- FTSE 100 and 250 open nearly two hours late after software issue
- The blue-chip FTSE 100 hit a six-month low on Thursday, closing 1.13pc down, after China said US tariffs had broken a “consensus” between the countries
- Asian shares gain ground after late rally by S&P 500 and Dow on Thursday
- Ryan Bourne: Populism on the Left and Right is poisoning economic discourse
The FTSE 100 bounced back from a six-month low on Friday, after a glitch delayed the start of trading across the UK’s top stock indices.
The London Stock Exchange delayed markets opening by almost two hours, after a technical issues was identified. It was the longest outage on the bourse in eight years, and the second in fourteen months.
When trading was able to resume, the blue-chip index quickly recovered some of Thursday’s drop. It had dropped to its lowest closing price since February as resurgent trade worries, Brexit concerns and temporary stock price discounts all added pressure.
Wrap-up: Europe ends upbeat after a roller-coaster week
That really could have gone either way: with little economic news to speak of, further strong words China or the White House could have easily moved markets. As it happens, gains stuck.
With little reason to believe things will suddenly flip in the next couple of weeks, today might be seen as traders “buying the dip” — grabbing some shares at a discount and hoping to eke out some of the climb back from Wednesday and Thursday’s plunges.
The rush to safe haven assets softened, with some evidence of selling off. The potential quiet of August (still waiting for that) could give traders a chance to think long-term.
If precedent holds, Wednesday’s yield curve flip was bonds firing the starting gun on the race to recession. With negative yields abounding in that market and gold already up, long-term equities strategies might involving judging which equities are ready to weather the storm.
That’s all from me this week. Thank you to everyone who has followed along. See you on Monday — follow Telegraph Business on Twitter for the latest!
Round-up: US faces one-in-three chance of recession, Glasgow shipyard set for nationalisation, and traders left hanging by London Stock Exchange error
With European trading at a close now, here are three stories you should read from this afternoon (including a wrap-up of this morning’s trading worries):
- US economy faces one-in-three chance of a slump as ‘spectre of global recession’ rises: The US economy faces a one-in-three chance of sliding into recession in the next 12 months, credit ratings agency Standard and Poor’s has warned, as a series of economic signals flash red.
- Struggling Glasgow shipyard to be nationalised by Scottish government: The Scottish government has struck a deal to nationalise struggling Glasgow shipyard Ferguson Marine to save it from collapse.
- Traders left twiddling thumbs after London Stock Exchange’s worst outage in eight years: London traders were stuck twiddling their thumbs on Friday morning after a glitch left them unable to buy and sell shares in the UK’s largest companies.
FTSE closes 0.7pc up
Despite a slightly unconventional start to the day, the FTSE got its bounceback, managing to close 50 points up at 7,117 — a 50 point gain. The pound’s gain is bound to have blunted that figure, but it’s a solid-enough lift off Thursday’s six-month lows.
Following the recent trend, European indices found gains more forthcoming then their London peers, with German’s DAX putting in a strong performance at 1.21pc up after reports the German government might be preparing to loosen its fiscal belt slightly.
Sterling set for best week against euro since January
It’s a small bounce-back from a deep low, but a full week of day-on-day growth means that the pound is set for its best week against the euro since January.
Hopes that a no-deal Brexit can be avoided have seemingly helped the currency, with extra support from better-than-expected retail sales data. It’s still a good way below where it stood in late July
Adding to shift was pressure on the euro itself, with the currency hit by a combo of poor eurozone growth data, German recession fears and increasing expectations that the European central bank is about to engage in some serious stimulation.
CMC Markets’ David Madden said:
At the start of the week, dealers were fearful of a no-deal Brexit, and to an extent those fears are still circulating, but the respectable economic reports from the UK this week helped the pound.
