Wall Street wobbles ahead of Fed decision – live updates



05:26 PM

Losses widen for Slug and Lettuce owner

Slug and Lettuce owner Stonegate has revealed losses widened dramatically last year as trading restrictions and the temporary closure of pubs hit sales.

My colleague Hannah Uttley reports:

Stonegate, which is the UK’s largest pub company, said pre-tax losses widened to £746m in the year to September 27 compared with a £26m loss a year earlier.

In accounts filed at Companies House, it posted a 17pc drop in sales to £707m. Stonegate said the wider losses came following a writedown on the value of its estate and financing costs associated with its £3bn purchase of pub operator Ei Group in 2019.

Meanwhile, pub chain Young’s warned shareholders that its lenders have restricted the amount it can pay in dividends to £5m in the next financial year and said it will open around 140 venues on or around April 14, the earliest date at which pub gardens could be allowed to reopen.

05:14 PM

Eni and Shell acquitted



Eni and Shell have been acquitted in the oil industry’s biggest corruption trial centering on their purchase of a major oil block in Nigeria.

My colleague Rachel Millard reports:

The companies along with several past and present managers, including ENI’s chief executive Claudio Descalzi, were found not guilty of corruption by a court in Milan, three years after the first trial in the case began and after 74 hearings.

Prosecutors alleged that just under $ 1.1 billion [£800m] of the purchase price for the OPL 245 offshore oilfield in Nigeria was siphoned off to politicians and middlemen.

The judge’s written reasoning for the decision will be released in 90 days. Shell said it welcomed the decision.

Chief executive Ben van Beurden said: “We have always maintained that the 2011 settlement was legal, designed to resolve a decade-long legal dispute and unlock development of the OPL 245 block.”

04:57 PM

US gov given out $ 242bn in stimulus payments so far

The US government have distributed $ 242bn in stimulus payments so far, to about 90m households, making up more than half of the $ 410bn payments to individuals approved by Congress earlier this month.

According to a statement from the Treasury department, the first batch of $ 1,400 payments were mostly sent by direct deposit, with some received this past weekend. The official payment date is today, so some may not have been able to access the money until now.

04:43 PM

Eurostar weeks away from collapse without bailout, warns SNCF boss



Eurostar has increased the pressure on the UK and French governments to strike a bailout deal after the boss of its biggest shareholder said it needed a cash injection within weeks to survive.

My colleague Matthew Field reports:

Jean-Pierre Farandou, chief executive of French state rail company SNCF, told the Financial Times: “We are getting closer to the moment when Eurostar will have real cash flow problems … by next month, we have to conclude these discussions.”

Eurostar is understood to be in talks with UK Export Finance about backing loans worth £60m, the FT reported.

04:02 PM

Fashion house that made Meghan’s engagement dress teeters on brink of collapse

Ralph & Russo - Victor VIRGILE

Ralph & Russo – Victor VIRGILE

Ralph & Russo, the British fashion house which designed the Duchess of Sussex’s £56,000 engagement dress is on the brink of collapse as the pandemic delivers a blow to the luxury sector.

My colleague Hannah Uttley reports:

The company, which was founded by Tamara Ralph and her then-boyfriend Michael Russo, is said to have lined up Begbies Traynor and Quantuma to oversee a possible administration which could be launched as early as this week, Sky News reported.

In recent years Ralph & Russo has received the financial backing of some of Britain’s wealthiest investors including property developer Nick Candy and Phones 4U tycoon John Caudwell.

Its dresses have been worn by celebrities including Angelina Jolie and Gwyneth Paltrow, but a slump in the number of red carpet events sparked by the pandemic has dented demand for its luxury gowns over the past year.

03:34 PM

Games Workshop trading in line with expectations, dividend cut

Trading at Games Workshop in the three months to February was “in line with expectations”, the company said.

The FTSE 250 group, which makes the Warhammer tabletop games, also declared a 45p per share dividend, which will be paid out at the end of April. That marks a fall on its usual quarterly dividend of 60p per share.

The group – which has traded strongly through lockdown – said results had met predictions despite widespread store closures.

03:18 PM

Coming up: Federal Reserve decision

Jerome Powell - Susan Walsh/Pool via REUTERS/File Photo

Jerome Powell – Susan Walsh/Pool via REUTERS/File Photo

How much stimulus is too much? That is the question US Federal Reserve chairman Jerome Powell will be asked at tonight’s press conference.

My colleague Tom Rees reports:

As President Biden signs into law one of the largest economic rescue packages in US history, the chair of the Federal Reserve will have his work cut out trying to soothe nerves building on bond markets.

