Tech surge pushes Nasdaq to new record high

Eurozone stocks finished higher today on the back of the EU agreeing on the terms and conditions of the €750bn rescue package

The FTSE 100 closed 0.13pc up while the FTSE 250 pushed 0.67pc higher.

David Madden of CMC Markets says: The confirmation that a compromise was reached came through in the early hours of today, and that helped stocks get off to a flying start this morning.

The €750 billion fund will be divided into €390 billion of grants and €360 billion of loans, and keep in mind the initial proposal was for €500 billion in grants and €250 billion in loans.

Stocks are off the highs of the session, probably because traders felt that some sort of a compromise was always going to be achieved in the end. Besides, the EU is not known to move quickly, so the funds might not be deployed for months. 

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03:31 PM

Demand for books in lockdown helps lift Bloomsbury

Bloomsbury Publishing revealed an 18pc rise in sales to £49.5m in the 4 months to the end of June, ahead of expectations.

The Harry Potter publisher said lockdown helped digital sales surge by over 60pc.

UK revenues rose by 16pc while US revenues grew by 38pc against the same period last year. However, its outlook for the rest of the year remains “uncertain”.

03:24 PM

Handover

With only a few minutes left until markets close, it’s time for me to hand over to my colleague LaToya Harding, who will steer the blog into the evening. Thanks for following along today!

03:06 PM

Persimmon boss dumps more shares

Persimmon’s outgoing boss Dave Jenkinson has sold 50,000 shares – his second batch in less than two months.

My colleague Rachel Millard reports:

Mr Jenkinson, 52, offloaded 50,000 shares on Monday at £26.20 each – netting him £1.3m.

It followed his sale on June 5 of 89,581 shares at £24.70 each or £2.2m in total. He still owns over 700,000 shares.

In February, he announced his plans to step down from the housebuilder. He had taken over 15 months before, following the exit of predecessor Jeff Fairburn – who left amid a row over his £75m bonus.

02:55 PM

Total cost of Covid-19 support schemes at nearly £68bn

Just in: After an unexplained publication delay, the latest Covid-19 spending figures are out.

They show the amount spent across the Government’s various business and employment support schemes has reached almost £86bn. I’ve included the Future Fund for the first time as it near £0.5bn. 

Here are the numbers by scheme:

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02:33 PM

JLR risks being caught up in UK–China feud

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Jaguar Land Rover could be one of the biggest victims if China decides to retaliate over deteriorating relations between London and Beijing.

My colleague Alan Tovey writes:

Britain’s largest car maker depends on China for about a fifth of all its sales, many of which are its more lucrative Range Rover and Range Rover Sport models which are exported from the UK.

Tension between the two countries has been growing because of the UK’s decision to remove Huawei technology from communications infrastructure, with the row expanding into other areas.

Publications backed by the Beijing regime have now warned of the potential economic consequences that could befall British companies operating or selling in China, directly naming JLR as one of them.

The Global Times, a Chinese Communist Party mouthpiece, said that trade talks could be “slowed or suspended”, adding that if the UK “upholds such a hostile attitude toward China, Beijing may have no other choice but to strike at British companies like HSBC and Jaguar Land Rover”. 

A “boycott of British brands such as JLR and Burberry could be likely options for Chinese consumers” the publication added. 

JLR is already being hammered by the collapse in car sales caused by coronavirus, falling to a £501m annual loss last month, leading to more than 1,000 jobs going.

02:28 PM

European gains cool

With just over an hour until the close, gains have cooled slightly on Europe’s main indices, with the CAC 40 notably shedding most of the day’s rise. 

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02:13 PM

Coca-Cola says it is through its worst quarter and trading will get better from here

Coca-Cola has posted results this afternoon and says the worst of the hit from the pandemic is over. 

Bloomberg has the details:

Coca-Cola investors breathed a sigh of relief Tuesday as the soda maker whose major amusement-park and stadium customers were on lockdown during much of the second quarter confirmed it has made it through the worst.

“There are some unknowns ahead of us, some markets regressing, but I think on an overall basis, we will see the next six to nine months improving around the world,” Chief Financial Officer John Murphy said in a phone interview. Chief Executive Officer James Quincey said the second quarter will likely “prove to be the most challenging of the year.”

In fact, the incremental improvement has already started. After falling 25% in April from last year’s levels, global unit case volume was down just 10% in June and is only showing a mid-single-digit decline so far in July. That return to near-normalcy comes as more consumers globally emerge from their homes to enjoy entertainment — and order Cokes.

