Business information stay: FTSE 100 rises in direction of new report excessive, Meta set for $15bn AI deal
The FTSE 100 closed just short of a new record high yesterday, but Wednesday brings a new set of factors which may sway investor sentiment, including Rachel Reeves detailing her spending review, which is expected to included £5bn in cuts.
Final results are in from the likes of Revolution Beauty – under the microscope with Frasers recently – while overnight markets in Asia reacted by pushing higher after another day of trade talks in London between Washington and Beijing.
Further reaction is expected to the news of the FCA giving the Pisces stock market for private companies the go-ahead, while speculation around the Bank of England preparing to lower interest rates once more next week also arose following lowered employment data and slowing salary growth. Meanwhile, in the US, stocks are poised to open flat or even slightly lower this afternoon.
Here’s all the latest news around business, money and the stock markets today:
‘Painful’ budget measures likely, say economists as Chancellor lifts spending
The Government could have to announce “painful” fiscal measures in upcoming Budgets to balance the books after revealing fresh spending plans, economists have warned.
On Wednesday, the Chancellor set out how she plans to spend hundreds of billions of pounds of taxpayers’ money, committing to growing departmental budgets and pumping more cash into the NHS.
She said previous tax increases – which included rises in company national insurance contributions in April – and looser borrowing rules have allowed higher spending on public services and increased investment.
However, Ms Reeves also stressed the Labour Government is committed to her recently-revised set of fiscal rules.
Meta set for $14.8bn deal for Scale AI stake
Several reports are reporting that Scale AI, a US-based startup which essentially labels the data used to train AI models, is set to sell a 49 per cent stake to Facebook owner Meta.
The deal is for $14.8bn (£10.9bn) and will see co-founder Alexandr Wang take a senior role at Meta, leading a “superintelligence” lab department, say reports.
It would value Scale AI at around $30.5bn in total.
Business headlines for Thursday: Halma, Tesco, UK trade and GDP
We’ll be wrapping up shortly so time for a quick look ahead to tomorrow and what we’ll be watching out for during the day:
Safety equipment firm Halma will be presenting their full year financial report, along with Young and Co brewery.
Meanwhile it’s Tesco’s turn for a trading announcement.
On the economics front, the latest figures for the UK GDP and the balance of trade will both be released by the ONS at 7am.
US stocks on the rise: Shopify, Warner Bros, Palantir, Tesla
The Nasdaq is up 0.43 per cent this afternoon after an hour’s trading – but some companies are looking much stronger in the market early on.
Shopify is leading the way on a 3.8pc rise, with Palantir hitting an all time high on the back of a 3.8pc increase themselves.
Starbucks, Warner Bros Discovery and Tesla are all well over 2pc higher too – the latter adding about $20bn in market cap to the company value today so far.
At the other end of the scale, Intel is down more than 4pc, T-Mobile down 2.3pc and the likes of Cisco, PepsiCo and CSX all down over 1pc so far.
Google offer to buy out staff in latest cost-cutting exercise
Google are offering to buy out staff as part of their cost-cutting, say multiple reports including AP and the Wall Street Journal.
Some staff in Google’s search, advertising, research and engineering units have been offered the voluntary exit programme, though it’s not certain how many are affected.
Layoffs started in 2023 and were then due to affect 12,000 people all told.
Shares in parent company Alphabet are up 0.4 per cent in early trading.
Andreas Adamides, CEO of Helm – a members network for founders of high-growth businesses – is similarly positive over the numbers, but cautions that real businesses are still struggling with previous changes.
“While this £86 billion investment is a game-changer for British innovation, we must not forget about the mid-market companies already driving our economy forward, even while battling increased costs like the recent employer NI rises.
“With unemployment rising as businesses face these additional burdens, we need this funding to work harder for the SMEs already creating jobs. The goal must be unlocking AI adoption for the thousands of fast-growing businesses ready to scale but locked out by complexity and cost.
“We need tangible solutions: AI deployment grants, streamlined pathways to access innovation clusters, and direct support for businesses ready to scale. Only when we bridge the gap between cutting-edge research and practical business application will Britain’s productivity truly soar.”
Here’s some comment on the spending review from Michelle Ovens CBE, the founder of Small Business Britain, who is also an adviser to the UK government’s Board of Trade.
“The Spending Review today struck an optimistic note focused on growth and levelling up, which is welcome news to small businesses. Growth in R&D funding, AI training and broader training and upskilling spend are encouraging announcements for small businesses looking to take advantage of the changing landscape. In particular, I am pleased to see the recognition of the need for a step change in small business financing through the growth in funding for the British Business Bank. The stated goals of the Bank to support marginalised communities, and in particular female founders, is at the heart of our mission at Small Business Britain, and we look forward to supporting the Government in their work here.”
US markets poised to open slightly higher
For much of the day US futures have suggested a lower opening – but that has changed in the past few hours.
The S&P 500 is set to open 0.3 per cent higher according to the latest numbers, with markets opening in about half an hour.
The Nasdaq is trading to open 0.4 per cent higher.
Stock markets react to spending review
In terms of immediate change in the markets, the FTSE 100 has regained the morning ground lost over the past few hours to sit 0.24 per cent up, under three hours before trading closes.
8,871.31p is the all time high and we’re currently just above that at 8,875.11p, so today could see a closing record for the benchmark index.
The FTSE 250 and AIM are both up more than 0.3 per cent today.
Spending review – housebuilders benefit from £39bn affordable home drive
Grants to support affordable housing to the tune of £39bn have been announced too.
The stated aims of 1.5m homes across the term of parliament have been suggested to be out of reach without further help.
The FTSE 100 housebuilders including Barratt Redrow, Persimmon and Taylor Wimpey have all been up between 1.4 and 1.9 per cent today in anticipation of this boost.