Analyst: Trading delay ‘an embarrassment for LSE’
City Index’s Fiona Cincotta has not minced words over this morning’s stock exchange opening delay. She writes:
This is the second glitch in two years, the last one was a year ago and saw the FTSE open 1 hour late. There is no hiding from this one, the two-hour delay to open is an embarrassment for LSE and raises plenty of questions over the group’s technology. The timing is pretty horrendous for LSE too, just weeks after it sealed a deal to buy Refintiv, in its quest to become a global markets and information powerhouse. LSE’s reputation as one of the most reliable stock exchanges in Europe is starting to be questioned.
Germany ready to run a budget deficit if recession hits — Der Spiegel
Euro stocks have lifted to session highs in the past few minutes, following a report in German periodical Der Spiegel that Finance Minister Olaf Scholz and Chancellor Angela Merkel are prepared to run a deficit to stimulate Europe’s biggest economy if it enters recession.
The decision would mean abandoning the country’s prized ‘black zero’ — its policy of strictly avoiding budget deficits. Reuters reports:
Fears are mounting that Europe’s largest economy could slide into a recession after slumping exports due to a global slowdown, tariff conflicts and Brexit fears translated into a contraction of 0.1pc in the second quarter.
Germany has had a balanced budget since 2014, a fiscal rule introduced by former conservative finance minister Wolfgang Schaeuble and stuck to by his Social Democrat successor Olaf Scholz.
German Chancellor Merkel and FinMin Scholz are ready to run a budget deficit if Europe’s largest economy goes into recession, Spiegel reports, citing sources. Shortfall in tax revenue from econ slump could be offset by new debt. pic.twitter.com/rN7nPACGHh— Holger Zschaepitz (@Schuldensuehner) August 16, 2019
Would be surprised if Germany abandoned "black zero" on the back of what would be a technical recession. Its hardly the type of event that could shift that sort of dogma. The bar is way too low..— Michael Hewson ���� (@mhewson_CMC) August 16, 2019
Hopeful pound holds FTSE back
The FTSE is currently about 0.6pc up, still trailing its European peers. A big part of the drag is coming from sterling, which is weighing on the exporter-heavy blue-chip index. The pound has been performing strongly all day, having climbed for several days as traders grows more optimistic that a no-deal Brexit can be stopped.
Spreadex’s Connor Campbell said:
The UK index could have perhaps kept pace with its peers if it wasn’t for the pound, which is desperately clinging to its hopes that a rebellious cross-party group of MPs can derail Boris Johnson’s no-deal Brexit plans. The reaffirmation that the Lib Dems are willing to work with Labour by the former’s leader Jo Swinson aided sterling in rising 0.3pc against the dollar and 0.5pc against the euro. The currency has had quite the week against the latter, moving from a 10-year nadir on Monday to a 2-week peak of €1.095.
- You can keep up with the latest political updates on our politics live blog: Brexit latest news: Lib Dem leader claims Ken Clarke and Harriet Harman are willing to lead caretaker government
US consumer sentiment hits lowest level since January
Closely-watched data from the University of Michigan shows US consumer sentiment has fallen to its lowest level in seven months, hitting 92.1 compared to July’s figure of 98.4. Analysts had expected a score of 97.
That’s bad news for the US economy given consumer spending has unpinned recent growth. The drop many reflect worsening sentiment over the US’s trade war with China, and apprehension that American might be on the (possibly long) road to recession.
The UoM report found that tariffs particularly affected people looking to buy appliances and home electronics.
Short-seller hires ex-CIA spooks in battle with Burford Capital
The heated clash between Burford Capital and Muddy Waters Research, the US hedge fund that launched a bear attack on it, has taken a spook-y twist.
Muddy Waters has apparently hired an agency staffed by former CIA agent to prove the litigation fund (whose shares it shorted before releasing a scathing report last week). My colleague Harriet Russell reports:
The US firm led by Carson Block claimed behavioral analysis run by a third-party agency, Qverity, had shown that Burford’s management was “deceptive in their written and verbal responses” to its initial report last week.
Qverity is run by former US Central Intelligence Agency (CIA) staff who co-authored the books “Spy the Lie” and “Get the Truth”. Mr Block is also a published author, having co-written "Doing Business in China For Dummies" more than a decade ago.
