• FTSE 100 closes over 45 points higher
  • Gilead Sciences stock up
  • Carnival buoyed by trading update

5.05pm: FTSE 100 closes ahead

FTSE 100 index closed higher on Friday, bouncing back from Thursday’s losses, as sentiment was boosted by hopes of a coronavirus (COVID-19) treatment.

Britain’s blue-chip benchmark finished the day up over 45 points, or 0.76%, at 6,095.

Over the week as a whole, the index finished around 1% lower.

The treatment in question is a drug, which is not a new name. A new study has found that anti-viral treatment Remdesivir can reduce the fatality rate in coronavirus patients by 62%.

The news sent shares in Nasdaq listed Gilead Sciences Inc (NASDAQ:GILD) up 2.5% at US$76.57 in New York.

“This week the headlines were dominated by stories of record cases in various US states, and policymakers re-imposing lockdown restrictions, so the Remdesivir story has been a nice change of pace,” said David Madden, analyst at CMC Markets.

On Wall Street, the Dow Jones added over 220 points at 25,926, while the S&P 500 dropped nearly 15 at 3,166.

3.10pm: FTSE 100 higher

US stocks open mixed following a slightly surprising US producer prices reading for June.

The Dow Jones edged up 21 points (0.1%) to 25,728 but the S&P 500 was off 4 points (0.1%) at 3,148 while the NASDAQ Composite, which had been expected to open higher, shed 51 points (0.5%) at 10,496.

The headline producer price index (PPI) fell 0.2% in June; most economists had predicted a rise of around 0.4%.

The core index fell 0.3% versus expectations of a 0.1% increase.

“The downward impulse in the June PPI is all in services, where prices fell by 0.3%. Core goods prices rose 0.1%. The BLS says that 80% of the fall in services prices is due to a 7.3% drop in margins for machinery and vehicle wholesale,” said Ian Shepherdson, the chief economist at Pantheon Macroeconomics.

“The numbers are wildly erratic, though, and could easily rebound next month,” he cautioned.

Closer to home, the FTSE 100 was up 23 points (0.4%) at 6,072, with traders – those that have not already sloped off for the weekend – probably spending as much time checking their watches as their trading screens, such has been the lack of meaningful activity.

Cruise ships operator Carnival PLC (LON:CCL) – no longer weighing down the FTSE 100 since its relegation to the FTSE 250 – rose 2.7% to 969.8p after it provided a second-quarter business update.

“Specific brands and ships are expected to return to service over time to provide guests with unmatched joyful vacations,” the company’s statement said. (Sick bags available on request).

1.30pm: US indices set for mixed start

The NASDAQ Composite index is set to continue on its winning way but the Dow Jones and S&P 500 are set for soft openings.

Spread betting quotes indicate the NASDAQ will climb 162 points to open at around 10,709 but the Dow is pegged to open 246 points lower at 25,560 while the S&P 500 is seen starting 16 points weaker at 3,136.

US producer prices fell 0.2% in June, confounding economists who had predicted a 0.4% increase.

In London, the FTSE 100 continued to do its impersonation of a stopped clock; the index was up 28 points (0.5%) at 6,077.

11.45am: Coronavirus fears quickly go away in London

Investors in London don’t seem overly worried about a rise in new coronavirus cases, both here and in the US.

The number of new cases in the UK rose yesterday compared to Thursday last week, marking the first rise in eight readings but it may just be a statistical blip, according to Ian Shepherdson, the chief economist at Pantheon Macroeconomics, although “the data needs to be watched closely over the next couple of weeks in the wake of the reopening of the hospitality sector on July 4.”

The Johns Hopkins database shows the US yesterday reported 63,200 new cases, up 16.1% week-on-week.

“This is a slightly smaller jump than we expected, despite a 5.4% increase in tests compared to a week ago,” admitted Shepherdson.

“The seven-day average increase in daily new cases compared to a week ago slowed to 17.6%, the lowest rate since June 18 and down from a peak of 43.7% on June 28.

The number of new daily cases is still rising but the curve seems to be flattening out, Shepherdson suggested.

On the other hand, the seven-day moving average of the number of deaths has begun to creep higher.

