FTSE 100 Live: Stocks climb while IMF calls on UK not to cut taxes

7:00am: Stocks called higher ahead of US tech earnings

The FTSE 100 is expected to open higher after strong gains in US markets and as figures show shop price inlation cooled further in January.

Spread betting companies are calling London's lead index up by around 30 points after closing down 2.35 points at 7,632.74 on Monday.

Figures from the British retail Consortium showed shop price inflation in the UK fell in January to its lowest rate since May 2022 as retailers offered heavy discounts to entice customers.

The release will be welcomed by the Bank of England's ahead of its decision on interest rates on Thursday.

In the US, markets made strong gains ahead of a deluge of earnings and key economic updates while the Federal Reserve makes its interest rate call on Wednesday.

The Dow Jones Industrial Average up 0.6%, the S&P 500 up 0.8% and the Nasdaq Composite up 1.1%.

Markets were boosted by news the US Treasury has reduced its estimate for federal borrowing for the current quarter. 

The Treasury Department said that it now estimates $760 billion in net borrowing for January-through-March, down from a previous prediction of $816 billion released in late October.

On Tuesday, New York's corporate calendar sees full-year results from Advanced Micro Devices, Alphabet, Electronic Arts, General Motors, Microsoft, Pfizer and Starbucks.

Back in London, and Diageo will provide the early headlines along with updates from Pets at Home and Synthomer.

">7:31am: Diageo sales and profit hit by weak Latin America & Caribbean showing

Diageo has reported its half-year numbers, posting a drop in half-year revenue and operating profit reflecting a 23% decline in Latin America & Caribbean (LAC) sales.

The owner Guinness, Johnnie Walker and Smirnoff said sales in the half-year ended December fell 1.4% to $11.0 billion, with organic sales down 0.6%, driven by a 23% decline in LAC.

Reported operating profit in the half-year declined 11.1% to $3.3 billion, and reported operating profit margin contracted 329 bps due to lower organic operating margin and a negative impact from exceptional operating items.

Chief Executive Debra Crew said: “The first half of fiscal 24 was challenging for Diageo and our sector, particularly as we lapped strong growth in the prior year and faced an uneven global consumer environment.” 

She said the “materially weaker” performance in LAC, was driven by fast-changing consumer sentiment and high inventory levels.

“We have taken action and have further plans to reduce inventory to more appropriate levels for the current consumer environment in the region by the end of fiscal 24,” she added.

However, the firm expects macroeconomic pressures will persist in LAC and impact progress in reducing inventory levels. 

As a result, organic net sales in LAC are forecast to decline between the range of 10% to 20% in the second half of the financial year,  compared to the second half of financial 2023.

The organic net sales growth rate for the group in the second half is expected to gradually improve compared to the growth rate in the first half.

Diageo expects a gradual improvement in North America in the second half despite uncertainty in the consumer environment. 

The interim dividend was boosted by 5% to 40.50 cents per share.

Back in London, and Diageo will provide the early headlines along with updates from Pets at Home and Synthomer (LSE:SYNT).

">7:54am: Pets at Home warns, WPP trading in line

Elsewhere, Pets At Home Group PLC has warned its revenue growth in the third quarter “fell below its own expectations” as discretionary sales dropped.

As a result, it lowered full-year profit guidance to around £132 million, lower than the £136 million suggested three months ago.

The company saw volume growth and share gains across food, against a slowing market backdrop, but said discretionary accessories trends remained soft.

WPP PLC has updated investors on trading ahead of today’s Capital Markets Day.

The advertising group expects to report full-year results in line with guidance with 2023 like-for-like revenue less pass-through costs expected to be 0.9%, at the top-end of the 0.5-1.0% range.

Headline operating profit margin is expected to be 14.8%, equivalent to 15.0% on a constant currency basis, which is at the top end of guidance of 14.8-15.0%.

Looking ahead, it predicts 2024 LFL revenue less pass-through costs growth of 0-1% and 2024 headline operating profit margin improvement of 20-40bps (excluding the impact of FX).

">7:58am: Shop price inflation hits lowest level since May 2022

More on the shop price inflation figures in the UK which fell in January to its lowest rate since May 2022 as retailers offered heavy discounts to entice customers.

According to the British Retail Consortium-NielsenIQ Shop Price Index, January's shop prices eased to 2.9% higher than a year ago, down from 4.3% in December and below the three-month average of 3.9%.

Inflation on non-food products fell to 1.3% in January, down from 3.1% in December – the lowest rate since February 2022.

Food inflation also slowed, to 6.1% in January from December's 6.7%, the ninth consecutive fall and the lowest rate since June 2022.

The BRC said the easing is "good news for the morning brew" as the price of tea and milk fell, while alcohol remained more expensive on the back of increased duties.

BRC chief executive Helen Dickinson said: "Some new year cheer as January shop price inflation slid to its lowest level since May 2022.”

She noted non-food goods drove the fall”, as many retailers offered heavily discounted goods in their January sales to entice consumer spend amidst weak demand.”

But Mike Watkins, head of retailer & business insight at NielsenIQ, cautioned “consumer demand remains fragile as most households are yet to feel better off after nearly two years of inflation."

Elsewhere, Pets at Home Group PLC (LSE:PETS) has warned its revenue growth in the third quarter “fell below its own expectations” as discretionary sales dropped.

WPP PLC (LSE:WPP) has updated investors on trading ahead of today’s Capital Markets Day.

">8:15am: Stocks boosted by cooling shop price inflation, US gains

The FTSE 100 opened higher on Tuesday as cooling food, and shop price, inflation figures supported hopes of an early cut in interest rates by the Bank of England.

At 8:15am, London's blue-chip index was up 0.15% at 7,644.22 while the FTSE 250 was up 0.5% at 19,322.18.

Figures showed that shop price inflation in the UK fell in January to its lowest rate since May 2022 as retailers offered heavy discounts to entice customers.

According to the British Retail Consortium-NielsenIQ Shop Price Index, January's shop prices eased to 2.9% higher than a year ago, down from 4.3% in December and below the three-month average of 3.9%.

Meanwhile, data from market research firm Kantar showed grocery price inflation fell slightly to 6.8% in January, down from 6.9% in December 2023.

The figures come ahead of Thursday’s interest rate decision by the Bank of England.