- You can read her full report here: Muddy Waters hires ex-CIA spooks to challenge Burford
US stocks rise at open
As expected, New York has risen at open. The Dow Jones Industrial Index is up 0.8pc, while the S&P 500 and Nasdaq have climbed 0.9pc and 1pc respectively.
Wall Street expected to join rally
Futures trading (essentially bets on how the market will perform) suggests US indicies will rise when they open in just over half an hour, with the Dow Jones Industrial Average set to gain 229 points on current numbers — just under 1pc.
New house builds data released a few minutes ago shows that new home construction fell by unexpectedly in July, dropping 4pc to an annualised rate of 1.19m. It’s not a shocking miss, and sentiment data suggests the US construction industry is feeling pretty upbeat about prospects, but adds to mixed overall picture for the US economy.
Any and all new economic data becomes ammunition in the very-public war between Donald Trump and the Federal Reserve, with the central bank position’s position that the US economy is too strong to need stimulation apparently vindicated by several bits of upbeat recent news.
Pound extends gains
The pound is continuing to performing strongly today, up about 0.5pc on the day against the dollar, and 0.8pc against the euro. It continues several days of gains, and means sterling has recovered pretty much all of its losses against the euro this month.
The sharpest recent drop was right at the end of July, however, so there’s still quite a push left for the reversal to seem like it has stuck.
Round-up: British Steel buyer plans to boost output, energy firm claims government discriminates against onshore wind farms
It’s a quiet day across the markets today, but there’s been good news for British Steel employees, with news that the preferred bidder to take over the collapsed industrial giant wants to expand output. Meanwhile, an energy company has said the government’s renewables rules discriminate against onshore wind.
- Turkish buyer of British Steel plans to boost output as 4,500 jobs saved: The future of 4,500 British Steel workers looks secure with Turkish buyer Ataer Holdings revealing plans to boost output at the stricken business.
- Government discriminates against onshore wind farms, energy company alleges in legal spat: An onshore wind company is taking legal action against the Government in a row over how it auctions off contracts to support low-carbon energy production.
Full report: Hogg quits at Cathay Pacific amid Hong Kong pressure
Here’s our full report on Rupert Hogg’s sharp exit at Cathay Pacific. My colleague Jack Torrance reports:
The row highlights the difficult choice faced by Hong Kong businesses concerned about China’s tightening grip on the former British colony.
Swire [Cathay Pacific’s owner] threw its weight behind the Chinese Government and Hong Kong’s embattled chief executive Carrie Lam earlier in the week, declaring: “We share the vision of the Chinese Central Government for a vibrant Hong Kong within an integrated Greater Bay Area which will bring future prosperity and opportunity to the people and businesses of Hong Kong.
- You can read his report here: Cathay Pacific boss Rupert Hogg falls on sword amid pressure over Hong Kong protests
OPEC strikes pessimistic outlook on oil
Opec, the cartel of oil-producing countries, has described its outlook for the global oil market as “somewhat bearish”, following a pretty substantial fall in the black liquid’s price over recent weeks.
The group, which is responsible for about a third of the world’s oil output, increased estimates for demand in 2019 and 2020, but warned prices might feel pressure. A global slowdown is likely to impact demand for oil.
Pressure is rising on Saudi Arabia, Opec’s de facto leader, to try to support oil prices, but thus far attempts to drive down supply has had limited impact on the commodity’s market value.
LSE pins opening delay on ‘technical software issue’
The London Stock Exchange has confirmed that this morning’s delay was caused by a software issue, but hasn’t gone into much more detail. Here’s its full statement:
London Stock Exchange experienced a technical software issue this morning that affected trading in certain securities, including FTSE 100 and FTSE 250 stocks.
Following resolution of the issue regular trading in all securities commenced at 09.40.
The delay is certainly a headache for newish LSE boss David Schwimmer, who has been trying to focus the exchange operator on outwards expansion.
Trump’s Greenland ambitions: Can you buy a country?
Before the London Stock Exchange conked out this morning, we’d already had one of the strangest stories in recent days: Donald Trump is reportedly interest in buying Greenland (see 7:58am update).