“Texas has reported record daily deaths in each of the past two days; California and Florida both reported record deaths yesterday. This was inevitable, given the big increase in the number of people hospitalized. The trend will rise further over the next couple of weeks,” Shepherdson predicted, although it won’t rise to anything like the 3,500 deaths per day implied by the relationship between cases and deaths in the first wave of the coronavirus, the economist asserted.

There are three reasons for this, according to Shepherdson.

First, cases are skewing much younger than in the spring, and the fatality rate of young people is much lower. Second, testing has risen almost five-fold since early April, so far more asymptomatic cases are being recorded. Third, treatment—both hospital techniques and drugs—is much better now than in spring,” he said.

READ Johns Hopkns Mortaility Analyses

In London, the FTSE 100 was up 23 points (0.4%) at 6,073, helped by a rally by utility stocks, which took a biffing yesterday after Ofgem fired a warning shot across the sector’s bows.

9.40am: Traders watch paint dry 

Share prices have picked up a little after a cautious start.

The FTSE 100 was up 22 points (0.4%) at 6,072.

The British Retail Consortium (BRC) confirmed what most of us suspected, which is that shopper numbers are about half the level in June that they normally are.

Non-essential shops were allowed to reopen in England on June 15, which led to a bit of extra activity, with footfall down 53% year-on-year in the second half of the month after being down 77% in the first half.

For June as a whole, footfall was down 62.9%, the BRC revealed.

On the company news front, Trafalgar Property Group PLC (LON:TRAF), up 74% at 0.2p, was the top performer after entrepreneur Chris Akers, with a stake of 6.15%, was revealed as a substantial shareholder.

Elsewhere in the property sector, Great Portland Estates PLC (LON:GPOR) nudged up 0.1% to 609.8p after a mixed trading update in which it said its “office pre-letting momentum remains healthy” but the coronavirus is disrupting the activities of its existing occupiers.

8.55am: Weak end to week

The FTSE 100 index fell back again in early trade on Friday as coronavirus (COVID-19) second wave fears continued to haunt the market.

The UK blue-chip index was off 35 points at 6,014.33.

While eyes were on the sporadic new outbreaks in Asia, the focus has also been on the US, which appears to be struggling to contain the current outbreak.

More than 60,500 new COVID-19 infections were reported in the US on Thursday, which broke the record for the largest single-day tally of cases by any country since the virus emerged late last year.

New havens?

Taking a 90-degree ‘zag’, it seems the precautionary investment is being poured into Silicon Valley rather than treasuries, though gold still remains highly sought in this time of turmoil.

In his recent commentary, Michael Hewson, of CMC Markets, spoke of the disconnect between the tech-lade NASDAQ from the mainstream equity indexes in the US and the former’s continued ascent.

He reckons big tech – the FAANG stocks of Facebook, Apple, Amazon, Netflix and Alphabet (Google) – have become the new haven investments, replacing former ‘go-tos’ US and European debt.

All have trillionaire status – save Netflix and Facebook – and are in or around record territory, Hewson observes.

“Whether this trend will continue remains to be seen, but the move into big blue-chip tech stocks with strong free cash flow, and balance sheet size appears to be becoming a trend, rather than investing in government bonds which have next to no yield, or negative yield,” Hewson said.

Back here in the UK, the profit-taking continued at GVC Holdings (LON:GVC), the bookmaker, which has advanced 11% since the end of last month. The stock was off 1.9% early on.

The post-results sell-off continued for JD Sports (LON:JD.), which fell a further 1.6%.

Proactive news headlines:

IQ-AI Limited (LON:IQAI) and its subsidiary Imaging Biometrics are developing a technology that they believe could revolutionise the detection and treatment of brain tumours. The IB CAD has been created to pick up cancer cells before they are visible on standard imaging. It does this by combining multi-parameter magnetic resonance data and artificial intelligence algorithms, and, in a structured way, it can pick up the tell-tale signs of the disease called infiltrating tumour cells. It even has the potential to work in non-contrast enhancing regions of the brain, thus providing the “ultimate in early detection, a key advancement for cancer treatment”.