The central bank is expected to give a relaxed stance on inflation fears at next week’s meeting but doubts continue to grow. Economists predict that Biden’s $ 1.9 trillion stimulus package will be a gamechanger for the American economy, while bond yields have rocketed in recent months as investors prepare for higher rates.

02:42 PM

Ursula von der Leyen threatens to block vaccine exports to UK



The President of the European Commission has threatened to restrict vaccine exports to the UK to “make sure Europeans are vaccinated as soon as possible”.

Ursula von der Leyen said “all options are on the table” to boost the EU’s slow inoculation campaign, including moves to halt exports to countries which “have higher vaccination rates than us” – including the UK.

She also suggested that she wants EU leaders to discuss triggering Article 122, a clause used by Brussels once previously, during in the oil crisis in the 1970s. This would allow the EU to seize factories, waiving intellectual property and patents and impose export bans.

02:13 PM

Hostelworld slumps to €50m loss

Booking platform Hostelworld plunged to a €50m (£43m) loss in 2020 as the pandemic hit demand for holidays and caused cancellations to soar.

My colleague Hannah Uttley reports:

The company said sales tumbled by 81pc to €15.4m last year as net booking volumes declined by 79pc and cancellations totalled €6.2m as customers suspended their travel plans.

The slump in sales caused Hostelworld to swing from a profit before tax of €3m in 2019 to a $ 50m loss last year.

Analysts at Peel Hunt warned the company was unlikely to enjoy a rebound until a recovery in long-haul travel, which accounts for a quarter of its sales.

script src=”https://tmgpulse.azureedge.net/scripts/article/article-1.js” charset=”UTF-8″>

01:48 PM

Rathi: Full speech

You can read FCA chief executive Nikhil Rathi’s full speech on diversity in financial services (see 11:12am update) here:

01:47 PM

Wall Street makes mixed open

US stocks made a mixed open, with the tech-heavy Nasdaq dropping sharply amid continued volatility ahead of tonight’s Federal Reserve announcement.

Bloomberg TV - Bloomberg TV

Bloomberg TV – Bloomberg TV

01:34 PM

Full report: Mobile operators dodge big 5G bill

My colleague Ben Woods has more details on the outcome of today’s 5G spectrum auctions – which turned out to be cheaper than expected for UK operators. He writes:

The outcome sent BT shares as much as 5pc higher to 150p, boosting chief executive Philip Jansen ahead of the telecoms giant’s £12bn nationwide “full-fibre” broadband upgrade.

Wrapping up the spectrum auction in less than a week will come as a relief to mobile operators after 5G bidding in parts of Europe became drawn out affairs with spiralling costs.

Germany’s 5G spectrum auction two years ago descended into a three-month tussle costing operators £5.6bn.

However, it will come as a blow for the government coffers as the auction attracted around half the investment they might have expected.

12:59 PM

Vodafone likely to price Vantage Towers IPO at €24 a share – Bloomberg

Vodafone is likely to price is highly-anticipated float at €24 a share as it targets a valuation of €2.4bn, Bloomberg reports.

The price, indicated by terms seen by the news service, is at the lower half of the originally-expected range.

Bloomberg continues:

Demand for the offering exceeds the deal size at the expected price of 24 euros, as well as at higher pricing levels, the terms showed. The company will stop taking investor orders at 2 pm in Germany today, with the stock slated to start trading on Thursday.

Vantage Towers AG revised the range for the Frankfurt sale to 24 euros to 25 euros a share from the original €22.50 to €29 target on Tuesday.

Vodafone is looking for maximum proceeds of 2.8 billion euros from the offering, which would include an option to increase the deal size and an over-allotment. The final number of shares sold will depend on where the IPO prices.

12:22 PM

Market moves

As we pass noon, European markets are pretty downbeat – the FTSE 100 has gradually sunk into the red during today’s session, with investors selling off slightly amid rising bond yields.

12:08 PM

Capita plans to sell £700m of assets

Outsourcer Capita has announced plans to sell £700m of non-core assets – including shedding some offices – as part of efforts to stabilise its finances.

The FTSE 250 group – which carries out variety of jobs for the public sector including chasing non-payment of BBC licence fees – said it had “responded robustly” to the challenges of 2020, with losses narrowing from £62.6m to £49.2m despite a 10pc fall in revenues.

It plans to simplify from its current six divisions to three: one focusing on public service contracts, one on customer support for businesses, and a third division that will focus on its non-core businesses.