While rates are expected to remain unchanged, attention will be paid to any hints regarding the timing of any easing to monetary policy.

In company news, Diageo fell 3.4% after reporting a fall in half-year sales and profits.

Aarin Chiekrie, equity analyst, Hargreaves Lansdown said Diageo “served up an expectedly underwhelming set of first-half results, leaving a bad taste in investors' mouths.”

He explained sales were held back by its stumbling Latin America and Caribbean region, where sales dropped by a staggering 23%.

Elsewhere, Pets at Home are down 6.2% after it cut profit guidance, but Saga has jumped 7.3% after predicting annual profit would more than double.

In line trading guidance from WPP was enough to push shares up 5.2%.

">8:15am: Stocks boosted by cooling shop price inflation, US gains

The FTSE 100 opened higher on Tuesday as cooling food, and shop price, inflation figures supported hopes of an early cut in interest rates by the Bank of England.

At 8:15am, London's blue-chip index was up 0.15% at 7,644.22 while the FTSE 250 was up 0.5% at 19,322.18.

Figures showed that shop price inflation in the UK fell in January to its lowest rate since May 2022 as retailers offered heavy discounts to entice customers.

According to the British Retail Consortium-NielsenIQ Shop Price Index, January's shop prices eased to 2.9% higher than a year ago, down from 4.3% in December and below the three-month average of 3.9%.

Meanwhile, data from market research firm Kantar showed grocery price inflation fell slightly to 6.8% in January, down from 6.9% in December 2023.

The figures come ahead of Thursday’s interest rate decision by the Bank of England.

While rates are expected to remain unchanged, attention will be paid to any hints regarding the timing of any easing to monetary policy.

In company news, Diageo fell 3.4% after reporting a fall in half-year sales and profits.

Aarin Chiekrie, equity analyst, Hargreaves Lansdown said Diageo “served up an expectedly underwhelming set of first-half results, leaving a bad taste in investors' mouths.”

He explained sales were held back by its stumbling Latin America and Caribbean region, where sales dropped by a staggering 23%.

Elsewhere, Pets at Home are down 6.2% after it cut profit guidance, but Saga has jumped 7.3% after predicting annual profit would more than double.

In line trading guidance from WPP was enough to push shares up 5.2%.

7:58am: Shop price inflation hits lowest level since May 2022

More on the shop price inflation figures in the UK which fell in January to its lowest rate since May 2022 as retailers offered heavy discounts to entice customers.

According to the British Retail Consortium-NielsenIQ Shop Price Index, January's shop prices eased to 2.9% higher than a year ago, down from 4.3% in December and below the three-month average of 3.9%.

Inflation on non-food products fell to 1.3% in January, down from 3.1% in December – the lowest rate since February 2022.

Food inflation also slowed, to 6.1% in January from December's 6.7%, the ninth consecutive fall and the lowest rate since June 2022.

The BRC said the easing is "good news for the morning brew" as the price of tea and milk fell, while alcohol remained more expensive on the back of increased duties.

BRC chief executive Helen Dickinson said: "Some new year cheer as January shop price inflation slid to its lowest level since May 2022.”

She noted non-food goods drove the fall”, as many retailers offered heavily discounted goods in their January sales to entice consumer spend amidst weak demand.”

But Mike Watkins, head of retailer & business insight at NielsenIQ, cautioned “consumer demand remains fragile as most households are yet to feel better off after nearly two years of inflation."

7:54am: Pets at Home warns, WPP trading in line

Elsewhere, Pets at Home Group PLC (LSE:PETS) has warned its revenue growth in the third quarter “fell below its own expectations” as discretionary sales dropped.

As a result, it lowered full-year profit guidance to around £132 million, lower than the £136 million suggested three months ago.

The company saw volume growth and share gains across food, against a slowing market backdrop, but said discretionary accessories trends remained soft.

WPP PLC (LSE:WPP) has updated investors on trading ahead of today’s Capital Markets Day.

The advertising group expects to report full-year results in line with guidance with 2023 like-for-like revenue less pass-through costs expected to be 0.9%, at the top-end of the 0.5-1.0% range.

Headline operating profit margin is expected to be 14.8%, equivalent to 15.0% on a constant currency basis, which is at the top end of guidance of 14.8-15.0%.

Looking ahead, it predicts 2024 LFL revenue less pass-through costs growth of 0-1% and 2024 headline operating profit margin improvement of 20-40bps (excluding the impact of FX).

7:31am: Diageo sales and profit hit by weak Latin America & Caribbean showing

Diageo has reported its half-year numbers, posting a drop in half-year revenue and operating profit reflecting a 23% decline in Latin America & Caribbean (LAC) sales.

The owner Guinness, Johnnie Walker and Smirnoff said sales in the half-year ended December fell 1.4% to $11.0 billion, with organic sales down 0.6%, driven by a 23% decline in LAC.

Reported operating profit in the half-year declined 11.1% to $3.3 billion, and reported operating profit margin contracted 329 bps due to lower organic operating margin and a negative impact from exceptional operating items.

Chief Executive Debra Crew said: “The first half of fiscal 24 was challenging for Diageo and our sector, particularly as we lapped strong growth in the prior year and faced an uneven global consumer environment.” 

She said the “materially weaker” performance in LAC, was driven by fast-changing consumer sentiment and high inventory levels.

“We have taken action and have further plans to reduce inventory to more appropriate levels for the current consumer environment in the region by the end of fiscal 24,” she added.

However, the firm expects macroeconomic pressures will persist in LAC and impact progress in reducing inventory levels. 

As a result, organic net sales in LAC are forecast to decline between the range of 10% to 20% in the second half of the financial year,  compared to the second half of financial 2023.

The organic net sales growth rate for the group in the second half is expected to gradually improve compared to the growth rate in the first half.

Diageo expects a gradual improvement in North America in the second half despite uncertainty in the consumer environment. 

The interim dividend was boosted by 5% to 40.50 cents per share.

7:00am: Stocks called higher ahead of US tech earnings

The FTSE 100 is expected to open higher after strong gains in US markets and as figures show shop price inlation cooled further in January.

Spread betting companies are calling London's lead index up by around 30 points after closing down 2.35 points at 7,632.74 on Monday.