Canadian Overseas Petroleum Limited (LON:COPL) shares started Friday positively after the oiler announced its 50%-owned joint venture ShoreCan has agreed an extension to the backstop date to sign-off definitive documents to seal the resolution of its dispute with Essar, Shorecan’s partner in Nigeria. The new date has been set as July 20, the company said. “The time taken to enter into the definitive documents has taken longer than both parties thought at the outset,” said Arthur Millholland, COPL chief executive, said in a statement.

Arix Bioscience PLC (LON:ARIX) has said its portfolio company, Atox Bio, is planning to submit a new drug application (NDA) to the US Food and Drug Administration (FDA) for its Reltecimod drug in the third quarter of 2020 under an accelerated approval pathway. The plans follow results from a phase 3 clinical trial of Reltecimod which showed positive effects on resolution of organ dysfunction in patients suffering with necrotizing soft tissue infection. The Phase 3 results showed that Atox’s Reltecimod, in conjunction with currently available standard of care demonstrated, a “significant difference” in the percentage of patients who achieved resolution of organ dysfunction/failure by day 14 versus standard of care alone.

Eden Research PLC (LON:EDEN), the natural pesticides group has appointed a new head of biology and development. Dr Aoife Dillon joins Eden from another AIM-listed group, Plant Health Care where she has been the technical director for the EMEAA Region for the past three years. Prior to that, Dillon was chief technology officer at Exosect, a formulations company focused on the targeted delivery of biological and synthetic compounds in agriculture. At Eden, Dillon will focus on developing the product pipeline from a biology standpoint.

Sativa Group PLC (LON:SATI) said it recorded a record month of revenues in June from its cannabidiol (CBD) and medicinal cannabis businesses. The company said it achieved record sales in the month through a combination of both CBD and hand sanitiser sales from its Goodbody brands including Goodbody Botanicals and Goodbody Wellness. Sativa said a range of sectors including restaurants, airlines and hotel groups had used the Goodbody hand sanitiser programme to protect their customers and staff during the coronavirus pandemic.

Primary Health Properties PLC (LON:PHP), a leading investor in modern primary health facilities, has announced the successful completion of its upsized placing announced on Thursday, which raised gross proceeds of approximately £140mln following strong investor demand. The group said a total of 96,555,000 new ordinary shares were placed by Numis Securities and Peel Hunt at a price of 145p each with existing and new institutional investors, representing a discount of just 1.9% to the stock’s intra-day trading price on Thursday. The placing, which represents approximately 7.9% of Primary Health Properties’ issued ordinary share capital prior to the fundraise, was upsized from approximately £120mln due to strong investor demand.

Genedrive PLC (LON:GDR) has developed new software to automate results interpretation of tests run on its Genedrive 96 SARS-CoV-2 kit for coronavirus (COVID-19). Genedrive 96 Exporter is a new in-vitro diagnostic medical device (IVD) software module for automated results interpretation of the Genedrive 96 SARS-CoV-2 Kit. The software displays the interpreted data as ‘positive’ or ‘negative’ in a graphical user interface and as an exportable report. The interpreted data is then available for further inspection on an individual sample basis or as part of a sample group. In a separate announcement, the molecular diagnostics specialist said revenue for the year to the end of June was in line with expectations at £1.0mln, down from £2.4mln the year before. As previously announced, revenues have been hit hard by the disruption caused by the coronavirus pandemic.

InnovaDerma PLC (LON:IDP) has said it performed “resiliently” during the coronavirus pandemic lockdown, though the health and beauty retailer has been hit by rising advertising costs. With a flexible model, the Skinny Tan group said it has been able to channel efforts towards its established online platform after retailers such as Boots and Superdrug were forced to close their doors during the pandemic. Customer traffic in the UK was up 27%, while in the US it was ahead 65%, Innovaderma said in a trading update. This helped pick up the slack from the bricks and mortar operation and contributed to an eventual 2.3% boost to revenues to around £13.2mln for the 12 months ended June 30, 2020.