Coca-Cola’s share prices rose, climbing as much as 3.9%, the biggest intraday gain in nearly two months. The shares were down 17% this year through Monday.

01:55 PM

Downing Street: PM and Pompeo committed to strong trade deal

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Boris Johnson and Dominic Raab’s meeting with US Secretary of State Mike Pompeo has concluded. Here’s a statement from Number 10 on what was discussed:

Joined by the Foreign Secretary, the Prime Minister and Secretary of State discussed the importance of 5 Eyes countries taking an ambitious approach to working together on the technologies of the future.

They spoke about shared global security and foreign policy issues, including China’s actions in Hong Kong and Xinjiang, the situation in Iran and the Middle East Peace Process.

The Prime Minister and Secretary of State also underlined their commitment to negotiate a strong UK-US Free Trade Agreement that benefits the economies of both countries.

The Prime
Minister reiterated the need for justice to be done for Harry Dunn and his family. He said there was a strong feeling among the people of the UK that justice must be delivered.

01:44 PM

Wall Street gains at the open

US stocks have started the day in positive territory, with the tech-focused Nasdaq hitting a new record high after the US Congress negotiated a fresh relief package for businesses. 

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01:15 PM

Rolls-Royce wins contract for next-generation helicopters

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Rolls-Royce has won the contract to provide engines for what could be a massive programme to develop a new generation of helicopters for the US Army.

My colleague Alan Tovey reports:

The FTSE 100 engineer will produce the propulsion system for Bell-Textron for its V-280 Valor aircraft, which is competing to win the contract for the US Future Long-Range Assault Aircraft (FLRAA) programme.

Unlike traditional helicopters with a rotor disk, the V-280 has two sets of blades which can be rotated forwards for level flight or upwards to hover like a helicopter.

Each set of blades is powered by a separate engine though in an emergency both can be driven by one engine.

Rolls is likely to build the engines and associated systems at its US defence facilities, centred around Indianapolis.

The FLRAA could mean thousands of orders for aircraft for the winner of the competition, with it expected to replace the current Black Hawk helicopter, which the US Army has more than 2,000 of.

12:48 PM

…and apparently Dominic Raab enjoyed them too

12:43 PM

US’s Pompeo: ‘Constructive’ talks held

The US Secretary of State tweets: 

12:05 PM

Hargreaves Lansdown shares ju
mp after Robinhood delays UK launch

One immediate beneficiary of trading platform Robinhood’s decision to delay its UK launch (see 11;33am update) is Hargreaves Lansdown. The investment service’s shares have popped about 7pc higher following the news.

11:40 AM

Markets steady

Not much is shifting on the markets. The only major European corporate news to have come in over recent minutes is from German lender Deutsche Bank, which said it expects results for the second quarter to come in “slightly” above consensus.

11:11 AM

Volvo expects demand bounceback in second half of year

Volvo expects demand for its cars to bounce back in the second half of the year, with the Swedene-based, Chinese-owned business giving one of the sector’s most positive outlooks.

Our industry editor Alan Tovey reports:

The company which is owned by Geely reported sales down 14.1pc to 111.8bn SEK  (£9.8bn), driving it to a 989m SEK operating loss. 

The coronavirus which forced factories and dealers around the world to close and saw motorists rein in spending meant Volvo’s car sales fell by a fifth during the six months to 278,000.

However, Håkan Samuelsson, chief executive, was bullish about the future. “The downturn we saw in the first half is a temporary one,” he said. “We expect to see a strong recovery in the second half of the year.”

China, the first market to reopen after Covid-19 lockdowns, saw sales rise in the second quarter, making up much of those lost in the preceding three months with overall performance for the half-year down just 3pc. 

The US also returned to growth in June, though sales for the half-year were still down 13.7pc. Europe was 29.5pc below the same period a year ago.

10:33 AM

Robinhood delays UK launch

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Stock-trading app Robinhood has scrapped its launch in the UK, stating that “a lot has changed in the world” in recent months.

My colleague James Cook reports:

The US app, which has won over millions of millennial investors for making it easy to invest in the stock market, was due to launch in Britain earlier this year.

In June, the company said it had delayed its launch but was fully intent on having it live by the end of this year.

