The global company said it was able to offset the overall impact of rising costs through “a strong focus on commercial and operational initiatives” and announced a more than 2% increase in profit from 2 .2 billion, on sales of $15 billion, up 14%. Margins rose across the group and remained flat in Europe, while continued “backlogs” still helped parts of its business.

CRH shares were up 3.5% in early trading this morning.

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The number of Amigo customers halved in one year

Subprime lender Amigo has seen its customer base halve in just a year, even in the face of the worst cost-of-living crisis in decades, a key time for consumers to take out “non-traditional” loans.

The troubled group that had a run-in with the Financial Conduct Authority (FCA) that led to its voluntary exit from the lending market two years ago saw customer numbers fall 48.3% from 118 million in the three months to the end of June last year to 61 million over the same period this year.

Revenue at the lender, now embroiled in a customer compensation scheme following mis-selling complaints, also fell nearly 70% in the period, from £10.4m to £32m. £5million last year.

Amigo shares fell 9% in early trading this morning.

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Morses Club drops to £43m as borrower claims rise

Home moneylender Morses Club have suffered a £43m loss after being inundated with claims from borrowers for ‘unaffordable’ loans.

The spike in claims follows a crackdown by the Financial Conduct Authority on subprime lenders who it says are not treating customers fairly.

Earlier in August, the company suspended claims processing to avoid “significant short-term liquidity issues.” The company said its status as a viable business in the coming months hinged on a slowdown in the number of claims filed.

Morses Club boss Gary Marshall said: “The past 12 months have been difficult for the business and we fully recognize the current challenges we still face as a group.”

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Sony is raising the price of the PS5 amid increased cost pressures

Sony is to raise the UK price of the popular Christmas gift, the PS5 games console, by £30 as it tackles rising costs.

The Tokyo-based company says its PS5 with Ultra HD Blu-ray Disc Player will drop from £449.99 to £479.99 with immediate effect in the UK, but will remain the same in the US.

In July, the company cut its earnings forecast for its games unit by 16%, which it attributed to the lack of new releases.

“We are seeing elevated global inflation rates, along with unfavorable currency trends, impacting consumers and creating pressure on many industries,” said Jim Ryan, President and CEO of Sony Interactive Entertainment.

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CRH leads FTSE 100 higher as results impress

CRH shares jumped 3% today as the building materials giant’s results impressed amid costs and economic headwinds.

Dublin-based CRH, whose businesses include aggregates, asphalt and cement, rose 92p to 3,223p in the FTSE 100 index after its half-year results were boosted by strong pricing power and the demand for public sector infrastructure projects.

Underlying profit rose 21% to $2.2bn (£1.9bn) as the half-year dividend rose 4% on confidence for a higher annual surplus of 5.5 billion (£4.6 billion).

CRH helped improve the mood of the London market after three days of losses. The FTSE 100 index gained 50.30 points to 7521.81, with Glencore, BP and Antofagasta among the stocks up more than 1%.

The gains came at the start of the economic policy symposium in Jackson Hole, Wyoming, where traders will look for clues as to how central bankers plan to fight inflation without plunging the global economy into a deep recession.

AJ Bell chief investment officer Russ Mold said: “There’s a lot to do on US Federal Reserve Chairman Jerome Powell’s speech tomorrow. Speculation is so hot ahead of his remarks that it seems even subtle shifts in intonation could make a difference in jittery markets.

Prime droppers included asset manager Abrdn, whose latest half-penny drop to 149.7p bolsters expectations that it will be relegated based on valuations in the week’s quarterly FTSE 100 reshuffle next. Hikma Pharmaceuticals is also at risk, with wound care company ConvaTec and F&C Investment Trust the most likely replacements.

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City talent war says Hays

The City of London jobs market is booming, defying the general economic gloom amid what leading recruiter Hays calls an “acute skills shortage”.

The headhunter today announced a 128% jump in profit for the year to June to £210million. This allows it to pay dividends worth £168m to investors with a potential share buyback of £75m this year.

Chief executive Alistair Cox told Standard there was a war for talent: “London and the City are facing quite an acute skills shortage – there aren’t enough talented people to go around.”

Although he is aware of the wider economic insecurity, he said: “Here at the moment the activity levels are very good. We operate in the skilled labor market and despite what may happen with the economy, I don’t see these skills shortages going away.

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Stephen V. Lee