(Evening Standard)

Stock markets and cryptocurrencies have rallied at the end of another volatile week of trading.

Global recession fears triggered heavy selling yesterday as the FTSE 100 index closed 1.6% lower on the back of weaker mining stocks.

A late recovery on Wall Street helped the mood today, but S&P 500 remains close to bear market territory after falling 18% since January. Bitcoin, which yesterday fell below $26,000 in a flight from risk, recovered today.

FTSE 100 Live Friday

  • FTSE 100 higher after turbulent week

  • S&P 500 near to bear market territory

  • Elon Musk says Twitter deal ‘on hold’

  • Bitcoin recovers to $30,000 after recent selling

Elon Musk says Twitter deal ‘on hold’

11:07 , Simon Hunt

Elon Musk has said his $44 billion acquisition of Twitter is “on hold” following a report by the company over its estimated number of spam and fake accounts.

The billionaire Tesla owner tweeted: “Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users.”

Twitter gave an update on the estimated number of spam users on the platform in its most recent quarterly report, stating: “We have performed an internal review of a sample of accounts and estimate that the average of false or spam accounts during the first quarter of 2022 represented fewer than 5% of our mDAU [monetisable daily active users] during the quarter.

“After we determine an account is spam, malicious automation, or fake, we stop counting it in our mDAU, or other related metrics.”

MDAU is a key metric in determining the value of social media companies, as it is used to help calculate the amount of advertising revenue the platform is able to make.

Twitter shares have sunk 21% in the pre-market in New York following the tweet.

Read more.

Smartphone demand ‘dropping like a stone’

10:59 , Simon Hunt

The world’s biggest microchip maker has said demand for mobile phones and computers has dropped “like a rock” as war in Ukraine and Covid lockdowns in China take their toll on consumer demand for electronics.

The boss of Semiconductor Manufacturing International Co. (SMIC) told investors: “There are at least 200 million units of smartphones that will disappear suddenly this year and the majority of them are from our domestic Chinese phone makers.

“We cannot yet see an end to the downtrends in these segments.”

Read the full story.

FTSE 100 rallies, Vodafone lower after downgrade

10:21 , Graeme Evans

Another troubled week for investors ended on a brighter note today as buyers returned to the beleaguered tech sector and cryptocurrencies pulled out of their nosedive.

Comments from Federal Reserve chairman Jerome Powell allaying fears of steeper interest rate rises improved the mood before Asian markets rallied on speculation of further policy support for China’s Covid-hit economy.

Mounting recession fears had previously triggered a flight from risk to leave the S&P 500 on the brink of bear market territory at 18% lower than its January peak.

UBS Global Wealth Management continues to see positives but warns sentiment is unlikely to improve until there’s clarity on the 3Rs — rates, recession and risk. Its central scenario remains that a recession can be avoided and that corporate earnings will continue to grow in 2022 and 2023.

Its optimism was echoed in today’s performance of the FTSE 100 index, which climbed 88.61 points to 7321.95 — albeit 1% lower for the week.

Asia-focused shares including HSBC and Prudential were 2% higher on hopes of a China interest rate cut early next week. Ocado, whose valuation has slumped more than 20% so far this month, improved 3% or 25.8p to 799.8p on wider tech buying.

The improved risk appetite extended to cryptocurrencies as Bitcoin rebounded from an 18-month low to trade above $30,000.

On London’s fallers board, Vodafone shares were 2.1p lower at 116.6p after Jefferies analysts removed their “buy” recommendation and lowered their price target by 25p to 125p to reflect headwinds including the cost of living squeeze.

The downgrade adds to pressure on Vodafone chief executive Nick Read ahead of the mobile phone giant’s full-year results on Tuesday.

Jefferies said: “We recognise the defensive attractions of a large-cap telco. But Vodafone’s credentials are undermined by forecast risk and a strategic plan not playing out.”

The FTSE 250 index rallied 266.74 points to 19,747.62, led by a rebound of 8% for private equity firm Bridgepoint and gains of 6% for consumer-focused technology stocks Moonpig and Trustpilot.

Dunelm among “top picks” for retail recovery

09:31 , Graeme Evans

“A rabbit in the headlights“ is Peel Hunt’s assessment of the general retail sector following a recent collapse in share prices.

However, the broker’s retail team of John Stevenson and Jonathan Pritchard believes this has created a number of “buy” opportunities.

They said: “Clearly, we are in for some downgrades, but this is not a re-run of the financial crisis. Consumers are not retrenching in fear, they are facing an erosion of spending power. Retailers’ margins will carry some of the pain.”

Peel Hunt’s list of top picks include Dunelm, Pets at Home and JD Sports as they appear least exposed to a consumer downturn and margin squeeze and trade at a substantial discount to their longer-term valuations.

Over a two or three year view, the broker sees recovery potential in e-commerce names such as Boohoo and ASOS.

FTSE 100 1% higher, Ocado rallies 5%

09:02 , Graeme Evans

Asia-focused shares including HSBC and Prudential are more than 2% higher amid hopes of further support to help China’s economy through current Covid disruption.

The interest rate cut speculation pushed Asia markets higher as sentiment improved generally after this week’s heavy selling.

The FTSE 100 lifted 1.1% or 83.25 points to 7316.59, with Ocado the top riser as investors returned following losses of more than 20% so far this month. The grocery warehouse technology business added 5% or 36.4p to 810.4p.

Vodafone shares declined 2p to 116.75p after broker Jefferies removed its “buy” recommendation with a 25p lower price target of 125p.

The FTSE 250 index lifted 1.3% or 258.81 points to 19,739.79, led by a rebound of 10% for private equity firm Bridgepoint and gains of more than 5% for consumer-focused technology stocks Moonpig and Trustpilot.

S&P near to bear market territory

08:24 , Graeme Evans

The S&P 500 is heading for a sixth weekly decline having fallen 18% from its January peak, leaving the index within 100 points of bear market territory at 20% lower.

UBS Global Wealth Management said investor sentiment is unlikely to improve until there’s clarity on the 3Rs — rates, recession and risk.

Its chief investment officer Mark Haefele added: “The hawkish shift by the Federal Reserve has been a drag on equity markets, contributing to a rise in yields this year and thus giving investors less incentive to own riskier stocks.

“For the anticipated rise in policy rates to moderate, investors will need assurances that inflation is on a consistent downward trend.”

The bank’s central scenario remains that a recession can be avoided and that corporate earnings will continue to grow in 2022 and 2023.

FTSE 100 set to open higher, Bitcoin rallies

07:41 , Graeme Evans

A late fightback for Wall Street markets should mean Europe enjoys a stronger session at the end of another volatile week for investors.

Persistent inflation, slowing economic growth and the prospect of sharply higher interest rates have spooked markets, leaving the tech-focused Nasdaq 6% lower this week despite last night’s rebound into positive territory.

The FTSE 100 index lost all Wednesday’s 100 point gains in trading yesterday as mining stocks including Glencore tumbled on the weaker demand outlook CMC Markets is forecasting a recovery of 70 points to 7303 after Asia markets continued the momentum built by the late improvement on Wall Street.

Sentiment is likely to remain fragile, however, as this week’s US inflation figure of 8.3% has raised the prospect of more aggressive action by Federal Reserve to get prices back under control.

Yesterday, San Francisco’s Mary Daly became the latest Fed official to make the case for another two half point increases at the next two central bank meetings, while chairman Jerome Powell said the priority was to get inflation back under control.

The flight from risk assets has sent shockwaves through cryptocurrency markets, although there was some respite today as Bitcoin returned above $30,000. Oil prices are also firmer, with Brent crude futures trading at $109 a barrel this morning.