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Wednesday Update

Daily Business Live: SPFL verdict; fashion chains fail; Big 4 cut

10.30pm: US hit by economic woes

Dismal US economic and first-quarter earnings reports added to concerns over the extent of damage from the coronavirus outbreak dragging down on the Wall Street indices.

Falling earnings at the banks contributed to the Dow Jones Industrial Average sliding by 445.41 points, or 1.86%, while the S&P 500 lost 62.7 points, or 2.20%, and the Nasdaq Composite dropped 122.56 points, or 1.44%.

Retail sales plunged 8.7% in March and manufacturing output dropped by the most in more than 74 years.

6.30pm: SPFL verdict

Scottish football free

Dundee United, Raith Rovers and Cove Rangers have been declared champions – and a taskforce is to look at expanding the top flight – after Dundee had a change of heart and backed SPFL plans to end the season.

The agreement means Partick Thistle and Stranraer will be relegated.

The SPFL will also explore league reconstruction. Hearts chairman Ann Budge and Les Gray of Hamilton Academical will lead a task force, and will be joined by “other football figures to provide input and support”.

Full story here

5.15pm: Fashion chains fail

High Street fashion chains Oasis and Warehouse have fallen into administration with 200 immediate job losses.

A further 1,800 staff across the shops, concessions and head office will be furloughed on 80% of pay.

The brands will continue to operate online in the short term, while the administrators from Deloitte attempt to find a buyer for to the brands.

The owner, Icelandic bank Kaupthing, had been in talks to sell the businesses before the coronavirus crisis.

5pm: London close

The London market suffered a torrid day as investors fretted over economic forecasts, the falling oil price and weak data from the US. The FTSE 100 closed down 193.66 points (3.34%) at 5,597.65

3.40pm: Deloitte and EY earnings cut

UK partners in big four accountants EY and Deloitte are likely to see a 20% earnings cut this year as they seek to protect their balance sheets and jobs during the Covid-19 crisis.

PwC has already said it will cut partner pay by 20%, while KPMG told its partners that they could expect an average profit hit of 25%.

Grant Thornton asked its staff to accept a 40% pay cut to help avoid redundancies across the firm.

2.40pm: Tilney deal doubt

The merger between Tilney and Smith & Williamson has been delayed by the coronavirus pandemic and may not go ahead.

Smith & Williamson shareholder AGF Management told the Toronto Stock Exchange today that the deal would continue with a revised structure with the targeted closing date pushed back until the second half of the year.

AGF said it was not certain the deal would complete.

2.30pm: US markets plunge

Traders on Wall St (pic: NYSE)

The Dow Jones Industrial Average plunged by 550 points at the open after a record downturn in quarterly retail sales.

The S&P 500 and Nasdaq opened the day down by about 2%.

There was a 50.5% decline in clothing sales and a 26.5% drop in sales at restaurants and bars.

Weak bank earnings also weighed on markets, with Bank of America reporting a decline in profits of 45% for the first quarter. JPMorgan Chase and Wells Fargo also released poor quarterly earnings this week, as banks put aside billions of dollars as provisions for bad loans.

Airline shares were among the few risers after 10 of the country’s largest airlines, including American, Delta and United, secured a slice of the $25 billion Payroll Support Program.

2pm: Markets – dividends

The FTSE 100 slipped further into the red as more companies pulled their dividend payouts, taking the total to 32.

The index fell 170.94 points (2.95%) to 5,620.37 as as investors braced themselves for the corporate first quarter earnings season and crude oil remains depressed.

Russ Mould, investment director at AJ Bell, said: “Results are likely to range somewhere between horrible and horrendous, although to some extent the market is already looking beyond these historic numbers.”

10am: Green light for HS2

HS2 train

Work can resume on HS2, after back to work approval was given to firms contracted to design and construct bridges, tunnels, embankments and viaducts for phase one between London and Birmingham.

HS2 Minister Andrew Stephenson said the Government’s main priority is combating the spread of coronavirus but “we cannot delay work on our long-term plan to level up the country”.

He added: “This next step provides thousands of construction workers and businesses across the country with certainty at a time when they need it, and means that work can truly begin on delivering this transformational project.”

Four joint ventures were awarded main works civil contracts worth a total of £12 billion for phase one of HS2 in July 2017.

Shares in Costain jumped by a third on the news that a notice to proceed has been issued.

8.15am: Market open

The FTSE 100 opened lower at 5,751.94 −39.37 (0.68%) following a worrying forecast from the Office for Budget Responsibility of a sharp slump in the economy.

7am: Beeks acquisition

Gordon McArthur

Beeks Financial Cloud Group, the Glasgow-based cloud computing and connectivity provider for financial markets led by Gordon McArthur, has acquired Velocimetrics, a UK-based network monitoring and trade analytics software company.

Full story here

Quiz reopens online ops

Glasgow-based fashion retailer Quiz has reopened its online operations. It said it is now fully functional, albeit offering standard delivery services only.

The group’s distribution centre is reopening and will operate in strict accordance with all government and health authority guidance.

Operations will be undertaken by employees who are willing and able to return to work safely, and the group has significantly reduced the number of employees working in the centre at any given time to enable strict social distancing.

A number of additional safety measures have also been implemented, including deep cleaning and the provision of personal protection equipment in order to keep its employees safe and protected.

6.30am: Jobs survey

Empty-shop-Glasgow-Buchanan-Street

Scottish firms shed jobs at the fastest rate for more than 20 years last month amid “shockwaves” from the coronavirus pandemic, according to a survey.

The services sector, which accounts for about three-quarters of the economy, reported its steepest drop in activity since the Royal Bank of Scotland Purchasing Managers Index (PMI) began in 1998.

Meanwhile, manufacturing output fell at its sharpest rate since early 2009.

6am: Business support

Kate Forbes

A further £220 million of grants are being made available for businesses – including the recently self-employed – to help them deal with the ongoing impact of the coronavirus (COVID-19) outbreak.

The new package of measures, unveiled by Finance Secretary Kate Forbes, includes £120 million to extend the Small Business Grant scheme to ensure that, in addition to a 100% grant on the first property, small business rate payers will be eligible to a 75% grant on all subsequent properties.

Full story here

1am: Trump blocks WHO funding

US President Donald Trump has instructed his administration to withdraw funding to the World Health Organisation (WHO).

He said the WHO had “failed in its basic duty” in its response to the coronavirus outbreak.

He accused the UN body of mismanaging and covering up the spread of the virus after it emerged in China, and said it must be held accountable.

Mr Trump has previously accused the WHO of being biased towards China.

11pm: NUFC takeover talks

Mike Ashley

A takeover of Newcastle United has moved closer according to documents which emerged revealing details of talks between owner Mike Ashley and financial fixer Amanda Staveley. 

Ms Staveley, who has been involved in other football club deals, is leading a bid said to be worth £300 million which involves Saudi Arabia’s sovereign wealth fund and the Reuben Brothers.

A 31-page document has been lodged at Companies House laying the legal groundwork for a potential deal to be completed. 

Tuesday 10pm: US close

US stocks closed sharply higher as investors grew more optimistic regarding the Covid-19 pandemic.

The Dow Jones Industrial Average was up 2.39%, while the S&P 500 was 3.06% firmer and the Nasdaq Composite saw out the session 3.95% stronger.

Sentiment was boosted after Donald Trump said on Monday that growth in new Covid-19 cases had stabilised and the measures taken to tackle it were working.

New York governor Andrew Cuomo also said it appeared the worst was over for the state.



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