The company attributed the outages to “stress” on its infrastructure as trade volumes swelled. The app is facing lawsuits from angry customers who felt they lost out on a day when US stocks climbed 4.6 per cent – one of the biggest gains since the financial crisis.

10:31 AM

Capco collects just 27pc of rent for third quarter

Covent Garden landlord Capital and Counties has collected just 27pc of rent due for the third quarter, as the coronavirus crisis continues to harm restaurants and shops.

My colleague Rachel Millard reports:

The business, which is b
uying a 26.3pc stake in London rival Shaftesbury, said it was negotiating agreements with tenants struggling to pay, including deferrals and payments linked to turnover.

Landlords have been hammered by the lockdown as tenants were forced to close their shops and restaurants, starving them of income and leaving them unable to pay the rent.

Capco said the value of its Covent Garden estate had fallen by 17pc to £2.2bn, almost all of which related to the retail and leisure part of the portfolio.

It collected 98pc of rent for the first quarter, 44pc for the second quarter, and 27pc for the third quarter.  The 71pc collected during the first six months of the year compared to 99pc during the same period in 2019. 

10:04 AM

Market moves

With just over three hours of trading past, European shares are up solidly – but the FTSE 100 is lagging the pack, rising only moderately. 

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Markets.com’s Neil Wilson said the EU deal has put the wind in investors’ sails, and paves the way for stronger political union across the bloc:

The agreement is a classic EU fudge that papers over the schisms but is nonetheless a step forward towards ever closer union, and this time it’s fiscal. 

This has been hailed as Europe’s ‘Hamiltonian moment’ as it involves mutual debt issuance. It’s not quite that – we are not talking about mutualisation of countries existing debts. Nevertheless, it sets an important precedent in securing the idea of fiscal coordination, if not union.

09:52 AM

Treasury launches spending review

Chancellor Rishi Sunak has launched the Treasury’s 2020 Comprehensive Spending Review, which will set out spending plans for the current Government.

The review will set resource budgets for Government departments for the years 2021/22 to 2023/24, as well capital budgets for the years 2021/22 until 2024/25, and devolved administrations’ block grants for the same period.

The Treasury said the review focus on:

• strengthening the UK’s economic recovery from COVID-19 by prioritising jobs and skills
• levelling up economic opportunity across all nations and regions of the country by investing in infrastructure, innovation and people – thus closing the gap with our competitors by spreading opportunity, maximising productivity and improving the value add of each hour worked
• improving outcomes in public services, including supporting the NHS and taking steps to cut crime and ensure every young person receives a superb education
• making the UK a scientific superpower, including leading in the development of technologies that will support the government’s ambition to reach net zero carbon emissions by 2050
• strengthening the UK’s place in the world
• improving the management and delivery of our commitments, ensuring that all departments have the appropriate structures and processes in place to deliver their outcomes and commitments on time and within budget

It warned that there will be “tough choices” to make due to Covid-19, saying departments “have been asked to identify opportunities to reprioritise and deliver savings”.

Mr Sunak said:

The Comprehensive Spending Review is our opportunity to deliver on the third phase of our recovery plan – where we will honour the commitments made in the March Budget to rebuild, level up and invest in people and places spreading opportunities more evenly across the nation.

09:36 AM

Russia report released

The Intelligence and Security Committee of Parliament’s report on Russia has been released.

• It can be read in full here

Our politics team reports:

The Government failed to protect the 2016 Brexit vote from potential Russian interference, the long-awaited Intelligence and Security Committee report has said. 

The committee said that it had not seen any evidence to suggest Russia had successfully meddled in the 2016 vote. 

However Downing Street “belatedly realised the level of threat” posed by Russia, only realising after thousands of Democratic National Committee (DNC) emails that had been stolen were leaked a month after the EU referendum took place. 

09:34 AM

Bezos added $13bn to his fortune yesterday

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 Jeff Bezos added $13bn (£10.2bn) to his fortune on Monday in what is believed to be the largest single-day wealth jump for an individual ever recorded.

My colleague Hasan Chowdhury reports:

The 56-year-old founder of Amazon has seen his value grow by $74bn this year to $189.3bn, according to the Bloomberg Billionaire Index.

It comes after as an 8pc climb in the Amazon’s share price on Monday, the most since December 2018, following rising optimism about web shopping trends. Amazon’s shares are now up 73pc this year.