Chief executive Jon Lewis said:

Despite the challenges, we have continued to make good progress, improving client relationships and winning significant new contracts. Capita is a much better business than it was three years ago when we began our transformation.

Capita plans to return to organic revenue growth this year, and is targeting “sustainable cash generation” in 2022.

11:41 AM

UK bonds yields rise

The yield on UK 10-year bonds has risen this morning, as investors shed debt assets on expectations of a rise on inflation.

The increase, which comes as US 30-year yields hit the highest since November 2019, reflects falling prices for Government bonds:

11:28 AM

BT rises after 5G spectrum win

Shares in BT has risen strongly this morning, after the telecoms giant said EE, its mobile business, had won the new 700mhz and 3.6–3.8ghz 5G spectrum ranges for £452m at an auction.

The FTSE 100 company said:

Low band 700MHz spectrum is widely seen as crucial for reach and indoor coverage, providing a wider and better customer experience. Mid-range 3.6GHz spectrum will help deliver greater capacity and speed, both vital elements for the growing use cases associated with 5G technologies.

BT consumer chief Marc Allera said the auction outcome was “great news” for its network.

The price paid was cheaper than the roughly £700m price analysts had expected, with the auction also settled quickly.

11:12 AM

FCA’s Rathi: Companies may have to meet diversity standards for London listing

The UK’s top financial regulator has said companies may need to meet diversity requirements in order to list in London.

Financial Conduct Authority boss Nikhil Rathi made the comments as part of a speech today, saying the watchdog would “look had at the way capital markets work” as part of a review of the finance industry.

He said:

In the US, we have seen the Nasdaq take the lead with its listing rules, which will require all companies listed on its U.S. exchange to have, or explain why they do not have, at least two diverse directors. We will be exploring whether we should make similar requirements part of our premium listing rules.

10:56 AM

Bosses may lose bonuses under new audit rules

Kwasi Kwarteng - Jack Taylor/Getty Images

Kwasi Kwarteng – Jack Taylor/Getty Images

Strict new rules that could punish directors for major misstatements in their companies’ accounts by clawing back bonuses will be announced by ministers this week.

My colleague Lucy Burton reports:

Kwasi Kwarteng said he was planning a shake-up of audit firms after becoming Business Secretary earlier this year.

The move follows a string of scandals in the sector as auditors failed to raise the alarm ahead of corporate failures including café chain Patisserie Valerie and outsourcer Carillion.

Mr Kwarteng’s consultation document is expected to be published on Thursday. It will propose a further review that could force all listed companies to incorporate “malus and clawback” arrangements in directors’ pay arrangements, Sky News reported.

10:41 AM

BMW aims for half its sales to be electric by 2030

BMW  - Sean Gallup/Getty Images

BMW – Sean Gallup/Getty Images

At least half of all vehicles sold by BMW will be electric by 2030, the German prestige car group has said.

My colleague Alan Tovey reports:

The company – which also owns the Mini and Rolls-Royce marques – used BMW’s annual media conference to reveal the target.

In 2020, the company sold 2.2m vehicles, a drop of 8.4pc on the previous year, and just 8.3pc of all cars it delivered were electrified.

Revenue fell 5pc to €98.9bn, and profit was down by a quarter at €5.2bn.

BMW’s target for electric vehicle sales is ambitious than some of its rival manufacturers but chief executive Oliver Zipse said the company could act faster if drivers’ appetite for emissions-free accelerates.

Germany's electric car subsidies

Germany’s electric car subsidies

10:34 AM

Greece plans first 30-year bond sale since 2008

Greece is issuing 30-year bonds for the first time since the financial crisis, as it completes a fully-fledged return to debt markets.

Bloomberg has more details:

The nation is selling 30-year bonds via banks, which could be an opportunity for investors to pick up yields that are likely to be the highest in the euro area. Greece is following others in the region in seizing on low borrowing costs to finance its pandemic recovery.

The sale is a sign of just how far Greece has come over the past decade. At the height of the euro-area debt crisis in 2012, 10-year yields skyrocketed above 44pc, with the country locked out of international markets. Now, yields are below 1pc, giving the government a chance to tap long-end bonds and complete its yield curve.

“This Greek bond sale marks the nation’s rehabilitation,” said Alexandros Malamas, a trader at Piraeus Securities in Athens.

10:10 AM

German growth outlook cut

Angela Merkel’s panel of economic advisers have cut their estimate for how much the country’s economy will grow during 2021 from 3.7pc to 3.1pc.

The weaker-than-hoped growth, which is expected to be followed by a 4pc expansion in 2022, comes amid worries about a fresh resurgence in Covid-19 cases amid the country’s patchy vaccine rollout.