The revelations, which came just a couple a weeks before Mr Trump is due to visit Denmark (of which Greenland is a territory), are a weird twist for the world’s biggest island, where many of the 55,877 residents already harbour dreams of independence.
Politics aside, however, it prompts a bigger question: Could Donald Trump buy Greenland?
Telegraph Money have explored how a deal could look. They write:
Any deal is likely to cost the American government billions of dollars, although it is unclear how an outright purchase would be structured. The agreement of both the Danish and Greenlandic governments would likely be required.
Experts believe a more likely outcome is that the American government will agree to an extensive investment programme in the island to secure it as a military base and exploit its natural resources.
- You can find out everything you might want to know on this (frankly bizarre) topic here: Trump eyes Greenland: can you buy a country — and how can investors get a piece of the action?
FTSE pares back gains after bullish open
The FTSE 100 was 0.4pc up as of about 15 minutes ago, trailing European indices slightly as it feels the pressure of a strong pound, which tends to weigh on the exporter-heavy index.
Gold miner Fresnillo, which has done well from gold’s gains amid a global rush for safety in recent weeks, is the biggest faller among blue-chips, down about 0.2pc currently.
The FTSE 250 is up about 0.35pc, with KAZ Minerals rebounding after a surprisingly-large drop yesterday.
LSE says expired GTD orders have been cleared
The London Stock Exchange says:
Expired orders previously visible in the Order Books have now been removed.
That should mean everything is fully back to normal (see 10:39am update), but we’re still awaiting confirmation as to whether that was the original issue.
Cathay Pacific confirms leadership changes
Airline Cathay Pacific has confirmed that chief executive Rupert Hogg has resigned, following Chinese media reports. Chief customer and commercial officer Paul Loo is also out.
Mr Hogg will be replaced by Augustus Tang, while Mr Loo will be replaced by Donald Lam. Mr Tang and Mr Lam are both “highly-experienced executives with long careers at Cathay Pacific”, the company said.
Chair John Slosar said:
Rupert Hogg and his team executed the three-year Transformation Programme which has been important to Cathay Pacific’s recovery and provides a strong platform for continued development. However, recent events have called into question Cathay Pacific’s commitment to flight safety and security and put our reputation and brand under pressure. This is regrettable as we have always made safety and security our highest priority.
Mr Slosar said the airline is “fully committed to Hong Kong under the principle of ‘One Country Two Systems’ as enshrined in the Basic Law.”, adding: “We are confident that Hong Kong will have a great future.”
This appears to be a major capitulation by the airline, which was forced into a dramatic about-turn earlier this week over its stance on disruption in Hong Kong: Cathay Pacific flies into a storm as Hong Kong protests rage
Bizarrely, Cathay's stock already closed up for the week (?) after being down as much as 11% on Tuesday— Mike Bird (@Birdyword) August 16, 2019
Eurozone trade balance narrows more than expected
The eurozone’s seasonally-adjusted trade surplus narrowed slightly more than expected in June, falling from a revised figure of €19.6bn to €17.9bn, below analysts’s expectations (as polled by Bloomberg) of 18.5bn.
Pantheon Macroeconomics’ Claus Vistesen said temporary weakness in France and Germany had led the drop:
A 1.2pc month-to-month dip in exports offset the boost from a 0.6pc decline in imports, reversing the rebound in May. Early Q2 GDP numbers suggest that net exports were a drag on growth in Q2, mainly due to weakness in France and Germany, but we suspect that the French data will be revised a bit higher in due course.
A graph produced by Pantheon “shows that the EZ trade surplus appears to be stabilising around a trend just under €20B on a monthly basis”:
‘Good until date’ errors may offer clue to LSE outage
There’s still no full statement from the London Stock Exchange on what knocked markets this morning, but its updates have focus on a problem with its GTD order. GTD means “good until date”. Capital.com writes:
GTD stands for 'good 'til day (or date)' and is a type of order that is active until its specified date, unless it has already been fulfilled or cancelled.