Remote Monitored Systems (LON:RMS) has reshuffled its board and announced that its non-executive chairman Nigel Burton will retire effective immediately to pursue other opportunities. The AIM-listed firm said non-executive director Paul Ryan will take over as chairman, however, Burton has agreed to continue to provide support to the company on a consultancy basis to ensure a smooth transition. RMS also said it has appointed John Richardson, a director of its subsidiary GyroMetric Systems Limited, as its chief operating officer who will also replace Burton on the company’s audit and remuneration committees.

Inspired Energy PLC (LON:INSE) has raised £35mln and struck a deal to acquire the 60% of Ignite Energy that it does not already own. The acquisition of Ignite – which provides energy management services to corporate clients like Halfords, Starbucks, and WH Smith – will accelerate the group’s organic growth in optimisation services, the company said in a statement. It will give the group full control of Ignite and allow it to leverage its platform to cross-sell, Inspired added. The move increases the company’s exposure to a bigger market. At 857mln the Optimisation Services market is believed to be about twice the size of the energy assurance services market. The equity fundraise sees the company issue £30mln of shares via a placing, executed via an accelerated book-building process, and sell £5mln of shares via an open offer to existing qualifying shareholders. New shares will be priced at 15p each, a discount of around 12.5%

Feedback PLC (LON:FDBK), the specialist medical imaging technology company, said has been advised that Premier Miton Investors is interested in 50,000,000 ordinary shares in the company, representing 4.68% of the issued share capital and voting rights.

Condor Gold PLC (LON:CNR) (TSX: COG) announced that on 9 July 2020, Jim Mellon, a non-executive director of the group purchased 400,000 ordinary shares in the company at a price of 38p per share for a total consideration of £152,000 Accordingly, further to the purchase, Mellon owns directly and indirectly a shareholding of 18,426,963 Condor Gold ordinary shares.

Amryt Pharma PLC (LON:AMYT) (NASDAQ:AMYT), a global, commercial-stage biopharmaceutical company dedicated to developing and commercializing novel therapeutics to treat patients suffering from serious and life-threatening rare diseases has announced that, on July 9, 2020, an institutional investor exercised subscription rights relating to 4,000,000 zero cost warrants. These warrants were issued in September 2019 as part of the company’s acquisition of Aegerion. Each warrant entitles the holder to subscribe for one ordinary share for no additional consideration.

e-therapeutics PLC (LON:ETX.L) has announced that further to the fundraise announced on July 7, 2020, Numis Securities has exercised the broker option in respect of 11,204,165 new ordinary shares, raising gross proceeds of approximately £1.34mln for the company. The broker option shares are being issued at a price of 12p per share (being the placing price) and will be issued on the same terms and conditions as the placing.

Impax Environmental Markets PLC (LON:IEM) said its monthly factsheet for June 2020 is now available on the company’s website at: https://impaxenvironmentalmarkets.co.uk/wp-content/uploads/2019/05/factsheet-Impax-Environmental-Markets-Plc-June-2020.pdf

Belvoir Group PLC (LON:BLV), the UK’s largest property franchise, has confirmed that its chief executive officer, Dorian Gonsalves will present at the Mello Virtual event ‘Investing in the New World’ at 12pm and 3pm today, Friday, July 10, 2020. Both Gonsalves, and Belvoir’s chief financial officer, Louise George, will be available to talk to event participants at the virtual Belvoir stand from 11am to 4pm, where a copy of the presentation and the group’s 2019 Annual Report will also be available.  Investors can register to attend at www.melloevents.com  A copy of the presentation given via webinar to investors will be available to view post-event on the Reports & Presentations page of the company’s website at www.belvoirgroup.com, however, no material new information will be disclosed.

Greencoat UK Wind PLC (LON:UKW), the leading listed renewable infrastructure fund, invested in operating UK wind farms said it will announce its net asset value as of June 30, 2020, the quarterly dividend and release half-year results for the period to June 30, 2020, on July 30, 2020.

6.35am: Subdued start predicted 

Resurgent fears about the health crisis hit markets hard yesterday but the Footsie looks set for only modest losses this morning.

Spread betting quotes have London’s index of leading shares at around 6,035, down 15 points from yesterday’s close; the index had a late dive yesterday to finish 107 points lower on the day.