The rally, which puts Mr Bezos’ net worth at a higher valuation than some of America’s largest blue chip companies, was also driven by renewed optimism in Amazon from analysts, who forecast sustained growth for the business. 

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09:15 AM

TalkTalk flat after moderately positive update

Shares in telecoms group TalkTalk has remained broadly unchanged during trading today, despite a moderately upbeat trading update this morning.

The FTSE 250 group said its earnings outlook was “stable to growing”, an improvement from the “stable” view it took in last month’s results.

Its revenues fell to £358m in three months to the end of June, down from £387m for the same period last year. It blamed the contraction on Covid-19, which it said had restricted operations, led to a fall in live sports, and exacerbated a decline in phone calls.

Tristia Harrison, its chief executive, said:

[We] see a positive outlook to H1 and are confident in our full year plan…

Encouragingly customer payment trends are in line with the pre-Covid-19 period and we continue to see an ever-increasing demand for our higher speed Fibre and Ethernet products.

Jefferies’ Jerry Delis noted there was no update this morning on the group reaching a long-term contract with BT wing Openreach over access to its fibre networks. Ms Harrison said talks were “ongoing”.

09:06 AM

Pound hits five-week high

The pound has continued an upwards trend today, hitting a five-week high against the dollar amid a risk-hungry mood on global markets:

That rise puts pressure on London’s top international earners – dragging on the FTSE 100, which is already underperforming its European peers.

08:45 AM

UK table bookings picking up

Kantar’s latest research (see 8:26am update) suggested high levels of hesitancy among Britons over the prospect of dining out. Data from OpenTable seems to carry out that thesis – restaurant bookings through the platform are still at roughly half their 2019 levels.

The UK has undergone a strong comeback in recent weeks as lockdown measure ease, but interestingly the data shows a big gap between London and the rest of the UK – people in the capital seem more averse to a meal out.

08:27 AM

Money round-up

Here are some of the day’s top stories from the Telegraph Money team:

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08:05 AM

GVC shares drop as HMRC launches probe

Ladbrokes owner GVC has warned it is under investigation by HM Revenue & Customs for “potential corporate offending” at the group’s former Turkish online gambling business.

My colleague Simon Foy reports:

The FTSE 100 firm said it was informed on Monday that the tax authority was widening the scope of an investigation and was now examining an unidentified entity within GVC for potential foul play. 

Prior to that, the company understood that no GVC entity was subject to the probe launched by HMRC last year, which it thought was directed at former third-party suppliers and related to the processing of payments for online betting in Turkey.

The gambling giant said it was surprised by the decision and disappointed by the lack of clarity provided by HMRC regarding the scope of its investigation.

07:53 AM

DAX close to erasing year’s losses

Amid solid gains today, Germany’s DAX is now within inches of shedding all its losses so far this year – down just 1pc currently.

The strong comeback, which puts the DAX’s performance nearly in line with the US benchmark S&P 500, reflects a striking outperformance by European equities driven by hopes over today’s rescue deal.

07:44 AM

Ted Baker pops after hailing ‘strong start’ on strategic goals

Shares in Ted Baker have jumped higher this morning, after the group said it had made a “strong start” on its long-term targets amid “resilient” trading.

The retailer’s revenue dropped 55pc compared to last year over the 11 weeks to July 18th amid disruption caused by Covid-19, with 35pc drop in online sales unable to offset wider drops. Store sales fell 79pc.

Ted Baker said the performance was ahead of its base case scenario, with online trading “significantly ahead of expectations”.

Rachel Osborne, its chief executive, said:

Our performance is encouraging, but I caution that it is still early days, and we have a substantial amount of work to do over the next 12 months against a backdrop of significant uncertainty in the world.  However, the brand has an exciting future, and I am looking forward with cautious optimism that the initiatives currently underway across all areas of the business will bear fruit over the next 12 months.

Liberum’s Wayne Brown praised today’s update, saying:

The delivery against very clear targets and more immediate milestones highlights a clear direction from the new management team.

07:26 AM

Morrisons expands market shares for first time since 2015

The UK grocery sector grow 16.9pc over the past 12 week, the fastest expansion since records began in 1994, according to Kantar.

However, the pace of expansion has slowed in recent weeks, suggesting “shoppers are tentatively returning to more normal routines”.

Morrisons, which experienced sales growth of 17.4pc over the period, grew its market shares to 10.3pc – the first rise since 2015.