If they haven't been executed, all orders are cancelled at the end of the trading day on the date specified on the order, so GTD orders are used to cover longer periods of time.
So what goes that have to do with the delay?
The LSE said:
GTD orders expected to expire this morning have remained in the system. These orders cannot be traded against and are still being advertised via Market Data. This has caused crossed order books.
This might have led to clashes, and resulted in things behind bought or sold by accident if brokers operated on outdated information.
The LSE had promised further details at 10:30am, but has now said it is continuing to probe issues. More at 10:50am, apparently.
Pound strengthens after ECB board member teases further stimulation, knocking euro
Sterling is accelerating its climb-back, having rallied in recent days as discussions of how a no-deal Brexit could be avoided intensified.
It’s up around 0.2pc against the dollar, and 0.5pc against the euro — the latter climb is being powered by a weakening in the euro, prompting by some very dovish talk by European Central Bank governing council member Olli Rehn, who yesterday told the Wall Street Journal that it is better to “overshoot” on stimulus. The ECB is set to unveil a eurozone stimulus package next month.
The pound’s jump is good news for holidaymakers, but the currency is still far below July levels, with market sentiment declining as fears of a no-deal Brexit intensify.
While we’re discussing infrastructure failures...
...here’s more on last Friday’s blackouts. National Grid has said the blame for the widespread outage should be shared in a report to energy regulator Ofgem. My colleague Michael O’Dwyer reports:
It is not clear whether Ofgem will publish the report, which is likely to lay part of the blame for the disruption on power generators and train operators, according to a report in The Times.
The report is expected to say that the failure of two power plants within seconds of each other was one of the reasons for the major blackout, which was one of the worst this decade.
- You can read his full report here: Blackout blame should be shared, National Grid tells Ofgem in report
Cathay Pacific boss Rupert Hogg resigns — Chinese media
Rupert Hogg, the British-born chief executive of airline Cathay Pacific, has reportedly announced his intention to resign, according to Chinese state broadcaster CCTV. The airline was dragged into controversy over its actions in relation to protests in Hong Kong, and its shares have been experiencing a lot of turbulence lately.
Trading resumes, but reasons for delay remain unclear
Things appear to be ticking along as expected, but we’re still awaiting an explanation from the London Stock Exchange on why trading didn’t commence at 8am.
It could be worth watching shares in London Stock Exchange Group (itself listed on the FTSE 100) today, in case today’s issues knock investor confidence in the group — which is trying to position itself as a major player in financial data with its Refinitiv tie-up.
FTSE 100 opens up
The blue-chip index has quickly hit around 0.8pc at open, just behind European indices.
Signs of life expected shortly...
The LSE says:
Instruments on partition 1 and 2 uncrossed and transitioned to regular trading.
Here we go!
Throwback Friday: 100-minute trading delay worst since 2011
Today’s delayed open — with trading expected to kick off at 9:40am — will set an eight-year record, the worst outage since trading was suspended until just after noon in February 2011.
Here’s our report from then:
In that instance, trading wasn’t extended to compensate for the delay — we don’t yet know what will happen today.
Breaking that down...
...that update means we should expect trading to have fully re-commenced by 10:10am, with auction calls, which usually occur before markets open, now underway. The LSE says:
Instruments on partition 1 and 2 are now in an opening auction call.
Partions 1 and and 2, as a reminder, cover the blue-chip FTSE 100 and mid-cap FTSE 250. The delayed open still makes this the biggest FTSE 100 and 250 outage since 2011.
Breaking: FTSE trading should partially re-commence shortly
The LSE says:
All GTD orders on partition 1 and 2 have been expired.
Instruments on partition 1 and 2 will resume in an opening auction call at 09:20 and will uncross at 09:40. EDSP auction for FTSE100 securities will commence as per today’s standard schedule at 10:10. Users that receive rejection messages, are advised to log out their trading sessions and log back on to the relevant gateways again.
9:15am comes, and goes...
...no update from the LSE.
