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FTSE 100 Live: Shell Launches $ 5.5 Billion Buyout, Home Prices Rise Again, US Jobs Report

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Home prices rose another 1.1% last month as the housing market continues to defy expectations.

Today’s report from lender Halifax shows a new record average price of £ 276,091, which represents an increase of over £ 24,500 or 9.8% in 2021. This is the largest annual growth since July 2007, driven by a lack of available homes for sale and low mortgage rates.

In financial markets, the FTSE 100 index is experiencing a quieter session after falling 0.9% yesterday. However, US employment figures due for release later today could cause further turmoil.

Live updates

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Analysts Respond to U.S. Jobs Report and Missed Forecast

Richard Flynn, managing director of Charles Schwab UK, said the report “could increase investor caution”.

He pointed to the report’s confirmation of strong wage growth – a key factor for high inflation.

Flynn said: “Investors’ unease with inflation is justified, the consumer price index (CPI) being well above the five-year average of its annual change.”

He added: “By 2022, it is too early to say for sure the impact that Omicron will have on the US economy. However, if the threat of future lockdowns fades, more confident growth prospects could emerge, and with them, a potential acceleration in labor supply. “

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US Jobs Report: Job Growth Slows

The latest expected US employment report has just been released.

Data released by the Bureau of Labor Statistics revealed that US employers created 199,000 jobs in December, well below the 400,000 predicted by economists.

There were 249,000 jobs created in November.

On the positive side, the report found that the US unemployment rate fell further last month, falling 0.3 percentage points to 3.9%.

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Salary increase en route to Sainsbury’s

Sainsbury’s announced further salary increases

/ PA wire

Sainsbury’s supermarket chain has become the latest retailer to announce wage increases, with base hourly rates of at least £ 10 per hour.

Grocer FTSE 100, also behind Argos, said the hourly rate for store workers would drop from £ 9.50 to £ 10 an hour.

The increase inside London is £ 11.05 instead of £ 10.10, and £ 10.50 instead of £ 9.75 outside London.

Read the full story here.

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Bitcoin down 10% this week

The price of bitcoin continues to come under pressure amid a wider sell-off of growth and risk assets.

Bitcoin is down 1.2% to $ 42,361 at time of entry, its lowest level since September. The world’s largest cryptocurrency is now down 10% since Monday.

Russ Mold, Chief Investment Officer at AJ Bell, said: “Bitcoin’s extreme volatility continues as it drops to its lowest level since September to less than $ 41,000 after hitting a record high of $ 69,000 in November. Whatever the merits of cryptocurrency, such wild swings would prevent it from supplanting traditional currencies any time soon.

Bitcoin was caught in a global sell-off of risky and growth assets after the U.S. Federal Reserve signaled it would likely raise interest rates at a faster rate than expected. This will create opportunities for returns in less risky areas and should increase the cost of capital for many companies. This is especially bad for growth-driven tech companies, many of which depend on cheap funding to keep the party going.

Bank of America analysts said in a note this week that the “bubble in long-lived technology, crypto, [and] leverage assets [is] bursting simultaneously.

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Exscientia’s $ 5.2 billion deal with Sanofi

French drug maker Sanofi has signed an agreement worth up to $ 5.2 billion to use Oxford Exscientia’s biotechnology AI technology to develop 15 new potential cancer and immunology drugs.

Exscientia, which went public with a $ 510 million IPO on the Nasdaq last year, will get $ 100 million upfront plus milestone payments and royalties of up to 21% if a drug hits the market.

The company, which was supported from the start by the Bill and Melinda Gates Foundation, is deploying machine learning to accelerate the design and development of promising new therapies.

Founder and CEO Andrew Hopkins said testing AI-designed drug candidates against patient tissue models has the potential to improve accuracy over conventional approaches.

“When you consider the change that this represents – testing candidates in real human tissue years before a clinical trial – it’s transformative,” he said.

It came as AstraZeneca subsidiary Alexion signed a $ 730 million deal to develop, license and market the heart drug NI006 from Swiss company Neurimmune.

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Shell must be cautious about soaring gasoline prices

John F Kennedy once said, “In a crisis, be aware of the danger, but recognize the opportunity. “

For Shell CEO Ben van Beurden and colleagues, the opposite could be true: When you seize an opportunity, be aware of the danger.

