Oil prices have jumped to their highest level in six months amid reports Israel is bracing for a potential attack by Iran.
Israeli authorities are said to be preparing for drone or missile attacks on government targets that could come within the next 48 hours.
The US is preparing defences and has moved additional resources to the region, while diplomatic efforts to de-escalate tensions are ongoing.
However, oil markets were sent into turmoil as traders feared a widening of the conflict in the Middle East.
Benchmark Brent crude rose towards $92 a barrel, marking its highest since October, when Hamas launched its attack on Israel.
Read the latest updates below.
Thanks for joining us on the blog this week. We’ll be back next week with all the latest from the markets, but I’ll leave you with news that the the billionaire Bitcoin brothers Cameron and Tyler Winklevoss have become co-owners of a semi-professional football team in England.
The husband and wife behind the shirtmaker Charles Tyrwhitt bagged a windfall of more than £21m last year as a return to offices revived demand for tailoring. Hannah Boland reports:
Read the full story…
The FTSE 100 came within touching distance of an all-time high on Friday, driven by a rally for mining stocks and fresh evidence that the UK economy is edging its way out of recession.
The blue-chip index was a whisker away from surpassing 8,047 points, the record it reached in February last year, but retreated in the afternoon.
It closed or 0.91pc higher, reaching 7,995.58.
At one point in the day it was 1.5pc higher, lifted by mining giants including precious metals miner Fresnillo which saw gains of more than 7pc.
The stocks have been buoyed by gold prices hitting record highs and surging oil prices.
Investors were also in better spirits as official data showed that the UK economy grew in February, albeit by just 0.1pc.
But it signalled that the country was taking tentative steps out of the shallow recession it dipped into at the end of the year.
Apple shares could be back in favour with the markets after reports that the company is planning to refresh its range of Macs with new processors designed with AI in mind
Shares have performed poorly since the start of the year amid concerns that the computer and consumer electronics giant lacks a coherent strategy for artificial intelligence.
They are down more than 5pc since January 1. But yesterday they jumped 4.3pc, and they have edged up slightly today as well.
Anthony Saglimbene, chief market strategist at Ameriprise Financial, told Bloomberg:
Daniel Skelly, head of Morgan Stanley’s wealth management market research and strategy team, said:
Consumer sentiment about the US economy has ticked down but remains near a recent high, according to new data released today.
The University of Michigan’s consumer sentiment index slipped to 77.9 this month, down from March’s figure of 79.4. Sentiment is about halfway between its all-time low, reached in June 2022 when inflation peaked, and its pre-pandemic averages.
Joanne Hsu, director of the consumer survey, said:
An increase in petrol prices likely contributed to the decline in consumers’ outlook, according to Ian Shepherdson, chief economist at Pantheon Macroeconomics. The average national price of a gallon of petrol has jumped about 7pc from a month ago.
Americans’ perceptions of future inflation also edged up, probably reflecting still-elevated prices. Consumers expect inflation to be 3.1pc a year from now, which would exceed the Federal Reserve’s 2pc target. Still, that would be below the current level of 3.5pc.
BlackRock chief Larry Fink said today that he expects the Federal Reserve to cut rates at most twice this year.
The investment giant boss said that it would be tricky for the Fed to curb inflation, according to comments made on CNBC and reported by Bloomberg.
“I think 2pc is a hard number” to achieve, Mr Fink said. “We have restructured how we frame our economic policy.”
Asda is yet to resolve a payroll crisis that has left swathes of workers out of pocket, piling further pressure on boss Mohsin Issa.
Wall Street has opened lower this afternoon as tech stocks fell and results for some big banks disappointed investors.
The benchmark S&P 500 dropped 0.5pc, while the Dow Jones was down 0.4pc. The tech-heavy Nasdaq dropped 0.9pc.
Apple has lost its bid to throw out a lawsuit worth almost £800m over allegations the tech giant charged unfair fees on its app store.
The case, brought by 1,500 developers, alleges that Apple abused its dominant market position by charging third-party developers commissions of up to 30pc on purchases of apps or other content.
It was brought by economist Sean Ennis in the Competition Appeals Tribunal last year seeking damages for UK-based developers.
Apple has said 85pc of developers on its app store do not pay any commission at all.
Lawyers argued that developers cannot have a claim in the UK unless they were charged on purchases made through the UK app store, and attempted to have the case thrown out.
But judge Andrew Lenon rejected the bid, saying that the claim had a realistic prospect of establishing that the overcharging of commission did amount to conduct implemented in the UK.
JPMorgan Chase reported higher profits in the first quarter thanks to elevated interest rates and service fees as the bank’s chief executive cautioned about geopolitical uncertainty and the risk of persistent inflation.
Profits rose 6pc to $13.4bn, boosted by higher net interest income as it charged more for loans.
JPMorgan, which also cited increased asset management and investment banking fees as positive drivers, reported revenues of $41.9bn, an increase of 9pc
Markets were a weak spot, with trading revenue dropping for fixed income and flat for equities. The net interest income was also slightly short of analyst forecasts, sending shares down.
