Must read: FTSE 100 outperforms, oil price, Diageo

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

GLOBAL MARKETS 

European markets have opened mixed, with the FTSE 100 in the green driven by BT Group (LSE:BT.A) and Vodafone Group (LSE:VOD) which are at the top of the blue-chip index. Oil stocks like Shell (LSE:SHEL) and BP (LSE:BP.) are also outperforming thanks to underlying oil price gains. 

Markets are paying close attention to the latest European PMI figures which are trickling out this morning. Spain’s May services PMI hit 56.7 down from the previous reading of 57.9, while the composite PMI reached 55.2 also falling from 56.3 month-on-month. However, both remain in expansion territory, above the key 50 boom-bust divide.

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Saudi Arabia plans to reduce its oil output by 1 million barrels per day in July, landing its production level at around 9 million barrels per day, a multi-year low. This is in response to falling oil prices and concerns about a softer global demand outlook. The move by the Kingdom has helped support Brent crude and WTI, which initially surged this morning but have since pared gains, with the key benchmarks currently trading higher by more than 1.5% each. 

China’s Caixin service PMI hit 57.1 in May versus 56.4 in April, the fifth consecutive month of expansion after its anti-Covid lockdown measures were unwound late last year, although the world’s second largest economy has experienced a bumpy return to economic normality. Japan’s services PMI hit 55.9 in May, the ninth straight month of growth and an improvement from April’s reading of 55.4.

US futures are mixed after the S&P 500 logged its best week since March and the Dow posted its best session since January, thanks to an impressive US jobs report and an averted debt ceiling disaster.

DIAGEO 

Debra Crew has taken over the role of CEO at Diageo (LSE:DGE) immediately, earlier than the expected 1 July. Departing CEO Sir Ivan Menezes is in hospital receiving treatment for medical conditions and has undergone emergency surgery on a stomach ulcer. He will officially retire from the board on 30 June. 

Menezes was appointed CEO in July 2013 and has steered the drinks brand through multiple challenges including the pandemic over his ten-year term at the helm. In March it was announced that Crew would become the first female chief executive of Diageo, adding to just a handful of female CEOs on the FTSE 100. Until now she has been chief operating officer since October 2022 having joined the firm in 2019. 

It is encouraging to see a female leader appointed to the top job at a FTSE 100 giant. However, it also highlights how few women there are in CEO roles on the blue-chip index. 

Shares in Diageo are down around 7% so far this year amid the backdrop of the cost-of-living crisis and inflationary cost pressures, underperforming the FTSE 100 which is modestly higher. This suggest there is plenty of work for Crew to do to reinvigorate the shares.