Volker Wieland, a member of the panel, said:

The greatest risk for the German economy is a possible third wave of infections, if it would lead to restrictions or even closures in manufacturing.

09:49 AM

Money round-up

Here are some of the day’s top stories from the Telegraph Money team:

09:32 AM

SSP falls after announcing rights issue

Food-on-the-go retailer SSP is among the biggest fallers on the FTSE 250 today, after announcing plans to tap shareholders for around £475m as part of efforts to shore up its balance sheet.

Alongside a rights issue, the group – which owns brands such as Upper Crust and Ritazza – said it has secured an extension to bank facilities that had been due to mature between July 2022 and January 2024.

In a statement, the company said:

This holistic set of balance sheet measures will significantly strengthen SSP’s financial position and resilience, and will position SSP for the next phase of the pandemic.

These measures will protect the business if the global travel sector experiences a more prolonged recovery from the pandemic, whilst under SSP’s base case scenario, they will strengthen the group’s balance sheet and provide increased capacity for investment as the travel market recovers.

SSP said it “remains confident” in the medium-term outlook for its trading, but said the “profile of the recovery remains uncertain”.

Its revenues remain sharply lower as travel remains low, with sales set to be some 80pc lower than 2019’s levels for the six months to the end of March. The company noted that cash usage remains at about £25m to £30m a month.

Chief executive Simon Smith said:

Strengthening the balance sheet now will underpin the business if the recovery in the travel sector is slower than we anticipate and it gives us the capacity to invest in growth opportunities as we emerge from the pandemic. Our current expectation is that the early recovery will be led by domestic and leisure travel from which we are well-placed to benefit.

09:07 AM

Rolls-Royce rises after upgrade

Engine-maker Rolls-Royce has risen today after a pair of upgrades from analysts.

JP Morgan said the FTSE 100 group – which has been battered by the downturn in aviation during the pandemic – is now attracting investors bets on its medium-term ambitions, which have been buoyed by vaccine rollouts.

Analyst David Perry said he saw the company on a path of “slow improvement”, raising its rating from ‘neutral’ to ‘overweight’.

Meanwhile, Berenberg analyst Andrew Gollan pushed the group’s target price from 130p to 150p, maintaining a ‘buy’ rating on its shares.

08:53 AM

Samsung warns of semiconductor shortage – live tech updates

Samsung - REUTERS/Andrew Kelly/File Photo

Samsung – REUTERS/Andrew Kelly/File Photo

Samsung Electronics has warned of a “serious imbalance” in the semiconductor industry, the latest sign that a chips shortage causing disruption to carmakers could spill over into the wider technology sector.

My colleague Morgan Meaker reports:

At a shareholder meting on Wednesday, Koh Dong-jin, co-chief executive and head of Samsung’s mobile business unit, said: “There’s a serious imbalance in supply and demand of chips in the IT sector globally.”

Samsung, one of the world’s largest makers of chips and consumer electronics, said it expects the problem to persist in its business next quarter.

The tech giant also said it was planning to skip the introduction of its new Galaxy Note, although Koh said this decision was linked to efforts to streamline its lineup.

08:39 AM

Ferrexpo ramps up payouts as profit climbs

Iron miner Ferrexpo has declared a bumper special dividend after seeing profits soar on the back of rising prices.

The FTSE 250 group, which is controlled by Ukrainian billionaire Kostyantin Zhevago, posted a profit before tax of $ 747.9m for 2020, up from $ 459.6m the prior year.

It is one of the world’s top suppliers of iron pellets, which are heavily used by steelmakers. Prices paid for its key product soared over the year amid strong demand from China that has provided a boost across the materials sector.

Due to its “strong operational and financial performance”, the group announced a further special interim dividend at 39.6 cents per shares – taking its 2020 total to 72.6 cents per share.

Chair Lucio Genovese said:

The Board will consider, as appropriate, whether or not to propose a final dividend in respect of 2020, which if proposed will be put to the group’s AGM.

08:17 AM

Hargreaves Lansdown expects to beat profit forecasts after memestocks boom

Investment platform Hargreaves Lansdown has said it expects to to beat analyst expectations for the current financial year (to the end of June) after strong trading in January driven by interest in so-called memestocks.

The FTSE 100 company said January “had been similar to previous lockdown periods with strong dealing volumes, significant engagement from clients and robust net new business and net new client numbers”.

It said clients showed a strong interest in international equities, particularly those in the US.

HL said it would provide more information at its scheduled trading update in mid-May.