Figures from the British retail Consortium showed shop price inflation in the UK fell in January to its lowest rate since May 2022 as retailers offered heavy discounts to entice customers.

The release will be welcomed by the Bank of England's ahead of its decision on interest rates on Thursday.

In the US, markets made strong gains ahead of a deluge of earnings and key economic updates while the Federal Reserve makes its interest rate call on Wednesday.

The Dow Jones Industrial Average up 0.6%, the S&P 500 up 0.8% and the Nasdaq Composite up 1.1%.

Markets were boosted by news the US Treasury has reduced its estimate for federal borrowing for the current quarter. 

The Treasury Department said that it now estimates $760 billion in net borrowing for January-through-March, down from a previous prediction of $816 billion released in late October.

On Tuesday, New York's corporate calendar sees full-year results from Advanced Micro Devices, Alphabet, Electronic Arts, General Motors, Microsoft, Pfizer and Starbucks.

Back in London, and Diageo will provide the early headlines along with updates from Pets at Home and Synthomer (LSE:SYNT).

">8:30am: Food price inflation eases slightly in January

Food price inflation fell slightly to 6.8% in January, down from 6.9% in December 2023, according to Kantar.  

This softer decline compares with a 2.2 percentage point decrease seen between November and December.  

Meanwhile, take-home grocery sales grew in value by 2.9% over the four weeks.  

Fraser McKevitt, head of retail and consumer insight at Kantar, said: “There’s been a lot of speculation about the impact the Red Sea shipping crisis might have on the cost of goods, but the story in the grocery aisles this January is more about the battle between the supermarkets to offer best value, rather than geopolitics. “

“Retailers have taken their foot off the promotions gas slightly as we’ve come into the new year, and that’s meant inflation hasn’t fallen as quickly,” he suggested.

Both Sainsbury’s and Tesco gained market share over the latest 12 weeks to January 21 compared with a year ago.  

Sainsbury’s increased sales by 8.1% to take 15.7% of the market, 0.3 percentage points higher than last year, while the UK’s largest retailer Tesco grew by 6.3% and now has a share of 27.6%, up from 27.5%.

Lidl was the fastest growing grocer in Britain for the fifth month in row and the only retailer to see double-digit growth in the latest 12 weeks.  

Spending at the discounter was up by 11.9%, bringing its share of the market to 7.5%. 

Aldi also grew ahead of the market, with sales up by 7.2%, and increased its share by 0.1 percentage points to 9.3%.

Sales at Morrisons rose by 2.8%, with the Bradford-based grocer now holding an 8.8% share.  

Asda’s share is at 13.7%, with sales rising by 2.1% compared to a year ago.

Waitrose increased sales by 3.5% and holds 4.6% of the market, while Co-op accounts for 5.3%, growing sales by 1.8%.  

Iceland saw growth of 2.3%, giving the frozen food specialist a 2.4% share.

Online sales rose by 6.3% in the latest 12 weeks, slightly ahead of Ocado’s growth where spending was 4.0% higher than last year.  

The online-only retailer has a 1.7% share of the total market.

">8:41am: HSBC slapped with £57m fine by Bank of England

The Bank of England has fined HSBC Holdings PLC £57.4 million for failing to protect some customer depositors for several years.

The BoE’s Prudential Regulation Authority said in a statement the bank failed to accurately identify deposits that were eligible for Britain’s Financial Services Compensation Scheme - which protects customer cash up to 85,000 pounds.

The failings occurred for HSBC Bank between 2015 and 2022, and for HSBC UK Bank between 2018 and 2021, said the PRA.

This is the second highest fine imposed by the PRA, which it says “reflects the seriousness of the failings.”

Lidl was the fastest growing grocer in Britain for the fifth month in row and the only retailer to see double-digit growth in the latest 12 weeks.  

Aldi also grew ahead of the market, with sales up by 7.2%, and increased its share by 0.1 percentage points to 9.3%.

">8:51am: WPP rises on cost savings, in-line trading

WPP PLC leads the FTSE 100 risers, up 6.1%, after its update ahead of today’s Capital Markets Day.

It plans to use AI to drive improved returns to clients.

The advertiser expects structural savings to deliver annualised net cost savings of c.£125 million in 2025, with 40-50% of that saving expected to be achieved in 2024.

It has set a target of c.£175 million gross savings from efficiency opportunities across both back office and commercial delivery.

WPP has a medium-term target for like-for-like growth of 3% in revenue less pass-through costs with 16-17% headline operating profit margin.

As I said earlier, WPP expects to report full-year results in line with guidance with 2023 like-for-like revenue less pass-through costs expected to be 0.9%, at the top-end of the 0.5-1.0% range.

Headline operating profit margin is expected to be 14.8%, equivalent to 15.0% on a constant currency basis, which is at the top end of guidance of 14.8-15.0%.

The Bank of England has fined HSBC Holdings PLC (LSE:HSBA) £57.4 million for failing to protect some customer depositors for several years.

">9:02am: Deliveroo drops as Delivery Hero sells stake

Shares in Deliveroo are 5.2% lower after Delivery Hero said it is selling its stake in its fellow online food delivery group.

The Berlin-based group on Monday said it intended to sell up to 68.2 million class A ordinary shares in Deliveroo and does not expect to hold any stock in the company after the settlement.

Delivery Hero sold the shares at 113p a share, compared to the 121.9p that Deliveroo closed at on Monday. 

The holding represents around 4.5% of Deliveroo's shareholding.

WPP PLC (LSE:WPP) leads the FTSE 100 risers, up 6.1%, after its update ahead of today’s Capital Markets Day.

">9:36am: Diageo spirits sink after "staggering" LAC drop

Back to Diageo which is down 3.7% after today’s half-results which saw sales and profit decline.

Richard Hunter, head of markets at interactive investor, commented while “all is certainly not lost at Diageo,” the performance in Latin America and the Caribbean “has left a bitter taste in the mouth, from which it may take some time to recover.”

Analysts at Jefferies forecast mid-single digit cuts to financial 2025 earnings forecasts. 

Away from the LAC miss, it highlighted beats in North America and Africa but misses in Europe and Asia.

“We have been arguing here that whilst the downgrade cycle (-20% to date) is quite far progressed, recovery from here will be more u-shaped,” it added. 

