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Friday Update

DB Live: Apple re-closes stores; pick up in retail

10pm: Wall St hit by Apple closures

Wall Street lost ground following Apple’s decision to temporarily shut 11 stores again in Florida, Arizona, South Carolina and North Carolina.

All three major US stock indexes were in the red as new cases of COVID-19 set records across at least six US states, and mandated mask use is becoming more common.

China, where the pandemic originated but had been contained, also reported an uptick in new cases of the disease.

In a video conference, US Federal Reserve chairmanJerome Powell warned the economic recovery from the pandemic is set to be challenging and there will be no quick fix.

The Dow Jones Industrial Average fell 266.56 points, or 1.02%, the S&P 500 lost 26.47 points, or 0.85% and the Nasdaq Composite dropped 53.46 points, or 0.54%.

6pm: Travelodge deal

Travelodge’s landlords have voted to approve a company voluntary arrangement (CVA) which will help the business restructure its leases.

Full story here

4.45pm London closes higher on US-China talks

Stocks on London ended the week on a positive note as investors cheered a trade-war truce agreement between Washington and Beijing.

The FTSE 100 index closed up 68.53 points, or 1.1%, at 6,292.60, and ended the week up 3.5%

1.30pm: Higgins plans questioned

Benny Higgins’ expected call for direct state investments in key businesses and sectors has been questioned by a leading think tank.

Full story here

11am: Virus downgraded

Pressure mounted for a relaxation of the two metre rule today after the chief medical officers for the four UK nations agreed to downgrade the coronavirus threat to level three.

Full story here

10am: Omega raises new funds

Omega Diagnostics, the Scotland-based company developing home-testing kits for coronavirus is raising £11 million to help scale up manufacturing and develop further opportunities.

The Clackmannanshire firm announced that it has raised £8m in a heavily oversubscribed subscription of 20m new ordinary shares to both new and existing institutional investors and a number of wealth managers at an issue price of 40p.

It now plans to raise up to £3m via the issue of 7m shares, also at 40p per share, via an open offer.

The price represents a discount of around 27% to the closing mid-market price of 55p on Thursday.

The discount reflects the rapid rise in the company’s share price from 11 pence on 8 April, immediately prior to announcement of Omega’s participation in the UK Rapid Test Consortium.

9.30am: Borrowing rises

UK public debt exceeded GDP for the first time since the early 1960s.

ONS figures show that government borrowing increased by £55.2bn in May, higher than forecasts for £50bn and is the highest borrowing in any month since 1993.

Russ Mould, investment director at AJ Bell, said: “Although it is very cheap for the Government to borrow right now, the news highlights the challenge it will face in maintaining spending to support businesses and the public at a time of acute need while also making some attempt at balancing the books.”

9am: Salmon farmer repays jobs subsidy

Salmon farmer Scottish Sea Farms said it will repay all money received from the UK Government’s Coronavirus Job Retention Scheme as business performance recovers.

Full story here

8.30am: Wind farm contract

Scottish civil engineering firm RJ McLeod will lead the construction of the country’s newest onshore wind farm following the award of a multi-million-pound contract by Vattenfall. 

Full story here

8.15am: London open

The FTSE 100 opened higher on the back of a rise in retail sales. London’s blue-chip index was up 20 points (0.33%) at 6,244.36.

7.15am: Retail ticks up, online is big winner

dobbies

Retail sales volumes across the UK partly rebounded in May with a 12% rise on April’s record fall, but sales were still down by 13.1% on February before the impact of the coronavirus (COVID-19) pandemic.

Sales were boosted by a 42% rise at household goods stores, with DIY shops and garden centres reopening.

Non-essential retailers in England and Northern Ireland have also since been allowed to reopen.

Most shops in Scotland are to reopen from 29 June. Non-essential retailers in Wales will be told they can reopen from Monday.

Online sales rose to their highest proportion on record in May, accounting for 33.4% of total spend, compared with 30.8% in April, the Office for National Statistics added.

Sara Korchmaros, chief commercial officer at the retail technology platform Recash, said: ‘With a third of all spending now being done online, bricks and mortar retailers have a mountain to climb to tempt shoppers back into physical stores.

“For all the excitement this week about the reopening of non-essential shops in England, the industry is racing to catch up with consumers’ changing tastes.

“Just because the high street is open, there’s no guarantee people will come, and a recent YouGov poll found half could stay away.

“Physical retailers who spent years making their stores attractive, inviting and conducive to spending have had to install chicanes and phalanxes of safety measures that hardly shout ‘come in and browse’.

“Lockdown has introduced millions more shoppers to the ease, and safety, of online browsing and May’s record-breaking shift to online sales is unlikely to be the high-water mark.

“As the lockdown restrictions continue to ease, all retailers, both online and on the high street, face a new struggle with fragile consumer confidence and rapidly evolving shopper tastes.

“Goodwill will not suffice to get them back on track, and technology which helps them attract shoppers more strategically will become essential not just for growth, but for survival.”

7am: Consumer credit holiday

Consumers should be able to extend a payment freeze on their credit cards by a further three months, says the Financial Conduct Authority.

The watchdog announced the proposal as part of measures to support borrowers in difficulties due to the coronavirus pandemic.

Those who had not yet asked for a payment freeze on credit cards or for an interest-free overdraft of up to £500 could also seek one until 31 October.

Wood prepares for delays

Energy services company Wood said its order book had slipped and it was prepared for further delays and postponements because of the pandemic.

Full story here

6am: Markets

Japan’s Nikkei 225 index was up 0.4%. In China, the Shanghai Composite was 0.7% higher, while the Hang Seng index in Hong Kong was marginally lower.

Wall Street ended mixed on Thursday, with the Dow Jones Industrial Average ending the session down 0.2%, but the S&P 500 added 0.1% and Nasdaq Composite closed 0.3% higher.

Another 1.5 million US workers filed for unemployment benefits last week, the Labor Department said, bringing the number of people laid off, at least temporarily, by Covid-19 to 45.7 million. The entire population of the US is about 330 million.

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