Previous LSE errors have been prompted by technical glitches
A quick reminder from the history books (i.e., after the crash last June):
Technical glitches have been blamed for previous outages with investors last left in limbo by a four-hour delay to trading in 2011, after the LSE switched from its Turquoise system to a new platform called MillenniumIT. The shutdown came on the new system's 10th day of operation.
Markets.com’s Neil Wilson writes:
These things happen — the last delayed start to trading was only a year ago. Technical glitches are inevitable, frustrating as it is for everyone.
FTSE futures are trading – and our fair value estimate suggests the cash market will open up strongly around 7115.
Three things to read while you wait for markets to open
Stuck at your desk, refreshing the LSE status update page?Here’s three bits of in-depth reporting by the Telegraph Business team to fill the time until markets sort themselves out:
- Why premium and luxury car brands have more reasons to stay in Britain than to go
- Yield curve inversion: Are we now heading for recession — and is it time for investors to panic?
- How Salvini’s reputation for riling Brussels and the markets could harm Italy’s economy and the euro
DAX gains cap 1pc
Fear of missing out might be settling in among London traders, as European bourses enjoy healthy gains this morning. Germany’s DAX is up more than 1pc currently. It has now been a full hour, and the FTSE 100 and 250 are not open.
FTSE 350 still not trading due to glitch pic.twitter.com/ujm8SmeRoa— Garry White (@GarryWhite) August 16, 2019
LSE : No update until 9:15am
Latest from the London Stock Exchange:
Investigation continues, next update at 09:15
Meanwhile, in Westminster...
...news that parties opposing a no-deal Brexit might be preparing to form a caretaker government has cheered sterling slightly in recent days, with the pound recovering some of the losses it suffered in recent weeks.
- You can follow the latest on our politics live blog: Brexit latest: Lib Dem leader claims Ken Clarke and Harriet Harman are willing to lead caretaker government
Naturally, journalists and traders are bemused...
traders waiting for the LSE to finally open FTSE for trade like...— Joumanna Bercetche (@CNBCJou) August 16, 2019
“technical issues” pic.twitter.com/TxdXE9NAo9
LSE CEO this morning:— GeordiePhil (@GeordiePhilUK) August 16, 2019
“Hey guys it’s Pizza Friday how did the opening bell go......” pic.twitter.com/0vR616lpMP
LSE: Technical issue impacting some securities trading
Financial news tracker LiveSquawk tweets:
LSE Spokesperson: Technical Issue Is Affecting Trading In Some Securities, No Further Details Available— LiveSquawk (@LiveSquawk) August 16, 2019
And here’s the BBC’s Sean Farrington:
The London Stock Exchange said it will provide updates as soon as it has any further information on the suspension of the FTSE 100 and FTSE 250.— Sean Farrington (@seanfarrington) August 16, 2019
The last significant delay to the opening was in June 2018, opening at 9am instead of 8am due to a software "technical issue" (@PA)
As a reminder, the FTSE was expected to bounce back from a six-month low at opening time this morning, after an improvement in sentiment and the release of weight from Shell shares going ex-dividend. More on that here.
Second delayed open in just over a year
As a reminder, this is the second time the FTSE has faced a delayed open in the fourteen months — with a blackout last June the first for seven years.
Here’s what we reported then:
The start to trading on Europe’s largest stock exchange suffered a one-hour delay on Thursday morning after “a technical software issue” stopped investors from trading on its pre-open auction system, the exchange's first major outage since 2011.
Here’s what the LSE is saying today:
International Order Book also down
As well as the FTSE 100 and 250, whatever is going on at the London Stock Exchnage has also led to a delayed open for the International Order Book.
The IOB is list of financial purchases and sales with a focus on Central and Eastern Europe, which the company says “enables investors to unlock the potential of some of the world’s fastest growing markets through a single central electronic order book.”
European indices recover as FTSE stays on ice
The FTSE still hasn’t opened, so it’s missing out on a muted recovery across the rest of Europe. The contient-wide STOXX 600 is about 0.25pc up.
