FTSE 100 Live January 25: London stocks point higher after Wall Street rebound, borrowing figures revealed

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Tech’s Reality Bites Moment

Bill Blain, chief strategist at Shard Capital and City veteran, wrote us a good article today on the current global tech sell-off.

Here is a sample:

The Nasdaq gave up all of its gains since June 2021. The Dow and S&P 500 haven’t fallen quite as dramatically, but if you squint hard enough and draw random chart lines, it looks like both have been limited above the last quarter. These “facts” may tell us two things.

First, tech stocks fell further because they were overvalued relative to everything else, and the stock market found its peak. Has he passed it? And, has he still fallen? It depends on how the market’s voting mechanism reacts to sentiment, as determined by relative value, monetary tightening and news flow.

Second, with further increases in bond yields widely expected across the market, the underlying tone appears choppy.

You can read the full article here.

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Wall Street’s collapse cuts the wind from Europe’s sails

Another selloff on Wall Street is shaking confidence on this side of the Atlantic.

The Nasdaq is down 2% in New York after an hour of trading and the S&P 500 is down 1.7%.

The FTSE 100 is still positive but has lost much of its earlier gains. The blue chip index is up 0.4%, but was up around 0.8% at lunchtime.

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Cake Box manager buys stock

What to do when your company’s stock drops? Have a blast buying more in a show of faith in the stock.

Dr Jaswir Singh, chief operating officer of crisis-ridden egg-free cake maker Cake Box, has acquired £35,000 worth of shares in the company.

His decision followed Monday’s stock plunge when the company lost a fifth of its value after admitting accounting ‘irregularities’ which were first revealed by a blogger.

Dr Singh paid 250p and 246.9p for his new shares yesterday, which already looks like a shrewd move, with the stock recovering to hit 290p in early trading on Tuesday.

The company was established in east London in 2008 by founders who followed a strict lacto-vegetarian diet.

Their USP was egg-free party cakes so people could serve birthday treats and not worry about people with egg allergies.

They now have 180 mostly franchise stores across the country.

The shares were quoted at 137.5p in 2018 and hit their year-to-date high of 428p in November 2021.

The price slipped as low as 232p in Monday trade.

Shares fell on news of “a few transcription errors” admitted by the company between its 2021 annual results announcement released on June 30, 2021 and the 2021 annual report and accounts.

The errors included a ‘phantom £2million’ entry in the cash flow statement, variable tax amounts and a number of restated sales figures.

The candy company insisted errors should not impact reported profits, but appointed BDO accountants “to assist in the implementation of best internal auditing practices”.

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Tech stocks’ Reality Bites moment is here, says Bill Blain

This time last year, it was reported that 90% of 627 market professionals surveyed agreed that the stock market was a bubble ready to burst.

Unsurprisingly, a year later, a growing number of market big dogs are calling the current correction the curtain-raiser for a more chaotic market crash.

The Nasdaq gave up all of its gains since June 2021. The Dow and S&P 500 haven’t fallen quite as dramatically, but if you squint hard enough and draw random chart lines, it looks like both have been limited above the last quarter. These “facts” may tell us two things.

find out more here

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Walkers go green

Walkers crisps will soon be served in recycled bags.

The Pepsi owner will test green packaging on a new line of crisps later this year.

The new bags will be made from recycled crisp packets, cookie wrappers, shopping bags and other plastics.

They will also be partly renewable, using plant by-products such as used cooking oils or waste paper pulp.

It plans to offer all of its savory snacks — including Doritos, Quavers, Wotsits, Snack a Jacks and Pipers — in equally green, recyclable bags by 2030.

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Wall Street set to open lower

It looks like another tough open for US markets when trading begins in New York in about half an hour.

Futures point to a 2% drop for the Nasdaq at the open, while the S&P 500 is expected to drop 1.5% at the open. Shares sold off sharply on Monday – with the Nasdaq down 4% at one point – but miraculously reversed in afternoon trading. All three key Wall Street indexes closed slightly higher.

It’s a busy day for earnings today in the US, with major players including Microsoft, Johnson & Johnson, American Express and Verizon.

Here in the UK, the FTSE 100 is holding up despite the futures action. The index is up about 0.8%.

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One of Britain’s most prominent tech backers has told investors to keep the faith despite a sell-off in the sector.

Baillie Gifford’s US Growth Trust today told shareholders to be brave and keep investing despite market volatility.

Management writes in its semi-annual report: “Investing in innovation and entrepreneurship is difficult. Bravery is needed on the part of entrepreneurs and investors alike. Uncertainty and volatility must be accepted. Opening your mind to possibilities is essential.

Scottish asset manager Baillie Gifford is one of Britain’s most prominent technology investors. Its FTSE 250-listed US Growth Trust manages £1 billion on behalf of clients. The top ten holdings include Netflix, Amazon and Tesla.

Read the full story.

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Marston ignores Omicron

The Marston’s chief executive expects Brits to return to the pub now that Plan B restrictions have been lifted.

Andrew Andrea told Standard: “We know there is a demand to go to the pub. We are just starting to see the numbers moving in the right direction. You just feel the confidence coming back.

Figures released this morning revealed the impact of Omicron’s restrictions on the pub group’s business. Sales were down 3.9% from pre-pandemic levels in the 16 weeks to January 12 as the December restrictions derailed the good momentum.

Andrea called Plan B an “eight week hit” and said the Christmas performances were “probably slightly better than I thought”.

Read the full story.

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The sale of arms will collapse

Nvida is quietly preparing to drop its purchase of Arm from SoftBank after making little to no progress in securing approval for the $40 billion chip deal, according to people familiar with the matter.

Nvidia told its partners it did not expect the deal to go through, according to one person, who asked not to be identified because the discussions are private.

SoftBank, meanwhile, is stepping up preparations for an Arm initial public offering as an alternative to buying Nvidia, another person said.

Read the full story.

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Another setback for Credit Suisse

Credit Suisse, the Swiss bank reeling from the sudden departure of Chairman Antonio Horta-Osorio, today issued a profit warning related to legal costs.

It will barely break even for the fourth quarter after setting aside 500m Swiss francs (£400m).

The bank said: “These litigation provisions have been incurred in connection with a number of cases where the Group has more proactively sought settlements and relate mainly to litigation inherited from our investment banking business.”

Read the full story.

Garland K. Long