Aarin Chiekrie, equity analyst, Hargreaves Lansdown described the 23% sales fall in its “stumbling” Latin America and Caribbean region, as “staggering.”

He explained that the Latin America and Caribbean market is one of Diageo’s higher-margin territories, so the sales decline is having an exaggerated impact on group profits.

But while the profit outlook remains murky for the second half, the medium-term looks slightly brighter.

“But improvements in the Latin American and Caribbean market will be key to future margin expansion, and to a large extent, that’s outside of Diageo’s control,” he added.

John Moore, senior investment manager at RBC Brewin Dolphin, notes the poor performance in Latin America comes as no surprise given the warning late in 2023. 

He hopes this turn out to be a “blip rather than an enduring problem.”

He thinks while it has “been a difficult 12 months for Diageo,” there are reasons “to be positive over the medium term, as the business continues to invest and the trading environment improves.” 

Longer term, he believes the group remains “very strong” and “well positioned” to benefit from trends in the drinks and spirits industry, with ample room for growth in a highly fragmented market.

9:02am: Deliveroo drops as Delivery Hero (ETR:DHER, OTCQX:DLVHF) sells stake

">9:55am: Mortgage approvals pick-up as rates fall for first time since late-2021

There has been a small pick-up in mortgage deals being approved in a further tentative sign that the housing market is picking up.

The Bank of England reported that 50,500 loans for house purchases were agreed in December, up from 49,300 in November.

 This was the highest figure since June but below the 52,500 Reuters-cited consensus.

The ‘effective’ interest rate - the actual interest paid - on newly drawn mortgages fell by 6 basis points to 5.28% in December, the first drop since November 2021.

Net approvals for remortgaging increased from 25,700 in November to 30,800 in December.

Shares in Deliveroo are 5.2% lower after Delivery Hero (ETR:DHER, OTCQX:DLVHF) said it is selling its stake in its fellow online food delivery group.

">10:24am: Eurozone escapes recession despite stagnant growth

The eurozone has avoided falling into recession, despite Germany’s economy contracting and France stagnating in the last quarter.

GDP across the eurozone, and the wider European Union, was flat in the fourth quarter of 2023, data from Eurostat shows.

That follows the 0.1% contraction in the third quarter, and means Europe has narrowly avoided a technical recession (two negative quarters in a row).

The figures were boosted by firmer growth in Italy and Spain.

Delivery Hero (ETR:DHER, OTCQX:DLVHF) sold the shares at 113p a share, compared to the 121.9p that Deliveroo closed at on Monday. 

">10:42am: 3i rises as Barclays increases price target

Shares in 3i Group PLC are up 2.1% - topping the FTSE 100 risers - after Barclays raised its price target by 14% to 2,810p.

The bank reiterated its ‘overweight’ rating ahead of a trading statement on Thursday.

It said Action's Christmas trading and the first insight into Action's 2023 result will be the key focus.

It forecasts a third quarter NAV of 2005p, which reflects strong Christmas trading, but sees a scenario where this could be 50p higher. 

Barclays pointed out that twelve months ago, Action reported its first COVID-free Christmas trading period since 2019. 

That result surprised “very positively,” and changing investor perceptions around the potential growth of Action, and in turn around 3i's NAV.

Its 3i forecast is based on Action reporting 2023 sales and EBITDA growth of 29% and 35%.

But it said a continuation of the strong October annual growth and margin dynamics could see Action EBITDA over €50 million higher with an associated uplift to 3i NAV.

">3i Group PLC (LSE:III) are up 2.1% - topping the FTSE 100 risers - after Barclays raised its price target by 14% to 2,810p.">11:05am: Italy accuses Microsoft's OpenAI of breaching data protection rules

Italian authorities have accused Microsoft Corp-backed OpenAI, the creator of ChatGPT, of breaching EU data protection law, giving the US firm 30 days to respond. 

Italy's data protection watchdog has "notified breaches of data protection law to OpenAI, the company behind ChatGPT's artificial intelligence platform", it said in a statement Monday, reported by AFP. 

The watchdog blocked the popular chatbot last year for a few weeks, becoming the first Western country to take such action.

After that temporary ban, the watchdog concluded that the "available evidence pointed to the existence of breaches of the provisions contained in the EU GDPR", the EU's general data protection regulation, it said.

">11:46am: Ashtead lifted as JPMorgan increases price target 21%

Another stock boosted by positive words from the City is Ashtead, up 1.2%.

JPMorgan reiterated an ‘overweight’ rating and increased its June 2025 price target to 6,800p from 5,600p.

The bank noted Ashtead is currently a key debate stock in the sector, with the age old “cyclical or structural” debate reignited and likely to be tested over the coming 12 months. 

The profit warning in November has not helped calm but JPM said its analysis shows that a combination of structural changes and management actions has driven an evolution in the business model and created a more sustainable equity investment.

The bank highlighted sector-plus growth rates, robust cash generation and strong balance sheet optionality meaning the business is no longer simply just a play on the cycle.

This is something “we believe the market does not appreciate currently.”

11:05am: Italy accuses Microsoft's OpenAI of breaching data protection rules

">12:08pm: US stocks seen lower but GM motors after beating guidance

Stocks in New York look set to open lower but General Motors’ share price is shifting through the gears after beating guidance.

In pre-market trading, futures for the Dow Jones Industrial Average were down 0.2%, while those for the S&P 500 fell 0.1% and contracts for the Nasdaq 100 declined 0.1%.

“Today represents the biggest day of fourth quarter earnings thus far, with Microsoft hoping to maintain its new crown as a $3 trillion business,” noted Joshua Mahony at Scope Markets.

As well as Microsoft, earnings are due from Advanced Micro Devices, Alphabet, Electronic Arts, Pfizer and Starbucks.

Also reporting results, General Motors has jumped 7.3% in pre-market trading after full-year results beat guidance.

The Detroit-Michigan automaker reported 2023 net income of $10.1 billion ahead of previous guidance in November of $9.1-$9.7 billion.

GM is looking for 2024 net income of $9.8-$11.2 billion.

Pfizer is up 2.1% after its results despite posting a large drop in full-year sales.

Chief Financial Officer David Denton said the firm had achieved its full-year 2023 non-COVID operational revenue growth target of 6% to 8%. 