FTSE failure to launch— Neil Wilson (@marketsneil) August 16, 2019
LSE says FTSE100 and FTSE250 open currently delayed— Michael Hewson ���� (@mhewson_CMC) August 16, 2019
FTSE 100 and 250 open delayed
The LSE has now confirmed the FTSE 100 and FTSE 250 open has been delayed. It said:
London Stock Exchange Partition 1 and Partition 2 (FTSE 100 & 250 securities) open delayed. Partition 3 currently operating as normal.
I’ll bring you more details as soon as we have them.
Potential problem with London markets
The London Stock Exchange has put out a system status message this morning:
London Stock Exchange is currently investigating a potential Trading Services issue.
Further information will be provided by 7:50
It’s almost 8am, so that may cause some early disruption to trading.
Trump ‘wants to buy Greenland’
One to file in the ‘headlines you never expected to see’ category: Donald Trump has reportedly expressed an interest in buying Greenland, according to a Wall Street Journal report. The paper says the idea of buying the icy autonomous Danish territory has “captured the former real-estate developer’s imagination”, with the President raising the idea with “varying degrees of seriousness”.
Asian markets rebound
Asian shares found some footing on Friday after a turbulent week as China hinted at more support for its economy, amid growing expectations of aggressive stimulus from all the major central banks.
Chinese authorities said Beijing would roll out a plan to boost disposable income. The announcement was short on detail but lifted sentiment among investors.
Hong Kong's Hang Seng has risen 1pc while the Shanghai Composite Index was up 0.5pc. Tokyo's Nikkei 225 gained 0.1pc.
Agenda: Five things to start your day
Good morning. Today should be a fairly quiet day as there is no major economic news or UK company reports scheduled. However, it will be interesting to see if London’s blue-chip index can recover some of the ground it lost yesterday.
The FTSE 100 reached its lowest level since late February yesterday after China said the US had “seriously violated” a trade pact between the two countries and hopes that a no-deal Brexit can be avoided raised the pound.
5 things to start your day
1) Workers are in the grip of a “cradle to grave” crisis in living standards as swathes of the population fear for their jobs, earn too little to save month-to-month and are struggling to put away money for a decent pension, top analysts have warned. Meanwhile banking data showed home buyers taking bigger mortgages than ever before.
2) Litigation funder Burford Capital has bowed to pressure and promised to shake up its boardroom in the wake of a blistering ‘bear attack’ on its shares by US short seller Muddy Waters last week. Burford’s finance chief Elizabeth O’Connell, who is married to the company’s boss Christopher Bogart, will immediately move into the role of chief strategy officer.
3) Turkish investor Ataer Holding has been selected as the preferred bidder for British Steel, safeguarding thousands of manufacturing jobs, with an announcement due later today. British Steel collapsed into insolvency in May.
4) Why premium and luxury car brands have more reasons to stay in Britain than to go. In the final part of a three-part series on the future of the UK automotive industry Alan Tovey looks at the likely futures of the premium and niche manufacturers who have bases in the UK.
5) Britain is set to dodge recession as enthusiastic shoppers boost growth: Retail sales volumes rose 0.2pc in July compared with June, defying expectations of a slump in purchases. Sales also rose 3.3pc compared with July 2018, well ahead of the predicted 2.5pc increase.
What happened overnight
Asian markets were jittery on Friday as a modest rebound in US equities failed to ease fears over the US-China trade war and its impact on the world economy.
Fears of a global recession and a drawn-out trade spat between the world's top two economies saw the Dow suffer its worst one-day fall of 2019 on Wednesday.
Although US stocks recovered slightly on Thursday, reassured by strong US retail sales and Walmart earnings, investors remained anxious, seeking out safe havens in the form of Treasury assets and gold, which continued to hover above the $1,500 on ounce level.
In Asia, markets edged higher despite concerns over global trade tensions. Hong Kong rose 0.4pc while Shanghai was up 0.5pc. Tokyo edged up 0.1pc, but Singapore and Seoul shed 0.8 percent.
Coming up today
No major UK business or economic announcements scheduled.
10:00am: Balance of trade (EU)
13:30pm: Housing starts (US), building permits (US)