Jamie Dimon, chief executive of JP Morgan, touted “strong results” in the period, but flagged a number of concerns including “terrible” ongoing wars, a large number of “persistent inflationary pressures” and shifting monetary policy.
He said: “We do not know how these factors will play out, but we must prepare the firm for a wide range of potential environments to ensure that we can consistently be there for clients.”
Apple has sent warnings to dozens of iPhone users in more than 90 countries that they may have been hacked by “mercenary spyware”.
Here’s another factor that’s been blamed for the Bank of England’s dodgy forecasts – outdated IT systems.
The Bank of England is today seeking to get better at forecasting following a review by the former US Federal Reserve chairman Ben Bernanke.
It follows an underwhelming history of predictions by the Old Lady, from underestimating inflation and then overestimating it, to wild errors on pay growth and economic output.
Melissa Lawson explores five of its biggest recent blunders. Read her story here.
While Andrew Bailey vowed to learn from mistakes, the governor stopped short of apologising.
He said: “We do not do hindsight. I don’t think it is appropriate to consider whether we would have made different decisions.”
“Would we have communicated our decisions differently? I think the answer to that is yes we would.
“I am not using the word blame. It is not about blame. It is about causes. We went through some huge global shocks. They had an effect. We used monetary policy as appropriate to take into account and offset the effects of them.”
Our tech editor James Titcomb reports. Read his full story here.
The pound has slumped to a five-month low even as new figures showed the UK economy is on track to exit recession.
Sterling was down 0.5pc against the dollar at $1.249, the lowest since mid-November, and is on track for a weekly loss of 1.1pc.
It comes amid a surge in the dollar after hot US inflation data led to markets slashing expectations of interest rate cuts by the Federal Reserve.
All eyes will now turn to inflation and jobs figures due next week for signs of how the Bank of England is likely to act.
The owner of Fiat has become embroiled in a fresh row with the Italian government after announcing plans to build Alfa Romeo cars outside the country for the first time.
UK housebuilders have enjoyed their biggest share boost so far this year amid hopes of a boost from the upcoming election.
JP Morgan upgraded its ratings on several major housebuilders, saying it expects a positive outcome for the sector regardless of who wins.
Analysts said the topic of affordable housing and reforming the planning system will continue to gain traction. “We expect the sector to continue to be at the forefront of conversations in order to attract votes,” they wrote.
A further boost to completions is expected from upcoming interest rate cuts by the Bank of England.
JP Morgan’s upgrades included Persimmon, Taylor Wimpey, Vistry and Barratt Developments.
A FTSE index tracking householder shares gained as much as 3pc, the most since December.
Beijing has ordered telecoms companies to rip out foreign chips from their core networks, in a move that mirrors the Western crackdown on Huawei.
China’s Ministry of Industry and Information Technology issued the directive to tear out foreign equipment by 2027 earlier this year, the Wall Street Journal reported.
The move mark a major blow to US chipmakers such as Intel and Advanced Micro Devices, whose shares fell in pre-market trading.
Authorities told state-owned operators such as China Mobile, China Unicom and China Telecom to inspect their networks and come up with timelines to replace them.
It comes after countries including the UK and US ordered telecoms companies to remove all equipment made by Chinese tech giant Huawei from their network amid concerns about espionage, which the company has always denied.
ICYMI – AstraZeneca has suffered an investor backlash over a £19m pay award for its chief executive, in a vote that will deepen concerns of an exodus of UK companies to the US.]
A wave of of Ukrainian drone attacks on Russia’s oil refineries risks disrupting global fuel markets, the International Energy Agency has warned.
Ukraine has ramped up attacks on Russia’s oil industry this year in an attempt to disrupt fuel supplies to the military and curb the Kremlin’s revenue.
About 500,000 to 600,000 barrels a day of the country’s crude processing capacity could be offline this quarter on a gross basis before offsets, according to the IEA’s monthly report.
The IEA warned the shutdown of damaged refineries of up to two months for repairs “could mean a significant loss” of Russian oil exports.
It comes after US Defense Secretary Lloyd Austin warned that Ukrainian attacks “could have a knock-on effect” on the global energy market.
Samsung is preparing to unveil a $44bn investment in US chipmaking as soon as next week as Washington tries to bring production back to the US.
The world’s biggest chipmaker plans to outline the project in Texas alongside Commerce Secretary Gina Raimondo, Bloomberg reports.
Samsung has secured more than $6bn of government grants for an investment that’s expected to total $44bn over multiple years.
It comes as Joe Biden’s administration tries to revitalise US chipmaking after decades of production shifting to Asia and challenge the technological rise of China.
Here’s some more on those BP reports:
The United Arab Emirates’ state-owned oil company recently considered buying BP, but the conversations did not progress beyond preliminary discussions.
Abu Dhabi National Oil Company (ADNOC) ultimately decided BP would not be the right fit for its strategy while political considerations also weighed on the potential move, Reuters reported.
Shares in BP are up around 2.4pc this morning.
UK stocks are on track for weekly gains amid growing optimism about the health of Britain’s economy.