“In addition, we are on track to deliver at least $4.0 billion in annual net cost savings by the end of 2024 from our cost realignment program,” he said.

Investors will be awaiting JOLTS figures as a week of data on the labour market hits the wires, culminating in non-farm payrolls figures on Friday.

Italian authorities have accused Microsoft Corp-backed OpenAI, the creator of ChatGPT, of breaching EU data protection law, giving the US firm 30 days to respond. 

">12:14pm: UPS tumbles as revenue falls, outlook disappoints

Also in the US, results are out from United Parcel Service, and they have sent shares tumbling nearly 7% in pre-market trading.after reporting lower full-year and quarterly revenue plus a disappointing outlook for 2024.

In the fourth quarter of 2023, the Atlanta, Georgia-based courier reported an operating profit of $2.78 billion, down 27% annually from $3.82 billion while revenue fell to $24.92 billion from $27.03 billion. 

For 2023, operating profit slumped 29% to $9.87 billion from $13.85 billion.

The company expects full-year 2024 revenue to be in the range of $92.0 billion to $94.5 billion, below analysts' estimates of $95.57 billion, according to LSEG data.

Italy's data protection watchdog has "notified breaches of data protection law to OpenAI, the company behind ChatGPT's artificial intelligence platform", it said in a statement Monday, reported by AFP. 

">12:14pm: UPS tumbles as revenue falls, outlook disappoints

Also in the US, results are out from United Parcel Service, and they have sent shares tumbling nearly 7% in pre-market trading.after reporting lower full-year and quarterly revenue plus a disappointing outlook for 2024.

In the fourth quarter of 2023, the Atlanta, Georgia-based courier reported an operating profit of $2.78 billion, down 27% annually from $3.82 billion while revenue fell to $24.92 billion from $27.03 billion. 

For 2023, operating profit slumped 29% to $9.87 billion from $13.85 billion.

The company expects full-year 2024 revenue to be in the range of $92.0 billion to $94.5 billion, below analysts' estimates of $95.57 billion, according to LSEG data.

12:08pm: US stocks seen lower but GM motors after beating guidance

Stocks in New York look set to open lower but General Motors’ share price is shifting through the gears after beating guidance.

In pre-market trading, futures for the Dow Jones Industrial Average were down 0.2%, while those for the S&P 500 fell 0.1% and contracts for the Nasdaq 100 declined 0.1%.

“Today represents the biggest day of fourth quarter earnings thus far, with Microsoft hoping to maintain its new crown as a $3 trillion business,” noted Joshua Mahony at Scope Markets.

As well as Microsoft, earnings are due from Advanced Micro Devices, Alphabet, Electronic Arts, Pfizer and Starbucks.

Also reporting results, General Motors has jumped 7.3% in pre-market trading after full-year results beat guidance.

The Detroit-Michigan automaker reported 2023 net income of $10.1 billion ahead of previous guidance in November of $9.1-$9.7 billion.

GM is looking for 2024 net income of $9.8-$11.2 billion.

Pfizer is up 2.1% after its results despite posting a large drop in full-year sales.

Chief Financial Officer David Denton said the firm had achieved its full-year 2023 non-COVID operational revenue growth target of 6% to 8%. 

“In addition, we are on track to deliver at least $4.0 billion in annual net cost savings by the end of 2024 from our cost realignment program,” he said.

Investors will be awaiting JOLTS figures as a week of data on the labour market hits the wires, culminating in non-farm payrolls figures on Friday.

11:46am: Ashtead lifted as JPMorgan increases price target 21%

Another stock boosted by positive words from the City is Ashtead, up 1.2%.

JPMorgan reiterated an ‘overweight’ rating and increased its June 2025 price target to 6,800p from 5,600p.

The bank noted Ashtead is currently a key debate stock in the sector, with the age old “cyclical or structural” debate reignited and likely to be tested over the coming 12 months. 

The profit warning in November has not helped calm but JPM said its analysis shows that a combination of structural changes and management actions has driven an evolution in the business model and created a more sustainable equity investment.

The bank highlighted sector-plus growth rates, robust cash generation and strong balance sheet optionality meaning the business is no longer simply just a play on the cycle.

This is something “we believe the market does not appreciate currently.”

11:05am: Italy accuses Microsoft's OpenAI of breaching data protection rules

Italian authorities have accused Microsoft Corp-backed OpenAI, the creator of ChatGPT, of breaching EU data protection law, giving the US firm 30 days to respond. 

Italy's data protection watchdog has "notified breaches of data protection law to OpenAI, the company behind ChatGPT's artificial intelligence platform", it said in a statement Monday, reported by AFP. 

The watchdog blocked the popular chatbot last year for a few weeks, becoming the first Western country to take such action.

After that temporary ban, the watchdog concluded that the "available evidence pointed to the existence of breaches of the provisions contained in the EU GDPR", the EU's general data protection regulation, it said.

10:42am: 3i rises as Barclays increases price target

Shares in 3i Group PLC (LSE:III) are up 2.1% - topping the FTSE 100 risers - after Barclays raised its price target by 14% to 2,810p.

The bank reiterated its ‘overweight’ rating ahead of a trading statement on Thursday.

It said Action's Christmas trading and the first insight into Action's 2023 result will be the key focus.

It forecasts a third quarter NAV of 2005p, which reflects strong Christmas trading, but sees a scenario where this could be 50p higher. 

Barclays pointed out that twelve months ago, Action reported its first COVID-free Christmas trading period since 2019. 

That result surprised “very positively,” and changing investor perceptions around the potential growth of Action, and in turn around 3i's NAV.

Its 3i forecast is based on Action reporting 2023 sales and EBITDA growth of 29% and 35%.

But it said a continuation of the strong October annual growth and margin dynamics could see Action EBITDA over €50 million higher with an associated uplift to 3i NAV.

10:24am: Eurozone escapes recession despite stagnant growth

The eurozone has avoided falling into recession, despite Germany’s economy contracting and France stagnating in the last quarter.

GDP across the eurozone, and the wider European Union, was flat in the fourth quarter of 2023, data from Eurostat shows.

That follows the 0.1% contraction in the third quarter, and means Europe has narrowly avoided a technical recession (two negative quarters in a row).

The figures were boosted by firmer growth in Italy and Spain.