The oil major told investors today that profits from its gas trading activities are expected to be “considerably higher” thanks to soaring prices. In the same update, Shell announced plans to return an additional $ 5.5 billion to investors through a buyout.

The two are unrelated: The funds for the buyout come from the sale of its Texas oil business last year, not the gas bonanza. But management should be wary of the public who confuse the two.

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Shell disburses

Shell to return the remaining $ 5.5 billion (£ 4 billion) of proceeds from the sale of its Permian Basin oil fields to investors ‘at a rate’ amid mounting pressure to accelerate the switch to clean energy .

The oil and gas major – which this week reclaimed its crown as the most valuable UK company with a market cap of £ 130 billion – sold the US operation of 175,000 barrels per day to Texas-based ConocoPhillips for $ 9.5 billion.

It will use $ 2.5 billion to consolidate its balance sheet and distribute the rest through a share buyback program as it faces pressure from activist investors, pension funds and environmental activists.

In an update, the company also said its natural gas trading business overcame supply chain increases that hit earnings earlier in 2021 to post “significantly higher” earnings in the fourth quarter. .

But its petroleum trading and refining unit is on track to post a loss, with its results being impacted by Hurricane Ida in the Gulf of Mexico.

Shell is abandoning its dual Anglo-Dutch listing and moving its headquarters to London this year to simplify its structure. Shares rose 0.2% to 1,721p.

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No more inflation – this time in Europe

New Eurozone inflation data came out this morning and, again, beat expectations.

The consumer price index for December stood at 5%, against expectations of 4.7%.

Jesús Cabra Guisasola, Senior Partner at Validus Risk Management, said: “Some of the factors contributing to this increase can be found in Spanish and Italian inflation figures which have been increasing at the fastest pace in decades. Both economies recorded inflation at 6.7% and 4.2% compared to a year ago, mainly due to soaring electricity prices which continue to push up household spending. “In contrast, Germany and France reported slowing inflation figures, with prices rising 5.7% and 3.4% from a year ago, and down from a year ago. at 6% and 3.5% of the previous month. “During last month’s meeting, Christine Lagarde mentioned that inflation is expected to remain high in the near term with a slowdown in 2022. Therefore, we should not expect these mixed numbers to alter the accommodative stance of the ECB in the coming months and continue with the plan to end net asset purchases under the emergency program by March. “The divergence between the direction of the ECB and the Fed could lead to a further depreciation of the euro against the USD in 2022 if the Fed decides to offer the three hikes that most market participants are currently anticipating before the end of the year. “

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C&C shares fall: Plan B ruins Magners’ Christmas

C&C shares fell this morning after cider maker Magners said key hospitality business in December was “significantly affected” by Plan B restrictions.

The Dublin-based group, which also makes Bulmers and Tivez’s lager beer, said the month’s performance was below expectations and warned that its second half operating profits “will be affected by the nature, extent and the duration of government restrictions “.

C&C has raised funds from investors since Covid struck, cut costs and raised prices, and said today it has more than enough cash.

The FTSE 250 company was performing well before the pandemic, with a 12-month turnover at the end of February 2020 of 1.7 billion euros.

Jefferies analysts said they “recognize that the external environment is volatile.”

The company’s shares fell 3%, or 6.9p, to 229.7p this morning.

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The used car market has “challenged the economy”, according to the boss of Lookers

The Lookers boss said today that the boom in the used car market has “defied the economy” and is expected to subside in the second half of 2022.

Mark Raban said the listed dealer was “very cautious” despite expecting record pre-tax profits for 2021.

He told The Standard: “The question of the review is: how long is this going to continue? We’ll definitely see that continue throughout the first half of the year, and I think it will generally start to ease as we approach the second half of the year.

“What happened in the market challenged the economy. Used car prices are not going up, they are going down. It was very exceptional, so we are very careful.

Global chip production has slowed due to supply chain and logistics issues related to the pandemic, which has slowed the production and supply of new cars.

Consumers face long wait times for new models, which, combined with the savings from the pandemic and mistrust of public transport, has contributed to the boom in the used car market.