“There is a growing feeling that things are going backwards in terms of the health emergency. Yesterday, it was reported that Tokyo posted a record number of new cases, while Hong Kong will retighten restrictions on account of the number of fresh cases. In the US, Alabama saw a record number of cases, while Florida posted a record number of hospitalisations and fatalities.” said CMC’s David Madden.

“Traders will be paying close attention to the number of deaths, as that could be the tipping point for politicians to reverse the reopening of their economies,” was Madden’s slightly morbid analysis.

With the US corporate results season about to start in earnest next week, US indices had a rough day yesterday with the Dow Jones Industrials Average off 361 points at 25,706 and the S&P 500 18 points lower at 3,152.

The NASDAQ Composite, however, went its own way again, rising 55 points to 10,548.

Asian markets this morning are in the red, with Japan’s Nikkei 225 off 145 points at 22,384 and Hong Kong’s Hang Seng index down 455 points at 25,755.

Today’s schedule is mercifully quiet with no updates scheduled from big companies and not much on the macroeconomic front – US producer prices inflation looks like the item with the most capacity to move markets.

Significant announcements expected on Friday:

AGM: Urban Logistics Reit PLC (LON:SHED)

Economic data: US PPI inflation

Around the markets:

  • Sterling: US$1.2583, down 21 cents
  • 10-year gilt: 0.162%, down 2.29 basis points
  • Gold: US$1,806 an ounce, up US$2.30
  • Oil: US$41.84, down 51 cents
  • Bitcoin: US$9,158, down US$86

City headlines:

  • Financial Times

  • Engineering giant Rolls-Royce flagged significantly lower income from its wide-body engine business over the next seven years
  • International banks in Hong Kong are running emergency audits on their client-base to identify Chinese and Hong Kong officials and corporates that could face sanctions from the US.
  • Controversial facial recognition company Clearview AI is to be jointly investigated by the UK and Australian information commissioners.
  • The Times

  • Beijing came under increasing pressure last night after western allies offered sanctuary to Hong Kong citizens, put sanctions on Chinese technology companies and acted against party officials involved in human rights abuses.
  • The world’s banks are set to write off $2.1 trillion over the next two years as customers default on loans because of the Covid-19 economic slump, according to Standard & Poor’s.
  • The number of people going out shopping started to recover last month as lockdown restrictions eased, but it remains well below pre-coronavirus levels.
  • Half-year revenue fell sharply at Vistry Group because of the national lockdown, but the housebuilder said the value of its order book for homes reservations has risen to £1.66 billion from £1.5 billion in the middle of May.
  • DWF, London’s largest listed legal services company, is to slash £15 million in costs as it battles the effects of the pandemic.
  • German prosecutors have said that they are investigating Wirecard executives over suspected money laundering.
  • The Daily Telegraph

  • Nearly 7,000 workers fear losing their jobs after John Lewis and Boots announced dozens of store closures on Thursday, while Burger King said it may not reopen more than 50 outlets.
  • Brussels will allow European firms to continue using London’s vital clearing services after the Brexit transition ends in a victory for the City.
  • The Guardian

  • The cost of household staples will substantially increase if there is no Brexit trade deal, British retailers have warned.
  • Another 1.3 million people filed for unemployment in the US last week as new Covid-19 cases continue to surge in states.
  • Boohoo Group’s shares rebounded more than 27% on Thursday after analysts and investors were reassured by the online fashion specialist’s plan to clean up its supply chain.
  • The US has argued to ease global energy controls, promoting ‘all fuels’ free-market strategy at a global summit of energy ministers.
  • The pensions rescue service has forced the appointment of FRP Advisory as second administrator to scrutinise the finances of Laura Ashley prior to its collapse into administration in March.
  • Daily Mail

  • Tesla boss Elon Musk is in line for a £2.7 billion bonanza after the electric car maker’s shares rocketed.
  • Travel business Dart Group has recorded a decline in its annual profits following the mass cancellation of flights and the imposition of travel restrictions in March.
  • Deloitte is facing a record £15 million fine over its ‘reckless’ audits of a British software group Autonomy before it was sold in a blockbuster deal.