European stocks fall despite UK shop price rises return to ‘normal’

Live20 updates

• Tue, 28 May 2024 at 5:05 pm EEST

  Boohoo abandons bonus plan

  Boohoo has backed down on its controversial scheme to pay bonuses to its directors.

  The fashion group told shareholders that it has withdrawn a resolution from next month’s AGM which would have handed £1m bonuses to Mahmud Kamani and Carol Kane, its co-founders, and chief executive John Lyttle.

  The U-turn comes after a backlash from some investors, who were gearing up to revolt against the plan when it came to a vote at the AGM on 20th June.

  Kamani, Kane and Lyttle were not due bonuses because they missed financial targets for the last year. However, Boohoo’s remuneration committee agreed to a pay out anyway.

  It said:

  “The Remuneration Committee considered at great length the overall formulaic outcomes and determined that they were not reflective of the overall performance of the management team during the financial year.

  “This was against the backdrop of an agreed change in focus by the board during the second half of the year placing greater emphasis on cash and inventory management, to ensure the business continues to be well positioned to capitalise on top line growth going forward.”

• Tue, 28 May 2024 at 4:44 pm EEST

  The pound rise to two-month high

  

  The pound (GBPUSD=X) hit its highest level against the dollar since 21 March at $1.2794.

  Goldman Sachs told clients that they do not expect the UK general election to have a major influence on sterling in the short term, adding:

  “Labour leads in the polling averages by about 20ppts, and fiscal space will be relatively limited in the next Autumn Statement, so the space for policy uncertainty in the near term is relatively limited as well.”

  Sterling also benefitted by falling expectations of interest rate cuts this year, with just one quarter-point cut now priced in for 2024.

  The euro rose 0.14% against the pound at 85.14 pence per euro, after hitting 84.94 on Monday, its lowest level since August 2023.

• Tue, 28 May 2024 at 3:26 pm EEST

  GameStop shares soar in pre-market trading

  Memestock-in-chief GameStop (GME) was on the ascent again on Tuesday, up more than 20% in pre-market trade.

  The moves come following an announcement on Friday that the company has completed a previously disclosed, roughly $933.4m (£730m) equity offering through the sale of 45 million shares.

  The rally more than corrects losses of around 13% on Thursday last week.

  GameStop’s moves create something of a trend among memestocks in their equity strategy — they follow a $250m at-the-market equity offering by AMC earlier this month.

• Tue, 28 May 2024 at 3:11 pm EEST

  £1,200 pay rise required to keep pace with inflation

  New market analysis by peer-to-peer real estate investment platform, easyMoney, reveals that the average annual UK salary would need to increase by £1,239 in order to keep pace with inflation in 2024.

  The data shows that: –

  • In 2022, the average salary rose by 6.4% to £33,449. In the same year, inflation hit 9.1%. This means that despite a solid pay rise, salary growth remained -2.7% behind inflation.

  • In 2023, earnings saw another promising increase of 5.8% to reach an average of £35,404 per year. However, this increase was once again undermined by annual inflation of 7.3%. This means earnings were once again behind the pace of inflation, this time by -1.5%.

• Tue, 28 May 2024 at 2:59 pm EEST

  The tax pledges to watch for in the UK election

  

  UK election campaigns are in full swing with both Labour and the Conservatives setting out their stalls on key issues. The economy is a hot button topic across the board, with historically high interest rates and a cost of living crisis to contend with.

  Hargreaves Lansdown (HL) laid out some potential tax pledges that could affect the wallets of ordinary voters the most.

  Read more here

• Tue, 28 May 2024 at 2:43 pm EEST

  Gold prices dip on profit taking as rate-cut bets ease

  Gold prices slipped on Tuesday with investors taking profits after a recent rally. It also comes amid pressure from the reduced probability of US Federal Reserve rate cuts, while the market awaits key US inflation data later this week.

  Spot gold fell 0.3% to $2,343.99 per ounce this morning, after rising 0.7% on Monday.

  The bullion fell below its 21-day moving average, which currently stands at $2,348, but was on track for the fourth consecutive month of growth with the 2.5% gain in May. The spot price hit a record high of $2,449.89 on May 20.

