That’s about it from London. Our team in New York has crunched the numbers. Here’s their take …
Perhaps it is time to remind ourselves why Snapchat has become so big. Something to do with celebrities and selfies?
And Lewis Hamilton, apparently.
Updated
And here it is, Reuters are reporting (in capital letters):
SNAP INC OPENS AT $24 ON NYSE VS $17 IPO PRICE
The price is still edging up, it seems. This just in from Reuters…
UPDATE: $SNAP shares indicated to open between $23.50 and $24.50 versus $17 IPO price
— Reuters Business (@ReutersBiz) March 2, 2017
The indicative opening price for Snap Inc has edged up to $22-$24 a share.
Snap shares jump 30% as trading gets underway
Shares in the Snapchat owner have an indicative opening price of $21-$23 a share.
So that takes them more than 30% higher than the IPP price of $17 a share.
Still waiting for Snap’s share price to come in. In the meantime, here’s more about the company’s messaging app, Snapchat:
Wall Street opens (slightly) lower
While we wait for trading in Snap to get underway, here’s how US markets opened:
- Dow Jones: -0.04% at 21,108
- S&P 500: -0.15% at 2,392
- Nasdaq: -0.1% at 5,896
No new records yet...
Updated
Snap’s chief executive Evan Spiegel and chief technology officer Bobby Murphy have rung the opening bell at the New York Stock Exchange.
Excitement is building ahead of Snap’s debut trading session on the New York Stock Exchange.
Shares in the company behind the messaging app are expected to soar after the IPO was over subscribed by more than 10 times.
After pricing its IPO at $17 a share, Snap has a market value of roughly $24bn.
Snap is losing money, but it's being valued at $24 billion before it makes one of the biggest market debuts in years https://t.co/YeH6gLJdzq
— The New York Times (@nytimes) March 2, 2017
IPO #snapchat debuts at $24bn as shares go public today at $17.
— IGSquawk (@IGSquawk) March 2, 2017
IG clients predicting +21% in value given grey market price. #snap #social
Greek PM and Trump to speak in the coming days
The US President is expected to speak to the Greek prime minister in the coming days. The substance of the call, according to well-placed sources, will be Greece’s ongoing negotiations with creditors and the role the International Monetary Fund may or may not play in the country’s current rescue programme.
Donald Trump has publicly tweeted that he thinks the Greeks are “wasting their time” staying in the eurozone. As the largest shareholder in the IMF, with a 17% share of the body’s voting power, Washington has effective veto power over many decisions. The IMF has yet to sign up to Greece’s third bailout programme, with Germany and the Netherlands saying its participation is vital if further emergency loans are to be disbursed to the debt-stricken country.
“The government is attaching great significance to the conversation in its bid to get a clearer picture of Trump’s position on several issues, not least the Greek bailout program,” the Kathimerini news paper wrote today.
With tensions also rising in the Aegean between regional rivals Greece and Turkey, Athens is also placing stock in Washington’s interventionist powers, diplomats say.
President Barack Obama, who chose to give his farewell speech abroad in the Greek capital, was aggressively supportive of Greece remaining in the single currency, stepping in when the country came closest yet to leaving the euro six months after Tsipras assumed power in mid-2015.
Trump’s Whitehouse chief of staff Reince Priebus, who is of Greek descent, told a visiting Greek delegation ahead of the president’s swearing-in that the new administration was determined to “fix Greece”, although he failed to make clear whether he meant in or out of the eurozone.
US jobless claims fall to 44-year low
The number of Americans filing for unemployment benefits fell to a near 44-year low last week, beating expectations.
There were 223,000 new claims in the week ending 25 February, lower than the 243,000 predicted by economists and lower than 242,000 posted a week earlier.
It was the lowest since March 1973, the US Labor Department said, and the 104th week in a row that claims were below 300,000 - a threshold associated with a healthy labour market.
Mike Ashley eyes Agent Provocateur takeover
Mike Ashley, the founder and chief executive of Sports Direct, is hoping to snap up Agent Provocateur.
The upmarket lingerie is expected to enter administration on Thursday with Sports Direct the favourite to buy the business out of insolvency proceedings.