Independent shops were the biggest gainers, with sales rising 59.5pc. Ocado also jumped 45.5pc as overall online grocery sales rose 92pc.

Kantar’s Fraser McKevitt warned there are still signs of nerves among shoppers, saying:

[We] are clearly a long way off a complete return to normality.  Footfall was still 15pc lower during the past four weeks and the average spend on a supermarket trip was £25.05, 35pc more than the same period last year, as most people continue to eat more meals and snacks at home. 

Despite pubs, bars and restaurants re-opening recently, more than half of consumers say they are still uncomfortable with visiting a pub and 42% wit
h visiting a café or restaurant.

07:15 AM

Markets rise

The gains aren’t massive straight out of the gate, but European shares have risen in the wake of EU leaders striking a deal. 

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06:59 AM

Below estimates

Despite currently soaring levels of borrowing, the cumulative rate is still below the estimates laid out by the Office for Budget Responsibility, Britain’s fiscal watchdog.

The OBR’s estimate suggests borrowing for the current financial year could reach £322bn, compared to the current £128bn.

Meanwhile – as might be expected given the scale of  spending t combat Covid-19 – 2019’s figures are being dwarfed:

06:46 AM

Three-month borrowing rises to £128bn

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The Government borrowed £127.9bn in the first three months of this financial year as surging spending combined with slumping tax revenues to force an extraordinary budget deficit on the Treasury.

My colleague Tim Wallace reports:

This is the biggest quarterly deficit since records began in 1993, the Office for National Statistics said, and is double the entire level of borrowing for the entire previous financial year.

In June alone the Treasury borrowed £35.5bn, making it the third-biggest month of borrowing on record.

The two bigger months were April, at £46.9bn, and May, at £45.5bn.

It means borrowing in recent months far outweighs even the worst days of the financial crisis, when the Government borrowed £21.3bn in December 2009.

06:14 AM

Agenda: Stocks set to rise on EU rescue deal 

Good morning. European stocks are set to jump after EU leaders agreed a landmark €750bn coronavirus rescue fund for the region. 

The stimulus deal took more than four days to agree and will be divided into grants worth €390bn and low-interest loans worth €360bn.

5 things to start your day 

1) Hermes to recruit thousands as Marks & Spencer slashes 950 jobs: M&S bosses are poised to axe 950 roles in a battle save money, with spooked customers shunning bricks and mortar stores in favour of goods bought over the internet.

2) UK economic rebound will lag US and eurozone: Britain is facing a deeper recession and slower recovery than the eurozone or US, because of the economy’s greater reliance on social contact. The UK will only get back to its pre-pandemic GDP in 2022. 

3) Second wave could spell disaster for oil prices: Despite rebounding from the sub-$20 a barrel depths hit earlier this year, experts say the global crude market remains extremely fragile

4) Covid-19 could trigger a lasting surge in unemployment as a “halcyon period” for job creation comes to an abrupt end, the Bank of England’s chief economist has warned. The long-term jobless rate may have risen as the virus leaves workers in hard-hit industries with the wrong skills to find a new role, Andy Haldane said.

5) RBS tells 50,000 workers not to return to the office until 2021: The NatWest owner has told the vast majority of its employees that they will continue to do their jobs remotely until at least the end of December. It had initially hoped to start bringing workers back four months earlier.

What happened overnight 

Asian shares were mostly higher on Tuesday on rising hopes for an effective vaccine to fight the coronavirus pandemic.

Scientists at Oxford University reported that their experimental coronavirus vaccine prompted a protective immune response in hundreds of people who got the shot in an early trial.

Other projects are underway include a vaccine under development by colleagues of Dr Anthony Fauci, America’s top infectious diseases expert at the National Institutes of Health, and Moderna Inc., will start its final testing around July 27. 

Japan’s benchmark Nikkei 225 gained 0.6pc in morning trading to 22,856.71. South Korea’s Kospi jumped 1.3pc to 2,227.56. Australia’s S&P/ASX 200 added 1.5pc to 6,088.90. Hong Kong’s Hang Seng rose 1.5pc to 25,444.61, while the Shanghai Composite edged 0.1pc higher, to 3,316.56.

Shares also rose in Taiwan and most of Southeast Asia.

Coming up today

Trading statement: BHP, Euromoney Institutional Investor, IntegraFin, Intermediate Capital, TalkTalk

Economics: Public sector net borrowing (UK), inflation (Japan)