  “Gold, silver and PGMs (platinum group metals) are subject to some near-term profit-taking after rallies recently,” said Amelia Xiao Fu, head of commodity market strategy at Bank of China International.

• Tue, 28 May 2024 at 2:16 pm EEST

  Boohoo faces pay revolt

  Boohoo (BOO.L) faces a revolt from shareholders over its controversial decision to lavish bonuses on senior executives despite racking up £160 million worth of losses last year.

  Dan Coatsworth, investment analyst at AJ Bell, said:

  “Boohoo never seems to do itself any favours from a governance perspective. The fast fashion company has faced criticism over its supply chain and greenwashing claims during a scandal-hit stay on the stock market.

  “Now reports suggest it could face major shareholder opposition to plans to reward founders Carol Kane and Mahmud Kamani and CEO John Lyttle with sizeable bonuses despite the business racking up losses in the 12-month period to February 2024. The stage is set for a sizeable revolt at the AGM in less than a month’s time.”

• Tue, 28 May 2024 at 1:48 pm EEST

  US dollar slips

  The US dollar edged down in early Tuesday trading as investors focused on the upcoming release of PCE inflation data later in the week.

  Personal Consumption Expenditure, the Federal Reserve’s preferred inflation measure, is expected to have slowed to 0.2% in April compared to the previous month.

  Ricardo Evangelista, senior analyst at ActivTrades, said:

  “This scenario will solidify expectations of a Fed rate cut in September if confirmed.”

  “Other US inflation readings for April also indicated a slowdown in price increases, a trend that could lead to further dollar softness as the likelihood of a rate hike diminishes and traders increase bets on a September cut.”

• Tue, 28 May 2024 at 1:32 pm EEST

  Bitcoin ETNs debut on London Stock Exchange

  Watch: Bitcoin ETNs debut in London, paving way for UK to become Europe’s crypto hub, says 21Shares | Future Focus

  Bitcoin and ether exchange-traded notes (ETNs) have begun trading on the London Stock Exchange (LSE), opening the door to potentially make the UK the crypto hub of Europe, according to a 21Shares executive.

  ETNs are traded and settled like regular shares and track the performance of underlying assets such as bitcoin or ether, similar to spot bitcoin exchange-traded funds (ETFs), which were approved by the US Securities and Exchange Commission (SEC) in January.

  Yahoo Finance Future Focus spoke to Alex Pollak, head of UK for 21Shares, about the launch of bitcoin and ether ETN trading on the LSE, and what this could mean for the develop of the UK as a global crypto hub.

  Pollak stated that by approving the listing of bitcoin and ether ETNs on the LSE, the UK’s Financial Conduct Authority (FCA) is attempting to gradually open up the crypto market in the UK.

  “I think the fact that these products will now be available on the London Stock Exchange does show progress and I think within three years from now the UK will be home to the largest crypto exchange-traded fund market in Europe,” Pollak added.

  Read the full article here

• Tue, 28 May 2024 at 1:13 pm EEST

  Persimmon slips on possible £1bn Cala bid

  Persimmon (PSN.L) shares fell in London on Tuesday after a report revealed that the housebuilder is exploring a £1bn takeover bid for Cala Group, a rival player in the sector which has been put up for sale.

  According to Sky News, Persimmon is leaning towards submitting an offer for Cala ahead of a bid deadline next week.

  Insiders expect Cala, which is being auctioned by Legal & General (L&G), to command a price tag of about £1bn. L&G shares were trading higher.

• Tue, 28 May 2024 at 1:01 pm EEST

  Oil prices rise

  

  Global oil prices rose on Tuesday on the prospect of OPEC+ maintaining oil supply curbs and hopes of strong US summer.

  On Monday, oil rose more than 1% in muted trade owing to public holidays in both the UK and the US.

  The July contract for Brent Crude (BZ=F), the global benchmark, rose 17 cents or 0.2% to $83.27 a barrel, while US West Texas Intermediate (WTI) crude was at $78.79, up $1.07 or 1.4%, from Friday’s close.

  Tamas Varga of broker PVM said:

  “Despite the indisputably brighter mood seen in the last two days, interest rate concerns will most plausibly act as a (brake) on further attempts to send oil prices meaningfully higher in the immediate future.