Sky News reported earlier this week that Ashley had gone higher than private equity firm Lion Capital in a bidding war.
Agent Provocateur is owned by private equity firm 3i but the brand has struggled in recent years. 3i wrote down the value of its 80% stake in the business by £39m last year to reflect its problems and accounting irregularities were also uncovered.
Read our full story here:
Moody's: 'hard' Brexit among key risks for Ireland
A ‘hard’ Brexit is one of the biggest threats facing the Irish economy according to Moody’s Investors Service.
Another is the prospect of US corporate tax reforms. Moody’s stresses however that Ireland’s growth prospects remain strong.
Kathrin Muehlbronner, a Moody’s senior vice president and author of the report explains on the risks posed by Brexit:
Ireland has been growing strongly since 2014 and we expect it to continue to do so in the coming years. But the UK’s withdrawal from the EU could bring significant disruption to Ireland as the UK aims for a free trade agreement rather than participation in the single market.
Brexit will likely mean lower export growth, deeper disruption to well-established supply chains and the need to establish controls at the border with the UK, its second-largest export market after the United States.
Higher foreign direct investment inflows could mitigate some of the negative impact, as Ireland will likely be a key beneficiary from the diversion of investment from the UK. However, Ireland faces important supply constraints, in particular in the area of housing and might not be able to realise its full FDI potential.
And the risks posed by US corporate tax reform:
There is now the prospect of major corporate tax reforms in the US which constitutes an additional risk for Ireland’s foreign direct investment-focused economic model.
The scale of [this] risk to the Irish economy is still unclear as details of any US corporate tax rule changes have yet to be announced. But multinational companies are a crucial part of Ireland’s economic success and Ireland’s low corporate tax rate has been an important driver for foreign direct investment in the country.
Multinationals originating from the US account for around half of all foreign companies located in Ireland, implying that big changes in US corporate tax rules could heavily affect Ireland. In Moody’s view, new investment inflows into Ireland could be materially lower, while Ireland’s public finances would also be negatively affected.
Some reaction now to the eurozone inflation data earlier, which showed a pick-up in the headline rate to 2% in February from 1.8% a month earlier.
Jennifer McKeown, chief European economist at Capital Economics, says the inflation rise will prove temporary.
February’s rise in euro-zone consumer price inflation put it in line with the ECB’s 2% price stability ceiling for the first time since January 2013, but underlying price pressures remain subdued. The pick-up entirely reflected higher energy and food inflation while the core rate was unchanged at just 0.9%.
Florian Hense, economist at the German bank Berenberg, agrees, and suggests the European Central Bank will not feel the need to tighten policy at next week’s meeting:
The ECB will not have to rethink the thrust of its policies. The ECB will be very cautious not to make the same mistake it did in 2011 when it ended up hiking rates in April and July, just a few months before the Euro crisis erupted.
Would you be happy to travel in a driverless car?
The Guardian’s Gwyn Topham took a spin around East London in a self-driving electric Nissan Leaf. Here’s what happened:
And the story in full:
Greece is heading for fourth bailout, opposition leader claims
Moving over to Greece now, where the main opposition leader says the government is deliberately drawing out negotiations with creditors and preparing the country for a fourth bailout.
From Athens our correspondent Helena Smith reports:
Seven years after it was granted its first emergency loan programme, Greece is being prepared for a fourth bailout, says Kyriakos Mitsotakis, who heads the main opposition centre right New Democracy party.
In a wide ranging interview aired on Ant 1 TV on Wednesday night, the politician said prime minister Alexis Tsipras’ acceptance of further pension cuts and tax reforms was tantamount to a new adjustment programme that New Democracy would not be backing.
This government cannot get the country out of the impasse it is in. We will have additional measures that will reduce the tax-free threshold and reduce pensions. Mr Tsipras is encumbering citizens with the bill. He is not moving ahead with reforms. He can’t create jobs or attract investments. In essence he is bringing a fourth bailout through the backdoor.
Mitsotakis, who held talks in Berlin with the German chancellor Angela Merkel recently, said the leftist government was deliberately delaying bailout talks with creditors.
The [second bailout] review should have been concluded a year ago. The government is consciously delaying [it] for reasons of domestic consumption. There is a big danger that entry into the [ECB’s] quantitative easing [programme] will be missed.
