Must read: FTSE 100 above 7,800, De La Rue, US inflation, Twitter, UK house sales

Our head of investment rounds up the morning's big news.

GLOBAL MARKETS 

European markets have opened cautiously higher, with the FTSE 100 holding just above the key 7,800 level. Markets are waiting for the latest US inflation data for clues into the Federal Reserve’s next move, with hopes that the central bank could be close to the peak of the current rate hiking cycle.

Overnight, markets closed mostly higher, with Japan's Nikkei and the Aussie ASX 200 leading the gains.

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Elon Musk told the BBC that Twitter is ‘roughly break even’ and said the social media business now has 1,500 employees, down from just under 8,000 before the takeover in October. The billionaire described running the company as a ‘rollercoaster’ and ‘quite painful’ in an unexpected sit down with the British broadcaster.

RIGHTMOVE UK HOME SALES 

Rightmove said the number of agreed home sales in March was just 1% below pre-pandemic levels from March 2019, but is down 18% year-on-year. A pickup in buyer demand resulted in a 10% increase in agreed sales from 2019 versus an 11% drop at the start of the year.

However, buyers are having to reduce their asking prices in order to achieve a sale, with a third of properties listed for less, a sharp increase versus 19% last year. London is recovering the most with a strong rebound in demand for flats. 

The market has been recovering since the turmoil around the mini-budget last year which sent mortgage rates temporarily sharply higher. Reduced asking prices have helped to generate a pickup in sales, with particular strength in the British capital thanks to strong demand from workers and overseas buyers for London apartments. With the housing market likely to cool further this year, and the Bank of England nearing the peak of the rate hiking cycle, we could see more buyers return to the market, as the recent headwinds which have stymied transactional activity subside.

DE LA RUE 

De La Rue (LSE:DLAR) issued a profit warning, with full-year earnings for fiscal 2023 expected to fall short of market estimates. 2023 adjusted operating profit is now seen coming in at a mid-single digit percentage and for fiscal 2024 De La Rue forecasts a figure in the low £20 million range. 

The British currency and passport maker has been suffering from weak demand for banknotes which is languishing at a 20-year low. Activist investor Crystal Amber Funds recently said the group’s turnaround plan announced three years ago is failing ‘by every measure’, and the company is ‘failing to control’ various fees paid out. The activist has also been trying to remove Kev Loosemore as Chairman but he survived a vote in December. 

In recent years, De La Rue has struggled with the major loss of its British passport contract after Brexit, increased costs, supply chain woes, and a structural decline in demand for physical cash amid the rise of contactless payments and digital banking. 

Shares in De La Rue have plunged by over 30% today, bringing its one-year loss to around 68% and its five-year share price decline to more than 92%. Drastic change is needed in order to convince shareholders of a rosier outlook.