9:55am: Mortgage approvals pick-up as rates fall for first time since late-2021

There has been a small pick-up in mortgage deals being approved in a further tentative sign that the housing market is picking up.

The Bank of England reported that 50,500 loans for house purchases were agreed in December, up from 49,300 in November.

 This was the highest figure since June but below the 52,500 Reuters-cited consensus.

The ‘effective’ interest rate - the actual interest paid - on newly drawn mortgages fell by 6 basis points to 5.28% in December, the first drop since November 2021.

Net approvals for remortgaging increased from 25,700 in November to 30,800 in December.

9:36am: Diageo spirits sink after "staggering" LAC drop

Back to Diageo which is down 3.7% after today’s half-results which saw sales and profit decline.

Richard Hunter, head of markets at interactive investor, commented while “all is certainly not lost at Diageo,” the performance in Latin America and the Caribbean “has left a bitter taste in the mouth, from which it may take some time to recover.”

Analysts at Jefferies forecast mid-single digit cuts to financial 2025 earnings forecasts. 

Away from the LAC miss, it highlighted beats in North America and Africa but misses in Europe and Asia.

“We have been arguing here that whilst the downgrade cycle (-20% to date) is quite far progressed, recovery from here will be more u-shaped,” it added. 

Aarin Chiekrie, equity analyst, Hargreaves Lansdown described the 23% sales fall in its “stumbling” Latin America and Caribbean region, as “staggering.”

He explained that the Latin America and Caribbean market is one of Diageo’s higher-margin territories, so the sales decline is having an exaggerated impact on group profits.

But while the profit outlook remains murky for the second half, the medium-term looks slightly brighter.

“But improvements in the Latin American and Caribbean market will be key to future margin expansion, and to a large extent, that’s outside of Diageo’s control,” he added.

John Moore, senior investment manager at RBC Brewin Dolphin, notes the poor performance in Latin America comes as no surprise given the warning late in 2023. 

He hopes this turn out to be a “blip rather than an enduring problem.”

He thinks while it has “been a difficult 12 months for Diageo,” there are reasons “to be positive over the medium term, as the business continues to invest and the trading environment improves.” 

Longer term, he believes the group remains “very strong” and “well positioned” to benefit from trends in the drinks and spirits industry, with ample room for growth in a highly fragmented market.

9:02am: Deliveroo drops as Delivery Hero (ETR:DHER, OTCQX:DLVHF) sells stake

Shares in Deliveroo are 5.2% lower after Delivery Hero (ETR:DHER, OTCQX:DLVHF) said it is selling its stake in its fellow online food delivery group.

The Berlin-based group on Monday said it intended to sell up to 68.2 million class A ordinary shares in Deliveroo and does not expect to hold any stock in the company after the settlement.

Delivery Hero (ETR:DHER, OTCQX:DLVHF) sold the shares at 113p a share, compared to the 121.9p that Deliveroo closed at on Monday. 

The holding represents around 4.5% of Deliveroo's shareholding.

8:51am: WPP rises on cost savings, in-line trading

WPP PLC (LSE:WPP) leads the FTSE 100 risers, up 6.1%, after its update ahead of today’s Capital Markets Day.

It plans to use AI to drive improved returns to clients.

The advertiser expects structural savings to deliver annualised net cost savings of c.£125 million in 2025, with 40-50% of that saving expected to be achieved in 2024.

It has set a target of c.£175 million gross savings from efficiency opportunities across both back office and commercial delivery.

WPP has a medium-term target for like-for-like growth of 3% in revenue less pass-through costs with 16-17% headline operating profit margin.

As I said earlier, WPP expects to report full-year results in line with guidance with 2023 like-for-like revenue less pass-through costs expected to be 0.9%, at the top-end of the 0.5-1.0% range.

Headline operating profit margin is expected to be 14.8%, equivalent to 15.0% on a constant currency basis, which is at the top end of guidance of 14.8-15.0%.

8:41am: HSBC slapped with £57m fine by Bank of England

The Bank of England has fined HSBC Holdings PLC (LSE:HSBA) £57.4 million for failing to protect some customer depositors for several years.

The BoE’s Prudential Regulation Authority said in a statement the bank failed to accurately identify deposits that were eligible for Britain’s Financial Services Compensation Scheme - which protects customer cash up to 85,000 pounds.

The failings occurred for HSBC Bank between 2015 and 2022, and for HSBC UK Bank between 2018 and 2021, said the PRA.

This is the second highest fine imposed by the PRA, which it says “reflects the seriousness of the failings.”

8:30am: Food price inflation eases slightly in January

Food price inflation fell slightly to 6.8% in January, down from 6.9% in December 2023, according to Kantar.  

This softer decline compares with a 2.2 percentage point decrease seen between November and December.  

Meanwhile, take-home grocery sales grew in value by 2.9% over the four weeks.  

Fraser McKevitt, head of retail and consumer insight at Kantar, said: “There’s been a lot of speculation about the impact the Red Sea shipping crisis might have on the cost of goods, but the story in the grocery aisles this January is more about the battle between the supermarkets to offer best value, rather than geopolitics. “

“Retailers have taken their foot off the promotions gas slightly as we’ve come into the new year, and that’s meant inflation hasn’t fallen as quickly,” he suggested.

Both Sainsbury’s and Tesco gained market share over the latest 12 weeks to January 21 compared with a year ago.  

Sainsbury’s increased sales by 8.1% to take 15.7% of the market, 0.3 percentage points higher than last year, while the UK’s largest retailer Tesco grew by 6.3% and now has a share of 27.6%, up from 27.5%.

Lidl was the fastest growing grocer in Britain for the fifth month in row and the only retailer to see double-digit growth in the latest 12 weeks.  

Spending at the discounter was up by 11.9%, bringing its share of the market to 7.5%. 

Aldi also grew ahead of the market, with sales up by 7.2%, and increased its share by 0.1 percentage points to 9.3%.

Sales at Morrisons rose by 2.8%, with the Bradford-based grocer now holding an 8.8% share.  

Asda’s share is at 13.7%, with sales rising by 2.1% compared to a year ago.

Waitrose increased sales by 3.5% and holds 4.6% of the market, while Co-op accounts for 5.3%, growing sales by 1.8%.  

Iceland saw growth of 2.3%, giving the frozen food specialist a 2.4% share.