The spectre of yet more cuts has caused rising alarm in Greece with pensioners taking to the streets. It comes as the Cologne Institute for Economic research says poverty in Greece has shot up by 40 % between 2008 and 2015.
“Greece is the big loser,” the think tank said in its latest study on the European economy, pointing out that the increase was the biggest among EU member states.
President Trump is awake and tweeting about his impact on markets:
Since November 8th, Election Day, the Stock Market has posted $3.2 trillion in GAINS and consumer confidence is at a 15 year high. Jobs!
— Donald J. Trump (@realDonaldTrump) March 2, 2017
Pound falls to a six-week low
The weak spots in the construction PMI survey have helped to push the pound to a six-week low against the dollar.
Sterling fell 0.25% to $1.2259 against a broadly stronger dollar. It also hit a two-week low against the euro, with one euro worth 85.90p.
Naeem Aslam at Think Markets said the outlook for the pound was very much dependent on how quickly Theresa May can push ahead with Brexit plans.
If she can trigger Brexit as per her deadline, it may push sterling even lower as this will send the message that Theresa May is in full control and her hard Brexit is taking shape.
On the flip side, if she cannot deliver this on time, this could be a positive thing for sterling, and the currency could rally all the way to $1.28, with a potential target of $1.30 a realistic target as well.
Earlier the Markit/CIPS UK construction PMI suggested activity in the sector grew in February at a similar pace to January.
The headline index edged up to 52.5 from 52.2, where anything above 50 signals expansion.
Civil engineers reported an acceleration in growth, while growth in housing construction slowed slightly. Construction of commercial buildings such as offices and shops slowed.
Firms were fairly upbeat according to Tim Moore, senior economist at IHS Markit and author of the report, but there were reports of weakening demand:
February’s survey data highlights that the UK construction sector has rebounded from its post- referendum soft patch but remains on a relatively slow growth trajectory. Weaker momentum in the house building sector was a key factor weighing on construction growth, alongside a renewed fall in work commercial projects.
There was little sign that the UK storms had a material impact on construction growth in February, although some firms noted that longer delivery times for roof tiles had added to supply chain issues. Instead, survey respondents mainly cited an underlying slowdown in sales growth, with the latest rise in new work the weakest for four months.
Cost pressures in the sector remained at an eight-and-a-half year high, as the sharp drop in the value of sterling since the Brexit vote pushes up the price of materials and goods imported from abroad.
The eurozone’s unemployment rate was unchanged in January at 9.6% - the lowest since May 2009.
There were 15.2 million unemployed people in the region, down 56,000 compared with December.
Greece has the highest jobless rate in the eurozone at 23%, while Germany has the lowest at 3.8%.
Youth unemployment also fell in January, by 198,000 compared with a year earlier to 2.8 million.
The youth unemployment rate remains high at 20%. The highest rate is 45.7% in Greece, and the lowest is 6.5% in Germany.
Eurozone inflation rises to 2%
The headline rate of inflation in the eurozone rose to 2% in February from 1.8% in January, bang in line with expectations.
Eurostat, the region’s statistics office, said energy prices, food, alcohol and tobacco were the main drivers of the rise.
Capita shares fall 9% as boss leaves amid profit fall
Shares in the outsourcing group Capita are down 9% after the company revealed a 33% fall in annual profits and said its chief executive Andy Parker was stepping down.
It follows confirmation that the company, which operates the London congestion charge, is to be relegated from the FTSE 100 because of a sharp fall in the share price.
Parker commented on his departure:
2016 has been a difficult year for Capita but the Company is now a simpler, more focussed group with a clear service offering and growth strategy, and a plan to achieve a stronger balance sheet.
We have achieved a great deal but going forward it is time for a new leader to take Capita through the next steps to renewed and sustainable organic growth.
If you’re feeling nostalgic following the news that the Football Pools is being sold for £83m, below is a potted history of the former British staple.
At its peak in the 1970s and 1980s, the pools had 15 million regular punters, helped by an army of door-to-door coupon collectors.
Football Pools sold for £83m
The Football Pools, once a staple of the British Saturday teatime, is about to change hands in an £83m deal.