08:10 AM

FTSE makes flat open

The FTSE 100 has opened flat, performing similarly to other top European indices. Investors are likely to be cautious as they look ahead to tonight’s Federal Reserve decision.

Bloomberg TV - Bloomberg TV

Bloomberg TV – Bloomberg TV

08:03 AM

Only vaccinated Britons will be allowed to go on P&O‘s British cruises

P&O Cruises will offer voyages around the British coast this summer, but only for UK residents who have been vaccinated against Covid-19.

My colleague Simon Foy reports:

The company said cruises on two ships, Britannia and Iona, will last up to a week and will depart from Southampton between June and September.

Due to Britian’s notoriously erratic weather, it added that routes are subject to change as the ships will sail towards the sunnier parts of the coastline.

However, these sailings will only be for UK residents who have received their Covid vaccinations and customers will still have to adhere to certain health restrictions, including wearing masks, social distancing and enhanced sanitation measures.

07:53 AM

Dignity swings to loss despite rise in deaths – but faces board battle

Funeral provider Dignity swung a loss during 2020, despite Covid-19 producing a 14pc rise in the UK’s total deaths, to 663,000.

The group posted a loss before tax of £19.6m, compared with a £44.1m profit the previous year. revenues rose slightly, up 4pc to £314.1m.

It reported a lower average revenue of £2,522 per funeral, versus £2,930 in 2019, which it pinned on Government restrictions limiting the number of people allowed to attend funerals. It also had to absorb other costs related to staffing and safety through the pandemic.

Chief executive Clive Whiley fired a shot at top investor Phoenix, which has called a general meeting in an effort to remove Mr WHiley and install its chief investment office Gary Channon as executive director.

Mr Whiley said:

Unfortunately, notwithstanding the significant progress the business has made since my appointment, our largest shareholder Phoenix Asset Management Partners, with whom we believed we were having a constructive dialogue in relation to the future strategy of the business, has chosen this moment to seek to assert what would, in effect, be executive control at Board level.

Whilst, in my view, the Group is now sufficiently robust to sustain this wholly avoidable and unnecessary challenge, it is nonetheless an unwelcome distraction as we remain dedicated to dealing with the ongoing fallout from the pandemic.

To minimise disruption, the independent directors have been charged with taking the necessary steps to convene the required general meeting of shareholders and they will share their views on the resolutions to be considered at that time. It will then be for shareholders to decide on the merits of the Phoenix proposal.

07:04 AM

Agenda: FTSE to open flat

Good morning. The FTSE 100 is set to open flat as investors await the Federal Reserve’s interest rate decision.

Chairman Jerome Powell will have to defend an ultra-easy monetary policy outlook amid rising inflation fears.

5 things to start your day

1) Disney under fire from MPs over Mulan shoot in Uighur territory: Disney has come under attack after refusing to answer questions over concerns the making of Mulan may have risked using forced labour.

2) SNP backed Gupta deal for Scottish smelter as alarm bells rang: Exclusive: the metals tycoon was handed hundreds of millions of pounds of taxpayer support by the Scottish government even as alarm bells rang.

3) Markets rattled as inflation fears overtake Covid concerns: Inflation has replaced Covid as the top worry for international investors for the first time since February 2020, amid strong vaccine rollouts.

4) Uber agrees to holiday pay and pensions for 70,000 drivers: All of Uber’s UK drivers will receive holiday pay and be automatically enrolled onto a pension plan where the company would contribute alongside drivers.

5) NatWest faces money laundering charges over £264m cash deposits: City watchdog claims that the bank’s systems and controls failed to properly monitor and scrutinise activity on a customer’s account.

What happened overnight

Asian stocks were steady Wednesday as investors assessed the economic recovery and the risk of a shift in the Federal Reserve’s dovish policy projections. Treasury yields held near the highest levels in over a year.

Japanese stocks were little changed and China’s CSI 300 swung between gains and losses. South Korean shares retreated as Samsung Electronics Co. warned it’s grappling with the fallout from a “serious imbalance” in semiconductors globally. European and U.S. equity futures fluctuated. The S&P 500 overnight snapped a record run and the tech-heavy Nasdaq 100 posted a modest rise.

The Treasury 10-year yield held around 1.62pc heading into day two of the Fed’s meeting, after a 20-year bond auction drew strong demand. Market-implied inflation expectations are at 12-year highs. The dollar was stronger versus major peers.

Coming up today

Corporate: Dignity, Ferrexpo (Full year results)

Economics: Inflation final reading (eurozone); Federal Reserve announcement, building permits, housing starts (US)