Online sales rose by 6.3% in the latest 12 weeks, slightly ahead of Ocado’s growth where spending was 4.0% higher than last year.  

The online-only retailer has a 1.7% share of the total market.

8:15am: Stocks boosted by cooling shop price inflation, US gains

The FTSE 100 opened higher on Tuesday as cooling food, and shop price, inflation figures supported hopes of an early cut in interest rates by the Bank of England.

At 8:15am, London's blue-chip index was up 0.15% at 7,644.22 while the FTSE 250 was up 0.5% at 19,322.18.

Figures showed that shop price inflation in the UK fell in January to its lowest rate since May 2022 as retailers offered heavy discounts to entice customers.

According to the British Retail Consortium-NielsenIQ Shop Price Index, January's shop prices eased to 2.9% higher than a year ago, down from 4.3% in December and below the three-month average of 3.9%.

Meanwhile, data from market research firm Kantar showed grocery price inflation fell slightly to 6.8% in January, down from 6.9% in December 2023.

The figures come ahead of Thursday’s interest rate decision by the Bank of England.

While rates are expected to remain unchanged, attention will be paid to any hints regarding the timing of any easing to monetary policy.

In company news, Diageo fell 3.4% after reporting a fall in half-year sales and profits.

Aarin Chiekrie, equity analyst, Hargreaves Lansdown said Diageo “served up an expectedly underwhelming set of first-half results, leaving a bad taste in investors' mouths.”

He explained sales were held back by its stumbling Latin America and Caribbean region, where sales dropped by a staggering 23%.

Elsewhere, Pets at Home are down 6.2% after it cut profit guidance, but Saga has jumped 7.3% after predicting annual profit would more than double.

In line trading guidance from WPP was enough to push shares up 5.2%.

7:58am: Shop price inflation hits lowest level since May 2022

More on the shop price inflation figures in the UK which fell in January to its lowest rate since May 2022 as retailers offered heavy discounts to entice customers.

According to the British Retail Consortium-NielsenIQ Shop Price Index, January's shop prices eased to 2.9% higher than a year ago, down from 4.3% in December and below the three-month average of 3.9%.

Inflation on non-food products fell to 1.3% in January, down from 3.1% in December – the lowest rate since February 2022.

Food inflation also slowed, to 6.1% in January from December's 6.7%, the ninth consecutive fall and the lowest rate since June 2022.

The BRC said the easing is "good news for the morning brew" as the price of tea and milk fell, while alcohol remained more expensive on the back of increased duties.

BRC chief executive Helen Dickinson said: "Some new year cheer as January shop price inflation slid to its lowest level since May 2022.”

She noted non-food goods drove the fall”, as many retailers offered heavily discounted goods in their January sales to entice consumer spend amidst weak demand.”

But Mike Watkins, head of retailer & business insight at NielsenIQ, cautioned “consumer demand remains fragile as most households are yet to feel better off after nearly two years of inflation."

7:54am: Pets at Home warns, WPP trading in line

Elsewhere, Pets at Home Group PLC (LSE:PETS) has warned its revenue growth in the third quarter “fell below its own expectations” as discretionary sales dropped.

As a result, it lowered full-year profit guidance to around £132 million, lower than the £136 million suggested three months ago.

The company saw volume growth and share gains across food, against a slowing market backdrop, but said discretionary accessories trends remained soft.

WPP PLC (LSE:WPP) has updated investors on trading ahead of today’s Capital Markets Day.

The advertising group expects to report full-year results in line with guidance with 2023 like-for-like revenue less pass-through costs expected to be 0.9%, at the top-end of the 0.5-1.0% range.

Headline operating profit margin is expected to be 14.8%, equivalent to 15.0% on a constant currency basis, which is at the top end of guidance of 14.8-15.0%.

Looking ahead, it predicts 2024 LFL revenue less pass-through costs growth of 0-1% and 2024 headline operating profit margin improvement of 20-40bps (excluding the impact of FX).

7:31am: Diageo sales and profit hit by weak Latin America & Caribbean showing

Diageo has reported its half-year numbers, posting a drop in half-year revenue and operating profit reflecting a 23% decline in Latin America & Caribbean (LAC) sales.

The owner Guinness, Johnnie Walker and Smirnoff said sales in the half-year ended December fell 1.4% to $11.0 billion, with organic sales down 0.6%, driven by a 23% decline in LAC.

Reported operating profit in the half-year declined 11.1% to $3.3 billion, and reported operating profit margin contracted 329 bps due to lower organic operating margin and a negative impact from exceptional operating items.

Chief Executive Debra Crew said: “The first half of fiscal 24 was challenging for Diageo and our sector, particularly as we lapped strong growth in the prior year and faced an uneven global consumer environment.” 

She said the “materially weaker” performance in LAC, was driven by fast-changing consumer sentiment and high inventory levels.

“We have taken action and have further plans to reduce inventory to more appropriate levels for the current consumer environment in the region by the end of fiscal 24,” she added.

However, the firm expects macroeconomic pressures will persist in LAC and impact progress in reducing inventory levels. 

As a result, organic net sales in LAC are forecast to decline between the range of 10% to 20% in the second half of the financial year,  compared to the second half of financial 2023.

The organic net sales growth rate for the group in the second half is expected to gradually improve compared to the growth rate in the first half.

Diageo expects a gradual improvement in North America in the second half despite uncertainty in the consumer environment. 

The interim dividend was boosted by 5% to 40.50 cents per share.

7:00am: Stocks called higher ahead of US tech earnings

The FTSE 100 is expected to open higher after strong gains in US markets and as figures show shop price inlation cooled further in January.

Spread betting companies are calling London's lead index up by around 30 points after closing down 2.35 points at 7,632.74 on Monday.

Figures from the British retail Consortium showed shop price inflation in the UK fell in January to its lowest rate since May 2022 as retailers offered heavy discounts to entice customers.

The release will be welcomed by the Bank of England's ahead of its decision on interest rates on Thursday.

In the US, markets made strong gains ahead of a deluge of earnings and key economic updates while the Federal Reserve makes its interest rate call on Wednesday.

The Dow Jones Industrial Average up 0.6%, the S&P 500 up 0.8% and the Nasdaq Composite up 1.1%.