  “It is a fair assumption that no changes in production levels will be forthcoming.

  It comes ahead of an online meeting of OPEC+ producers on Sunday, where analysts are expecting 2.2 million barrels per day of voluntary production cuts to stay in place and buoy prices further.

• Tue, 28 May 2024 at 12:44 pm EEST

  Staff salary expectations below employer forecasts

  UK workers expect a 3.8% pay rise in the next year, below the 4.6% planned by employers, suggesting businesses are mitigating against skills shortages.

  Some 65% of staff are still confident they will receive a salary increase in the next 12 months, while a quarter (25%) would stay with their current employer if their remuneration packages didn’t change.

  This is according to the latest Robert Half Jobs Confidence Index (JCI) – an economic confidence tracker produced in partnership with the Centre for Economics and Business Research (Cebr).

  Matt Weston, senior managing director UK & Ireland, at Robert Half, said:

  “Wage inflation hasn’t fallen as expected, but what is perhaps more notable is that the fall we have seen hasn’t translated into a positive impact for people’s wallets. The cost-of-living crisis is still very much prevalent in the UK and workers are feeling the pinch, hence the large number hoping for pay rises. However, the uncertainty of the market at the moment means that many are taking a more realistic approach.

  “Many workers are also clearly opting for safety and security over jumping ship for better pay. This ‘Great Stay’ that we’re seeing in the workforce at the moment is further evidence that people are reluctant to move jobs in the current climate. For skills short remits this is both positive and negative in that it aids retention, but also further reduces talent pools. Employers are going to have to work harder to attract the core staff they need, and pay isn’t always going to cut it as a solution.”

• Tue, 28 May 2024 at 12:31 pm EEST

  Stocks to watch this week

  Earnings season is all but over but some major names are yet to report.

  Investors have some high expectations for some of the key companies reporting next week such as Salesforce (CRM) in the US and Dr Martens (DOCS.L) in the UK.

  Here’s what to look out for this week

• Tue, 28 May 2024 at 12:24 pm EEST

  NatWest online banking goes down

  

  NatWest (NWG.L) has issued an apology to its customers after they were unable to access the bank’s app and website today.

  Customers were unable to log in to their bank accounts on the company’s smartphone app due to a service disruption. The lender advised customers to use its telephone banking service or visit a branch.

  NatWest said:

  “Some of our customers are experiencing issues with our mobile app and Online Banking service. We’re sorry for any inconvenience caused and we’re working hard getting everything back up and running for you. We will share an update when we have more information.”

  @NatWestBusiness @bbc5live it would now appear that whole of NatWest online bank and app is not working this morning and they have admitted that there known fault/problem but they don’t seem to be fixing it and no one is calling you back

  — Sebastian Garner (@sebgarner) May 28, 2024

• Tue, 28 May 2024 at 12:10 pm EEST

  Revolution Bars rejects Nightcap rescue deal

  Revolution Bars (RBG.L) has rejected a rescue deal from its rival Nightcap (NGHT.L), arguing that the “highly speculative” offer “is incapable of being delivered”.

  Struggling nightlife operator has been in talks with at least 32 potential suitors for a deal to save the chain, including Nightcap, which revealed last month it was interested in buying some or all of the Revolution business.

  Dan Coatsworth, investment analyst at AJ Bell, said:

  “Revolution Bars appeared to confirm suspicions that combining with Nightcap would just double the problems facing the two troubled night spot operators. It is striking to see a company say a bid is ‘incapable of being delivered’ and Revolution Bars continues to push shareholders to stick with its own restructuring plan.

  “The bigger issues, throbbing away in the background like an insistent beat, are the rising costs and waning demand faced by this end of the hospitality sector. Fewer younger people are in the habit of going out drinking on a regular basis, meaning late-night operators need to come up with new ways to keep people frequenting their outlets.”

• Tue, 28 May 2024 at 11:52 am EEST

  ECB set to cut rates in June

  The European Central Bank (ECB) looks firmly set to cut interest rates next week, with inflation having fallen to 2.4%, close to the bank’s 2% target.

  A cut this month would make the ECB one of the first major central banks to lower rates in the current cycle, after the Swiss National Bank surprised markets with a cut in March.

