LaToya Harding
FTSE 100 LIVE: Europe mixed and Wall Street down as US economy grows 3.2% in final quarter
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The FTSE 100 (^FTSE) and European stocks were a mixed bag on Wednesday, while Watt Street headed lower, as traders digested the latest data on US gross domestic product (GDP).
The US economy grew at a slightly lower rate than previously thought in the final three months of last year, rising at an annual rate of 3.2%, according to the Bureau of Economic Analysis' second estimate.
This was revised down from 3.3%.
"The update primarily reflected a downward revision to private inventory investment that was partly offset by upward revisions to state and local government spending and consumer spending," it said.
London’s benchmark index was 0.7% lower after a string of poor results
Wall Street opened lower with the S&P 500 (^GSPC) down 0.1%, and the tech-heavy Nasdaq (^IXIC) was almost 0.3% by the time of the European close
The Dow Jones (^DJI) also slipped nearly 0.3%
Germany's DAX (^GDAXI) rose 0.2% and the CAC (^FCHI) in Paris eked out a 0.05% gain
The pan-European STOXX 600 (^STOXX) was down 0.3% during the session
HMRC customer service at ‘all-time low’ as phone line wait gets longer
Country Garden, China’s largest property giant hit with winding up petition
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Over 10,000 sign petition to stop govt ‘snooping’ on pensioners’ bank accounts
Thousands have rallied together to stop the government being given new powers to inspect the bank accounts of millions of pensioners.
The ‘Do not let the government access information on pensioners' bank accounts’ petition has amassed over 13 thousand signatures in just over a week. When it reaches 100,000 it will be considered for debate in Parliament.
“Parliament should only give government the powers that it needs to fulfil its duties.
“We believe there is no need for the government to have the power to snoop on the bank accounts of pensioners,” Garry Graham, who started the petition, said.
“This potential intrusion must be stopped,” he added.
The new powers, which are being considered, would see banks handing over customer data to the Department for Work and Pensions (DWP) if there are concerns that the claimant does not meet the eligibility criteria for their benefits as the government ramps up fraud crackdown.
Concerns have been raised by senior MPs that the proposed legislation paves the way for surveillance and goes "step too far".
Gold prices edge lower
Silhouette of business man with gold bars (zoonar.com, Zoonar GmbH) Ricardo Evangelista, senior analyst at ActivTrades, said:
“Gold prices edged lower early Wednesday as traders awaited the release of two crucial sets of data later in the day.”
“The forthcoming GDP figures will provide a vital insight into the current state of the US economy, while data on the Fed's preferred inflation metric, personal expenditure, is also anticipated. However, market expectations suggest that neither dataset will offer any surprises.”
“Consequently, their impact on the Federal Reserve's hawkish stance, which has been keeping gold prices in check, is likely to be minimal. Given this scenario, gold prices are expected to remain within a relatively narrow range.”
“The Fed's hawkish stance is likely to act as a ceiling, with prices hovering around the $2,050 mark, while support is anticipated near the $2,000 level, as geopolitical tensions and economic uncertainty are expected to underpin demand for gold as a haven asset.”
Halfords shares plummet more than 30%
Halfords Superstore Preston Lancashie 2023 (steve harling) Halfords (HFD.L) issued a profit warning on Wednesday, citing "unusually mild and very wet weather" for its weak performance.
The bike and car parts retailer said that bike promotions, lower footfall and reduced sales of winter tyres and car cleaning products were also to blame.
It added that the cycling market has become more challenging and competitive, amid consolidation in the sector, with more promotions and more customers buying on credit, leading to weaker profit margins.
Halfords now expects profits before tax to fall to between £35m to £40m for the year to the end of March — this represents a downgrade of at least 17%.
It assumes the market will remain tough for the rest of its fourth quarter, including the peak Easter cycling period in March. In January, the firm estimated profits of between £48m and £53m.
Shares plummeted on the back of the news and are down 31% at the time of writing.
Analysts at Liberum said: “This is clearly another disappointing update and we expect the shares to suffer today.
“The negative earnings momentum continues to reinforce our long-held view that the group’s medium-term pre-tax profit target of £90m to £110m is very stretching.
“In the near term, we also note that inventory levels stand some 30%-50% higher than pre-COVID levels, which may bring further earnings pressure through the need to clear inventory.”
Aston Martin shares skid
Person holding cellphone with web page of British company Aston Martin Lagonda Global Holdings plc with logo. Focus on center of phone display. (Timon Schneider) Aston Martin (AML.L) shares skidded into the red on Wednesday, falling as much as 2%, as investors fretted over the cash flow and volumes despite the firm revealing that annual losses more than halved in 2023.
The luxury carmaker, which is fictional secret agent James Bond's car brand of choice, posted that operating losses came in at 22% to £111.2m, while revenues increased by 18% to £1.6bn. Analysts were expecting an adjusted pre-tax loss of £209m, according to a company-compiled consensus.
Aston Martin now expects positive cash generation in the second half of this year.
"While recognising the ongoing geopolitical and macroeconomic volatility and associated inflationary and supply chain uncertainties, our world-class teams continue to collaborate with our partners, seeking to minimise potential impacts on our operations," the company said in a statement.
It comes as the group completed the first deliveries of its next generation DB12 sports car and overcame production delays. Selling prices also reached record levels as it delivered its Valkyrie models and other special edition cars.
Hargreaves analyst Sophie Lund-Yates, said: "Aston Martin is pumping reams of cash into marketing in a bid to help position itself at the ultra-luxury end of the spectrum. This pivot was never going to come cheap."
Aston Martin shares are down more than 90% over the last five years and have fallen by 18% since the start of 2024.
Stamp duty bills reveal huge North-South divide
In London, only 4% of homes for sale are exempt from the current stamp duty charges for all buyers, compared to 71% in the North East, according to Rightmove.
The property site is calling for a stamp duty reform ahead of the spring budget amid a stark stamp duty North-South divide
Less than a third of properties for sale in London are currently exempt from stamp duty for first-time buyers, compared with nine in 10 homes in the North East.
Homes in London have been traditionally more expensive than the rest of the country due to increasing demand.
People must pay the tax on all properties over £250,000 or £425,000 for first time buyers.
The charge ranges between 5% and 12% of the purchase price, depending upon the value of the property bought.
The property portal has called for the government to implement policy changes in next week's budget to help people move home.
Watch: How does inflation affect interest rates?
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