The Business: Thursday 23 May 2013
Company news, markets and financial talking points, available from 8am Monday to Friday
The FTSE 100 came within a whisker of its all-time high yesterday as global stock markets continue to rise amid investor optimism, reports The Times. The index climbed a further 36.4 points to 6,840.3 — up nearly 16% this year and just 90 points off its peak, which was reached on the last trading day of 1999 before the dotcom bubble burst. Wall Street's S&P 500 stood higher than ever as did Germany’s Dax. The Nikkei 225 was up more than 50% this year. Many investors doubt that shares can continue to rise but some expect more records to be broken. “I don’t think that recent gains are unsustainable,” said Ian Richards, global head of equity strategy at Exane BNP Paribas.
The boss of Ocado says Mark Price, the head of Waitrose, is refusing to meet him after the online grocer struck a partnership agreement with rival supermarket Wm Morrison, reports the Daily Telegraph. Tim Steiner says Waitrose's hostile reaction to Ocado’s deal with Morrisons has been a “joke”, adding that the development is “good” for Waitrose because it makes Ocado financially secure. Steiner who says he has sent emails and text messages to Price, claims Waitrose has been unsettled by the rise of Ocado. “We have gone from a toddler to an unruly teenager. Now we are an adult,” he said. "Sometimes the parent doesn't like it when the child grows up."
UK retail sales slumped in April as shoppers balked at higher prices during one of the coldest springs on record, reports The Guardian. The Office for National Statistics said retailers reported a 1.3% decline in goods sold. Food shops were worst hit: sales of food plunged 4.1% on the month, the weakest showing in almost two years. Stores also suffered a 0.2% contraction in the amount of money spent on the same month a year ago - the biggest year-on-year fall in retail spending since the turn of the century. Analysts say a “feel-good factor” will boost consumer confidence in the months ahead, but at a “gradual” pace.
The UK economy is still a long way from "a strong and sustainable recovery", says the International Monetary Fund. In its annual report on the UK, the IMF called on George Osborne to boost infrastructure spending but toned down its previous criticisms of the chancellor’s austerity strategy, reports the BBC. "It would be, in our view, useful for the economy for infrastructure and other measures to be brought forward to reduce the drag of austerity measures... and provide more support for the economy," said IMF deputy managing director David Lipton. "The recommendations we have made today are fiscally neutral," he added.
Disgruntled bank customers are “voting with their feet” and flocking to building societies, claims Nationwide. The leading building society said it opened 365,000 new current accounts in the year to April, while a record 123,000 customers switched from their main bank during that period, a 58% rise on the previous year. The Daily Mail reports that Chris Rhodes, the group's retail director, said: “Dissatisfaction with the big banks is leading people to vote with their feet.” Announcing a 56% leap in annual underlying profits, Graham Beale, Nationwide's chief executive, said the society's financial position remains "strong and robust”.
The Federal Reserve will keep its short-term interest rate close to zero for a “considerable time” and has no imminent plan to wind down the quantitative easing programme, says chairman Ben Bernanke. However, minutes from the Fed's April meeting show that a number of officials are ready to begin tapering off QE3 as early as June if economic data continues to be healthy. The Financial Times says that a more likely date for the first slowing of QE3 is September. Bernanke said a wind-down would not be an "automatic, mechanistic process". He acknowledged the recovery had been slow but said it had faced "significant headwinds" including deep government spending cuts.
FTSE-100: up +0.54 to 6840.27
Dow Jones: down -0.52 to 15307.17
Dax: up +0.69 to 8530.89
Cac-40: up +0.37 to 4051.11
Nikkei: down -5.43 to 14778.80
Hang Seng: down -2.36 to 22711.82
US dollar: buys €0.77920 and £0.66510
Sterling: buys $1.50370 and €1.17150
Oil: Brent crude futures $102.41 down -1.4