What to watch: Record activity on Rightmove, record influx at Hargreaves Lansdown, and US jobs in focus
Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:
Rightmove surges on ‘record levels’ of activity
Shares in property portal Rightmove (RMV.L) surged on Friday as investors looked past a fall in half-year revenue and instead focused on signs of a recovery in the housing market.
Rightmove published its half-year report on Friday, showing revenue declined by 34% to £94.8m in the first six months of the year. Operating profit dropped 43% to £61.7m ($81m).
However, the stock jumped over 7% as chief executive Peter Brooks-Johnson flagged “record levels” of activity in the housing market since it reopened in mid-May.
“It's quite incredible that 65 of our record days have been since 13 May,” Brooks-Johnson said in a statement.
Selling demand was up 50% on last year in June and July, while rental demand was 20% higher.
“Despite the current strong market we're mindful that potential economic challenges and further Covid restrictions in the second half of the year make it hard to predict how sustained the increase in activity will be,” Brooks Johnson said.
Hargreaves Lansdown
Investment platform Hargreaves Lansdown (HL.L) signed up a record number of new clients last year and bought a record amount of net new assets onto its platform.
Hargreaves Lansdown said on Friday it brought in net new business of £7.7bn in the 12 months to 30 June, which was 5% higher than last year. 188,000 new customers joined the service.
The influx of new business helped push revenue 15% higher to £550.9m, while pre-profit rose 24% to £378.3m.
“We have delivered a strong performance, despite an external environment of persistent challenge,” chief executive Chris Hill said in a statement.
Hargreaves Lansdown increased its total dividend by 31%. Shares rose 4%.
Standard Life Aberdeen hit by outflows
Investment business Standard Life Aberdeen (SLA.L) reported lower half-year revenues as client outflows continued.
Fee revenue fell 13% to £706m, driven by client outflows and changing asset mixes. Pre-tax profit dropped by 30% to £195m.
Chief executive Keith Skeoch called it a “resilient performance” in the face of the pandemic.
“There is no question that the impact of COVID-19 has played a role on our results today, and across our industry, particularly in relation to lower revenue,” Skeoch said in a statement.
“Our foundations are firm, we have a strong balance sheet which enables us to both invest in our business and maintain our interim dividend of 7.3p.”
Nicholas Hyett, an equity analyst at Hargreaves Lansdown, said there were “some promising signs” in the results.
“Lower revenue reflects historic outflows and a shift towards lower margin, and lower risk, money market funds by clients – and there’s really not much SLA can do about either,” Hyett said.
“However, the crucial equity funds have seen investment performance improve substantially, and while there’s still work to be done, if performance can be maintained that should drive future inflows.”
Shares were flat.
US jobs in focus
US jobs numbers will be closely watched when they are published later today.
Non-farm payroll numbers are due at 1.30pm UK time, with economists expecting 1.6m new jobs to have been created.
The official unemployment rate will also be published at the same time and is expected to fall from 11.1% to 10.5%.
“The employment picture is also likely to become much more uncertain as we head into the autumn and the US Presidential election, as US companies exercise caution ahead of what is likely to be a politically divisive campaign, as well as the prospect of a second wave of coronavirus infections as the weather gets colder,” said Michael Hewson, chief market analyst at CMC Markets.
German exports rise
Germany’s exports increased for the second month in a row in June, posting a 14.9% rise in the month from the previous month, although exports were still more than 9% lower than in June.
Germany’s federal statistics bureau Destatis said on Friday that exports in June totalled €96.1bn (£86.7bn ,$113.7bn), while imports rose 7% from May to €80.5bn.
Destatis said that Europe’s largest economy reported a seasonal-and-calendar adjusted trade surplus of €14.5bn in June.
The report comes after industrial production data this week showed a surge in new orders. Industrial production excluding construction and energy sectors increased by a little over 11% month on month from May.
TikTok ban hits stocks
European stock markets were mixed on Friday morning, as flaring tensions between the US and China largely offset solid economic data across the continent.
Shortly after the open, the FTSE 100 (^FTSE) was up 0.2%, the CAC 40 (^FCHI) fell 0.1%, and the DAX (^GDAXI) was up 0.2%. Spain’s IBEX 35 (^IBEX) dropped 0.3%.
Overnight, US president Donald Trump signed an executive order requiring all US companies to stop dealing with Chinese social media app TikTok within 45 days. Asian stocks fell in reponse.
Japan’s Nikkei (^N225) fell 0.3%, the Hong Kong Hang Seng (^HSI) dropped 1.8%, the Shanghai Composite (000001.SS) declined by 0.9%, and the Shenzen Component (399001.SZ) fell 1.5%. Australia’s ASX 200 (^AXJO) dropped by 0.6%.
Wall Street looked set for a lower open later today. S&P 500 futures (ES=F) and Dow Jones futures (YM=F) were down 0.2%, while Nasdaq futures (NQ=F) were 0.3% lower.
House prices hit record high thanks to post-lockdown moving boom
House prices reached an all-time high in July, thanks to a post-lockdown “mini-boom” in the property market.
The average house price hit £241,604 last month, according to Halifax’s long-running House Price Index. The average price was 1.6% higher than in June and 3.8% higher than in July 2019.
“Following four months of decline, average house prices in July experienced their greatest month on month increase this year, up 1.6% from June and comfortably offsetting losses in 2020,” said Russell Galley, managing director at Halifax.
“The average house price in July is the highest it has ever been since the Halifax House Price Index began, 3.8% higher than a year ago.”
On a quarterly basis, prices were down just 0.2%.
‘Black Friday’ at British Airways as pay cuts and job losses begin
Cabin crew at British Airways will soon find out whether they have been made redundant, on a day unions at the airline have dubbed “Black Friday.”
British Airways is planning to “fire and rehire” thousands of long-serving cabin crew members as part of its plan to reduce costs and trim up to 12,000 jobs from its 42,000-strong workforce.
Staff were told to either accept a voluntary redundancy package or to risk losing their jobs by applying for new roles with lower pay.
Just two-thirds of cabin crew workers are expected to be retained at the airline as part of the process. British Airways has said that around 6,000 staff have applied for voluntary redundancy, around half of the total roles the airline is planning to axe.
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