Markets were boosted by news the US Treasury has reduced its estimate for federal borrowing for the current quarter. 

The Treasury Department said that it now estimates $760 billion in net borrowing for January-through-March, down from a previous prediction of $816 billion released in late October.

On Tuesday, New York's corporate calendar sees full-year results from Advanced Micro Devices, Alphabet, Electronic Arts, General Motors, Microsoft, Pfizer and Starbucks.

Back in London, and Diageo will provide the early headlines along with updates from Pets at Home and Synthomer (LSE:SYNT).

">12:30pm: IAG, builders hit by downgrades

British Airways owner, IAG, is down 1.3% after Morgan Stanley downgraded the stock to 'underweight' from 'equal weight.'

The bank has moved Deutsche Lufthansa the other way to 'equal weight' from 'underweight' and raised its price target to €9.80 from €6.70.

Elsewhere, Bank of America has upgraded Taylor Wimpey to 'buy' from 'neutral' but downgraded Persimmon to 'neutral' from 'buy' and cut Barratt Developments to 'underperform' from 'neutral'.

Barratt is down 1.4% and Persimmon 1.0%.

Also in the US, results are out from United Parcel Service, and they have sent shares tumbling nearly 7% in pre-market trading.after the firm reported lower full-year and quarterly revenue plus a disappointing outlook for 2024.

">12:37pm: IAG, builders hit by downgrades

British Airways owner, IAG, is down 1.3% after Morgan Stanley (NYSE:MS) downgraded the stock to 'underweight' from 'equal weight.'

">1:05pm: UK's CMA begins probe into loyalty pricing by supermarkets

The UK competition watchdog is reviewing whether supermarket loyalty pricing misleads or disadvantages shoppers.

The Competition & Markets Authority said the increase in some supermarkets making cheaper prices only available for loyalty card members has led to it examining the practice as part of its work to help tackle cost-of-living pressures in the groceries sector. 

It said it will consider whether any aspects of loyalty pricing could mislead shoppers – for example, whether the loyalty price is a genuine promotion or as good a deal as presented – and whether any groups of shoppers are disadvantaged by the promotions. 

It will also look at whether loyalty pricing is affecting consumer behaviour, and whether this has an impact on how supermarkets compete with each other. 

The CMA said it will publish an update on its work in July, and expects to complete the review by the end of the year.

">1:28pm: Here’s a recap of the top risers and fallers on the market today

Shares in Microlise Group plc, the transport software company, jumped 22% after its full-year results came in ahead of market expectations.

Revenues for the 2023 financial year are now expected to grow 13% to close to £72 million while underlying earnings are forecast to rise 14%, a trading update revealed.

Location Sciences Group plc jumped 2% as it published details of its reverse takeover (RTO) by e-commerce tracking software specialist Sorted.

The business will be called Sorted Group Holdings going forward with a new management team comprising Carmen Carey as chief executive and Mahmoud Warriah as CFO alongside Petar Cvetkovic as a non-executive director.

Flowtech Fluidpower slipped 3% as it reported lower sales in its latest financial year and cautioned the engineering sector backdrop currently is subdued.

Luceco plc, the lighting company, fell by over 7% despite reporting guidance-beating full-year results.

One area attracting negative attention is the overall repair, maintenance and improvements market, which is said to be remaining “challenging” despite consumer confidence improving.

">2:13pm: IMF calls on UK not to cut taxes

The IMF has warned UK chancellor Jeremy Hunt against cutting taxes, an untimley intervention ahead of the budget in early March.

Instead of tax giveaways, the IMF argues the UK needs to curb public borrowing, rebuild its fiscal buffers, and prioritise spending in areas such as health, education and tackling climate change.

Pierre-Olivier Gourinchas, IMF chief economist, told the Financial Times the UK’s focus should be on “the path towards a fiscal consolidation” despite expectations that Hunt will cut taxes at his spring Budget.

Gourinchas said: "We would rather wish they would not do this type of tax cuts, and that they would instead focus on both addressing the spending needs and on the path towards a fiscal consolidation.”

Shares in Microlise Group PLC (AIM:SAAS), the transport software company, jumped 22% after its full-year results came in ahead of market expectations.

Location Sciences Group PLC (LSE:LSAI, OTC:PXAMF) jumped 2% as it published details of its reverse takeover (RTO) by e-commerce tracking software specialist Sorted.

Flowtech Fluidpower (AIM:FLO) slipped 3% as it reported lower sales in its latest financial year and cautioned the engineering sector backdrop currently is subdued.

Luceco PLC (LSE:LUCE), the lighting company, fell by over 7% despite reporting guidance-beating full-year results.

">2:46pm: US markets little changed ahead of tech earnings

Stocks in New York made subdued early progress ahead of earnings from Alphabet and Microsoft after the closing bell.

Shortly after the opening bell, the Dow Jones Industrial Average was little changed at 38,334.51, the S&P 500 marginally lower at 4,925.99 and the Nasdaq Composite was down 0.1% at 15,613.72. 

General Motors gained soared 9.4% after fourth quarter earnings beat expectations, helping drag Ford 2.1% to the good.

But UPS tumbled 5.7% after 2024 guidance disappointed the Street and the firm said it was cutting 12,000 jobs in a bid to save $1 billion.

In economic news, the US house price index rose both annually and on-month, according to the Federal Housing Finance Agency on Tuesday.

The US housing price index rose by 0.3% in November on-month, after rising by the same amount from September to October.

">3:15pm: Carnival rises as record bookings offset Red Sea hit

Carnival PLC shares have risen 3.6% after the cruise operator said it has not seen an impact on booking trends due to the Red Sea situation and has no other Red Sea transits until November 2024.

It expects the Red Sea rerouting to have an adjusted earnings per share impact of $0.07 to $0.08 for full year 2024, with the vast majority of the impact in the second quarter.

It said this hit would more than offset by an early and robust start to wave season (peak booking period), which has exceeded expectations, with bookings volumes since November hitting an all-time high.

For 2024, Carnival said it continues to have the best booked position on record, with both pricing and occupancy considerably higher than 2023 levels.

In fact, the first half of 2024 is almost fully booked, it said.

Carnival believes its continued strong bookings momentum is expected to deliver outperformance during the year, offsetting the Red Sea rerouting impact.

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