  Currently, the ECB’s deposit facility is a record high of 4%, while its main refinancing operations is 4.5%.

  Philip Lane, the ECB’s chief economist, said in a speech in Dublin:

  “At our June meeting, if our updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission were to further increase our confidence that inflation is converging to our target in a sustained manner, it would be appropriate to reduce the current level of monetary policy restriction.”

• Tue, 28 May 2024 at 11:39 am EEST

  M&S to invest £30m in London stores

  

  Marks and Spencer (MKS.L) is set to invest a fresh £30m in its London stores over the next year, including the opening of two new foodhalls. The move will create 100 new jobs in the capital.

  It comes as profits for the year to March rose 58% to £716m, thanks to it attracting hundreds of thousands of new customers with a revamped clothing and food offer.

  M&S said it would revamp 12 stores in London and open two fresh-market style foodhalls in Sidcup and Friern Barnet.

  The stores to be modernised include those in Islington, Chancery Lane, Teddington and Blackheath.

  The Sidcup store should open later this month with the one in Friern Barnet coming in August.

  Sacha Berendji, operations director at M&S, said:

  “We cannot wait to bring the magic of M&S to even more customers across the capital. Expanding our presence in London is a key part of our growth strategy – our market share in food is higher here than any region in England and there is plenty of untapped potential.”

  Customers at the 12 renewal stores across London will benefit from bigger in-store bakeries, dedicated Flower and Wine shops. Each will also have lick & Collect facilities – 63% of M&S customers currently collect their online orders in-store.

• Tue, 28 May 2024 at 11:16 am EEST

  UK retail sales back to normal

  UK shop price rises returned back to normal levels, according to the British Retail Consortium (BRC) and research firm NielsenIQ.

  Prices rose at an annual rate of 0.6% in May, down from 0.8% in the previous month as after retailers cut the price of big purchases such as furniture and TVs.

  The decrease was led by non-food prices while the figures also showed that food inflation fell for the thirteenth month in a row to 3.2%.

  “This was helped by slowing food inflation, with fresh food inflation falling to its lowest level since November 2021,” said Helen Dickinson, chief executive of the BRC.

  “Meanwhile, ambient food inflation remained stickier, especially for sugary products which continued to feel the effects of high global sugar prices. In non-food, retailers cut furniture prices in an attempt to revive subdued consumer demand for big-ticket items, and football fans have been able to grab some bargains on TVs and other audio-visual equipment ahead of this summer’s Euros.”

• Tue, 28 May 2024 at 10:45 am EEST

  Asian stocks overnight

  Asian shares were lower on Tuesday, after rallying the previous session, as rising bets of an imminent European rate cut risk appetite ahead of some key inflation data.

  The Nikkei (^N225) slipped 0.1% on the day in Japan, while the Hang Seng (^HSI) ended flat in Hong Kong. The Shanghai Composite (000001.SS) was 0.5% down by the end of the session.

  It came as early morning data showed that Japan’s services PPI advanced 2.8% year-on-year in April, compared to the 2.3% expected, recording its fastest rise in nine years and higher than the revised 2.4% gain in March.

  Elsewhere, retail sales in Australia rebounded 0.1% in April but less than Bloomberg’s forecast for a 0.2% advance. This followed a 0.4% fall last month and a year-on-year rate just over 1% that has only really been lower during COVID in recent times.

  Wall Street stock futures firmed up ahead of the reopening of US markets after a bank holiday. S&P 500 futures rose 0.1% and Nasdaq futures gained 0.2% before a line-up of Federal Reserve speakers later in the day for the latest guidance on rate outlook.

• Tue, 28 May 2024 at 10:28 am EEST

  Coming up…

  Good morning, and welcome back to our markets live blog.

  After a long weekend, and holidays in both the UK and the US, we will be taking a look at what’s moving markets and happening across the global economy.

  Here’s a quick look at what’s on the agenda for today:

  • 7am: Trading updates: Pets At Home, Griffin Mining, Victorian Plumbing

  • 7am: German wholesale price inflation

  • 11am: CBI distributive trades survey for May

  • 2pm: US house price index for March

  • 3pm: US Consumer Confidence, US Pending Home Sales