Its owner, London-listed betting company Sportech, has agreed to sell the football lottery game to a company controlled by funds advised by European private equity investors OpCapita. The conditional sale agreement comes after a near-£100m sale of the Football Pools to its management team fell through in November.
The Football Pools dates back to 1923 and has struggled against the National Lottery, but is still popular with about 300,000 stalwarts who spend an average of just over £3 a week in the hope of scooping the maximum price of £3m. The business was formed from the merger of the three big pools operators, Littlewoods, Vernons and Zetters between 2000 and 2007.
The pools will still move into new premises in Liverpool city centre.
John Von Spreckelsen, chairman of OpCapita:
We are delighted to be acquiring the Football Pools, which occupies a unique place in British culture. Sportech has successfully modernised the business and we look forward to realising its significant growth potential. As part of that growth strategy, we plan to ensure existing loyal customers continue to enjoy the game and bring the Football Pools, already loved by so many, to an even wider audience.
Updated
Neil Wilson, senior market analyst, at ETX Capital, says Snap’s debut in New York coincides with a period of bullishness among investors:
Snap shares look set to fly when they begin trading in New York today after being priced at $17, above its target range. With the Dow closing above 21,000 for the first time the IPO comes at an incredibly bullish point for US, and indeed global, equities. Of course such bullishness is reminiscent of the dotcom bubble and this could be a high watermark for the market.
The offer was 10 times over-subscribed, making a strong case for the stock to pop on the open. Big institutional funds will step in to the main market to add to their holdings, forcing up the price.
Lessons to be learned from Facebook’s IPO?
We’ve also seen huge retail client interest in Snap shares – this is as big as the Facebook IPO in terms of the hype and buzz around it.
But trading in Snap shares could be choppy today. It could be pricing high and selling low. Facebook again is instructive – it endured a rocky start to life on the public markets, sliding from its IPO price before turning things around. Of course its IPO was beset by technical problems that the US exchanges are keen to avoid this time.
There is also a sense that the shares could be overpriced, based on some key fundamentals.
Snap shares expected to surge in market debut
Shares in Snap, the American technology company behind the messaging app Snapchat, will start trading in New York today.
Shares are expected to soar after it raised $3.4bn (£2.9bn) in its initial public offering (IPO) on Wednesday, above its price expectations.
Snap’s IPO was over-subscribed by more than 10 times, suggesting demand for shares will be strong when trading gets underway.
Reuters notes:
After pricing its IPO at $17 a share, the owner of the popular disappearing-message app has a market value of roughly $24 billion, more than double the size of rival Twitter Inc and the richest valuation in a US tech IPO since Facebook five years ago.
The share sale was the first test of investor appetite for a social-media app that is beloved by teenagers and people under 30 for applying bunny faces and vomiting rainbows onto selfies, but has yet to convert “cool” into cash.
Snap sells 200 million shares in IPO at price that suggests a $20 billion market value https://t.co/u1W8W0Jdem pic.twitter.com/mbPX3E02Rv
— Bloomberg (@business) March 2, 2017
FTSE at new record high
The FTSE 100 might only be up 4 points or 0.1% at 7,387 but it’s a new record high.
Hussein Sayed, chief market strategist at FXTM, says investors are on a high following Trump’s spending pledges despite the fact the President has yet to provide any detail.
Equities analysts and strategists including myself have been arguing for some time that if no further details were provided on how and when the proposed US tax reforms and spending plans will take place, the market rally should take a pause. However, US President Donald Trump provided no new details in his speech to Congress on Tuesday, and yet, stocks surged to new highs.
He also points out that rising expectations that the Federal Reserve will hike interest rates this month are also driving shares higher... usually such expectations would have the opposite effect as investors remain hooked on stimulus as the hangover from the financial crisis persists. Sayed says:
What’s even more interesting is markets now consider a tighter monetary policy a sign of confidence in economic growth and thus a reason to continue purchasing stocks, when for years post 2008 crisis it had been considered the most significant motive to dump stocks.
Does the market rally have legs?