The blue-chip index rose as much as 0.8pc in early trading, while the domestically-focused FTSE 250 was up 0.7pc. Both are on track for a weekly rise.
Precious metal miners including Fresnillo led the gains as gold prices rose to an historic high. Industrial miners also rose as aluminium prices hit a two-year high.
BP shares were up more than 2pc following reports that the United Arab Emirates’ state-owned oil company recently considered buying the energy giant.
Fortnite maker Epic Games has asked a US judge to force Google to make some changes to its Play Store.
The request, made to a judge in California, comes after Epic won a blockbuster trial against Google over claims the tech giant abused its power as a gatekeeper for apps on the Android mobile platform.
The City watchdog has told car finance firms to start preparing for extra costs from its review of the market.
The Financial Conduct Authority (FCA), which has been reviewing historical commissions for car loans since January, said all companies need to “plan for any additional operations costs from increased complaints and, where applicable, to meet the costs of resolving those complaints”.
Lloyds, which is the biggest provide of car finance, has set aside £450m to pay possible fines and other costs. Close Brothers has said it won’t pay any dividends in 2024 as it looks to shore up its balance sheet.
By contrast, Barclays has opted not to make a provision for the probe as it has a relatively low market share and hasn’t received a material number of complaints.
Disgraced FTX founder Sam Bankman-Fried has appealed his conviction and 25-year prison sentence for stealing $8bn from customers of his now-bankrupt cryptocurrency exchange.
The 32-year-old former billionaire was convicted in November on seven counts of fraud and conspiracy in what federal prosecutors have called one of the biggest financial frauds in US history.
His appeal could take years, and he faces a tough challenge persuading the courts that US District Judge Lewis Kaplan made significant errors that deprived Bankman-Fried of his legal rights and made the trial unfair.
The FTSE 100 has started the day on the front foot after the latest ONS data showed the economy grew in February.
The blue-chip index rose 0.8pc as markets opened to 7,986 points.
Away from GDP, oil prices are back on the rise this morning as Israel braces for a potential strike by Iran.
The US believes an attack on Israel is imminent in response to a strike on Iran’s diplomatic compound in Syria last week. The Wall Street Journal reported that authorities are preparing for an assault in the next two days.
Benchmark Brent crude rose above $80 a barrel after closing 0.8pc higher yesterday. West Texas Intermediate rose towards $86.
Traders are also looking ahead to a report from the International Energy Agency, due later today, which will give a view on the outlook for global supply and demand.
Dr Roger Barker, director of policy at the Institute of Directors, is also gloomy about the outlook:
The British Chambers of Commerce has a somewhat less positive take on the situation.
Construction was the real laggard in the UK economy in February, with output contracting by 1.9pc.
ONS officials blamed heavy rainfall, which delayed planning work and decreased output.
The Met Office confirmed that the southern half of the UK in particular saw more than twice the average rainfall in February 2024, and it was the fourth wettest February on record in England.
Neil Birrell, chief investment officer at Premier Miton Investors, says:
Paul Dales, chief UK economist at Capital Economics, is more focused on interest rates.
Suren Thiru, economics director at ICAEW, is confident Britain is out of recession.
It’s an upbeat start to the day as the latest ONS stats show the UK economy grew 0.1pc.
Liz McKeown, ONS director of economic statistics, said:
1) AstraZeneca hit by investor backlash over chief Pascal Soriot’s £19m pay deal | Vote to reject remuneration deepens concerns over London stock market exodus
2) BP draws takeover interest from UAE oil giant | https://www.telegraph.co.uk/business/2024/04/11/bp-draws-takeover-interest-from-uae-oil-giant/
3) No evidence diverse management teams boost profits, says study | New research disputes claims diversity is a ‘business imperative’ that drives financial results
4) Fiat dynasty snubs Giorgia Meloni by building flagship car outside Italy for first time | Industry minister claims building new Alfa Romeo in Poland is ‘forbidden by Italian law’
5) Telegraph faces financial stability threat from Barclay family | Lloyds’ knowledge of suspicious transactions could prompt it to withdraw financing
The S&P 500 rose 0.7pc, to 5,199.06. The Nasdaq Composite charged up by 1.7%, to a record 16,442.20. The Dow Jones Industrial Average, which has less of an emphasis on tech, was the laggard. It slipped by less than 0.1pc, to 38,459.08.
Meanwhile, the yield on the 10-year Treasury bonds rose to 4.57pc from 4.55pc late on Wednesday.
Shares fell at the open of business in Hong Kong on Friday as tech firms suffered early selling, while traders shrugged off a positive lead from Wall Street.
The Hang Seng Index slipped 0.68pc, or 116.33 points, to 16,978.70, the Shanghai Composite Index was flat, nudging up 1.33 points to 3,035.58. And the Shenzhen Composite Index on China’s second exchange also barely moved, inching down 0.60 points to 1,721.00.
Tokyo stocks opened higher, the benchmark Nikkei 225 index up 0.65pc, or 257.37 points, at 39,700.00 in early trade, while the broader Topix index added 0.50pc, or 13.77 points, to 2,760.73.