Market report

Wall Street lower as US inflation hits 40-year high

Wall Street
US stocks were lower

The three main benchmarks on Wall Street were lower on the back of data showing inflation hit 7.5% in January, its highest level in 40 years and exceeding a consensus forecast of 7.3%.

Investors are braced for the US Federal Reserve to use aggressive measures to combat rampant price growth and speculation is rising that the central bank could order its first 50 basis-point interest rate rise in more than two decades.

Higher food, electricity, and housing costs were amongst the biggest contributors to the hike.

The broadly based S&P 500 index fell 1.8%, while the technology-focused Nasdaq closed down 2.1%.  The Dow Jones Industrial Average  fell 1.47%.

Britain’s blue-chip FTSE 100 index finished the afternoon session at 7,672, up 28 points, or 0.38% while

AstraZeneca added 1.6% after saying sales shot up in 2021, helped by its Covid-19 vaccine. Revenue for 2021 rose 41% to $37.42 billion.

Unilever fell 1.3% as the under-fire consumer goods firm launched another large share buyback programme and promised to make no major acquisition in the “foreseeable future” after its failed tilt at the GSK Consumer Healthcare business.

On AIM, Omega Diagnostics confirmed it is considering a share placing to raise £5 million and an accompanying open offer to raise a further £2 million.

The shares fell 27% to 7.25p. Full story here

7.10am: Menzies suitor sets out case

National Aviation Services has today claimed that its proposed tie-up with John Menzies will provide a degree of protection as airlines look to contain costs with their airport service providers.

NAS believes that its improved possible cash offer at 510p per share – a 76% premium on the closing price on 2 February – represents a “compelling opportunity for shareholders to realise full value for their investment in cash.”

Shares John Menzies soared by 43% after it revealed the approach.

Full story here

7am: Pru CEO stepping down

Prudential said group CEO Mike Wells intends to retire from at the end of March and that his replacement will be based in Asia, further consolidating the company’s focus.

Mr Wells leaves after seven years in the role and having first joined the Group in 1995. He executed two strategic demergers and accelerated the development of an Asian shareholder base through a successful equity issuance on the Hong Kong Stock Exchange.

Mark FitzPatrick, currently group CFO and COO, will become Interim Group CEO when Mr Wells steps down. He has asked the board not to consider him for the permanent group CEO role.

7am: LendingCrowd raises £100m

LendingCrowd, the Edinburgh-based fintech SME lending platform, has closed a funding deal with Barclays Bank and a large global investment firm to support SMEs across Britain as they recover from the coronavirus pandemic and return to growth.

The funding will be delivered via the British Business Bank’s Recovery Loan Scheme (RLS), for which LendingCrowd has now been accredited as a lender, and also through its popular term lending product.

Full story here

Global markets

US tech stocks were helped by solid growth in subscriber numbers for Disney’s streaming arm Disney+ suggesting the disappointing Netflix performance recently might be company-specific and not a general trend.

The Nasdaq Composite was up over 2% which should bode well for the UK’s FTSE 100 tech proxy Scottish Mortgage Trust.

US inflation numbers are announced later, the last before the Federal Reserve’s next meeting when it is expected to follow the Bank of England and start raising interest rates.

Japan’s Nikkei advanced 0.42% and South Korea’s Kospi rose 0.21%.

The Shanghai Composite in China fell 0.15% while Hong Kong’s Hang Seng slipped 0.19%.

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