There’s no doubt that improved economic conditions, consumer confidence, and higher inflation will all lead to higher earnings growth, but what markets are currently pricing in is more than just these factors. It’s mainly about tax reforms, and assuming a reduction in the U.S. corporate tax from 35% to 20%, although difficult to calculate its impact on earnings, is expected to lift net profits from 10% to 15%, and this is what investors are betting on.
If you still want to ride the current bullish momentum wave, pray that Trump’s tax reduction plan succeeds as soon as possible.
The spotlight is on key elections coming up in Europe and all bets are off following Britain’s shock Brexit vote and America’s decision to install Donald Trump in the White House.
Could the Netherlands deliver the next surprise? Here is a useful guide to the Dutch elections on 15 March:
The Dutch parliamentary elections are on 15 March: here's what you need to know https://t.co/TolVQWJiMd
— Claire Phipps (@Claire_Phipps) March 2, 2017
As markets settle following a record-breaking run, investors await the flash eurozone inflation rate for February, to be published at 10am.
If economists polled by Reuters get it right, and the headline rate rises to 2% from 1.8% in January, Mario Draghi is likely to come under renewed pressure over the European Central Bank’s stimulus measures.
Specifically, pressure could build on the president of the ECB to announce policy tightening at next week’s meeting of the governing council.
We’ll bring you the figure and reaction when it comes.
FTSE 100 rises in early trading
The FTSE 100 is up slightly this morning, rising 0.1% or four points to 7,387.
Elsewhere in Europe major markets are up with the exception of Spain.
- German’s DAX: +0.03% at 12,071
- France’s CAC: +0.2% at 4,9781
- Italy’s FTSE MIB: +0.01% at 19,367
- Spain’s IBEX: -0.04% at 9,748
- Europe’s STOXX 600: +0.1% at 376
The FTSE 250, which is more domestically focused on the UK than the FTSE 100, is down 0.1% at 18,961.
IFS: Slowdown in UK living standards worst in 60 years
Britain is in the midst of the weakest growth in living standards in at least 60 years, with low income families faring the worst, the Institute for Fiscal Studies is warning today.
In a pretty gloomy report on poverty, inequality, and living standards, the thinktank says household incomes will not grow at all over the next two years. On average, by 2021-22, families will be £5,000 a year worse off than they might have reasonably expected back in 2007-08 before the financial crisis took hold.
Inequality and child poverty are also expected to rise over the next five years as a direct result of government policies.
Andrew Hood, an author of the report and a senior research economist at IFS, explains:
Weak earnings growth combined with planned benefit cuts means that the absolute poverty rate among children is projected to be roughly the same in 2021–22 as it was back in 2007–08. In the decade before that, it fell by a third.
Tax and benefit changes planned for this parliament explain all of the projected increase in absolute child poverty between 2014–15 and 2021–22.
A Treasury spokesperson has responded to the report:
We are taking action to support families with the costs of living by cutting taxes for millions of working people, doubling free childcare for nearly 400,000 working parents and introducing the National Living Wage – a significant pay rise for the lowest earners.
More people are now in work than ever before with living standards also forecast to rise over this Parliament.
Here is our full story:
Updated
The agenda: Trump boost for markets, eurozone inflation
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
President Trump’s pledge to go on a major spending spree drove a surge in investor optimism, pushing indices on both sides of the Atlantic to fresh record highs on Wednesday.
Asia followed Wall Street higher this morning with the Hang Seng and Nikkei both just about in positive territory.
CMC’s Michael Hewson has this take on investor mood:
Records tumbled one after the other yesterday as equity markets across the world went on a tear in the wake of US President Donald Trump’s pledge to spend up to $1trn on rebuilding the infrastructure of the United States, with the FTSE100 and FTSE250 both making an closing at new record highs, as the reflation trade took another leg higher.
US markets also surged with the Dow opening above 21,000 and the S&P500 also hitting new record highs above 2,400, as markets posted their best one day gain of 2017.
Also coming up day we have the flash estimate of eurozone inflation which is expected to show a pick up in the headline rate to 2% in February from 1.8% in January, potentially causing problems for Mario Draghi.
We also have eurozone unemployment.
In the UK we have the latest snapshot of construction from the PMI survey for February.
And over in the US we have weekly jobless claims figures.
We will be bringing you all the latest developments as the day unfolds.
