On Friday, British American Tobacco (BAT) shares dropped more than 2 % in light of the US Food and Drug Administration (FDA) banning the sales of six Vuse Alto vape flavours in the U.S.

BATS shares are down 3.5% and are worth 2,448p at the time of writing.

On Thursday, the FDA stated that it has issued a ban on three menthol and three mixed-berry vape flavours in the U.S. These Vuse Alto products are being sold by BAT´s subsidiary, R.J. Raynolds.

Now, BAT is not allowed to market or sell these flavours within the U.S. According to the FDA statement issued on Thursday, these vapes did not meet the FDA Protection of the Public Health standards.

More specifically, the FDA stated that these six flavours should be banned as they do not seem to be helpful in either reducing the amount of cigarettes consumed by adults who already smoke or in making these adults switch from cigarettes to vaping.

Vuse Alto is the main vaping product sold by BAT in the US. The newly banned menthol flavour alone accounts for up to 75% of all of BAT´s US sales, said Jefferies analyst Owen Bennett in a comment to Reuters.

“Vaping and e-cigarettes—so-called ‘next-generation products’—were  the industry and British American Tobacco’s answer to increasingly tight restrictions on the sale of cigarettes,” said Russ Mould, AJ Bell Investment Director, in a comment for UK Investor Magazine.

“If regulators start clamping down hard in these new areas too, it will raise questions about the sustainability of the business in the decades to come,”, he continued.

The FTSE 100 fell on rates concern on Friday with housebuilders, banks and consumer discretionary stocks among the most heavily hit.

Another day and another shift in sentiment driven by interest rate expectations. On Friday, the concerns were centred on UK interest rates and comments from the Bank of England’s chief economist.

“The higher-for-longer interest rate narrative just became louder. The Bank of England’s chief economist, Huw Pill, has said the bank won’t be quick to cut rates – even if a moderation of inflation occurs,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.

“Simply put, inflation needs to be closer to the 2% target before anyone can get their hopes up that the cost of living and borrowing is about to sweep down to more palatable levels.”

Housebuilders Taylor Wimpey and Barratt Developments struggled with the prospect of higher mortgage rates for an extended period as the two fell more than 1%.

UK banks were also weaker as investors weighed how higher borrowing costs would impact the ability of their customers to repay debt.

Consumer discretionary constituents Kingfisher and JD Sports were down 2.1% and 2.7% respectively.

St James’s Place was the biggest faller following media reports the wealth manager was facing increased scrutiny from the regulator regarding charges.

Red Rock Resources shares jumped on Friday after announcing assay results from their lithium project in Zimbabwe operated by subsidiary African Lithium Resources.

Three sets of 2kg pegmatite samples were sent for testing at an ISO-accredited laboratory in Harare, Zimbabwe. The results were as follows.

These results are supportive of economically viable lithium grades and will spur further evaluation of the project.

Red Rock Resources shares were over 38% higher at the time of writing on Friday.

Red Rock Chairman Andrew Bell commented:

“These high grade Lithium Oxide results show the potential that exists, and we continue discussions with potential customers and contractors. Further news will be released as it becomes available.

“The technical information in this announcement has been reviewed by Mr Joseph Komu, a member of AusIMM and a Manager employed by the Red Rock group. Mr Komu is a member of a recognised professional organisation and has sufficient relevant experience to qualify as a qualified person as defined in the Guidance Note for Mining, Oil and Gas Companies published by AIM.”

St James’s Place shares tanked on Friday on reports the regulator was unhappy with their efforts to make their charging structure fairer for clients and were set to change their fee structure.

St James’s Place shares were down 15% at the time of writing on Friday.

St James’s Place’s complex charging structures are facing further scrutiny following the introduction of the Consumer Duty earlier this year. Many argue St James’s Place’s fee structure is unclear and penalises clients for exiting early.

Consumer Duty required firms to assess their practises and place their customers at the centre of their business decisions. St James’s Place has been under fire for unfair charges for some time and the pressure ramped up this year leading to sharp declines in their share price.

In a statement released on Friday, St James’s Place said:

“As disclosed in our Half-Year Report & Accounts published on 27 July 2023, we continue to build on the work completed for Consumer Duty. This programme includes an assessment of our fees and charging models to ensure we operate with a simple and scalable charging platform for the long term.”

“Whilst the evaluation has not yet been completed and therefore no decision has been made, we are confident that all the options under consideration will ensure value for clients and a strong, secure, and sustainable business for all stakeholders. We naturally continue to engage with all of our primary regulators during this process.”

The FTSE 100 rose on Thursday despite US CPI inflation exceeding expectations in the year to September.

US CPI inflation held steady at 3.7% in September and although it was higher than economists had expected, monthly inflation fell to 0.4%.

The US inflation read did little to knock investor confidence in London on Thursday as BP and Shell rose on higher oil prices helping support the FTSE 100.

US interest rates

A raft of recent comments from US central bankers suggested rates would hold steady in the short term and today’s reading will cloud the outlook for investors. US stocks fell in the immediate reaction.

“US inflation has come in a little higher than expected, leaving the path of interest rates unclear. Headline inflation decelerated to 0.4% from 0.6% in September (on a monthly basis), slightly ahead of consensus expectations of a 0.3% increase,” said Richard Flax, Chief Investment Officer at Moneyfarm.

“Core inflation, which is the important metric followed by the Fed, remained unmoved at 0.3% month on month. Annual headline inflation came out at 3.7% against an expectation of 3.6%. Following recent comments from Fed governors, market-based indicators implied no rate increase at the next meeting. This report suggests that the decision may be more finely balanced than market pricing might suggest.”

The FTSE 100 closed 0.3% higher while US stocks were treading water.

BP was the top gainer adding 3%.

EasyJet shares crashed on Thursday as investors disembarked from the airliner after the company said they would expand their fleet and restart dividends.

EasyJet said that they are aiming to buy up to 257 of the AirBus jets and aim to restore EasyJet’s dividends, which were suspended during COVID.

While the proposed deal with Airbus is still a subject to shareholder approval, EasyJet is reportedly aiming to add up to 157 aircraft and 100 A321neo jets to its existing 330 aircraft.

EasyJet shares are down 7.50%, while AirBus shares are up 0.65% at the time of writing.

In addition to the suspended dividends, the company also recorded substantial losses during the pandemic.

Now, after a record summer, the company forecasts an annual next year profit of up to 460 million GBP. EasyJet further mentioned that they are aiming to hit a medium-term pretax profit of more than 1 billion GBP.

Alas, for all the upbeat targets and strong performance over the summer, investors were nervous about the investment in the new fleet and shares sank on Thursday.

The human tragedy unfolding in Israel causing cancelled flights was also hitting sentiment in the airline sector.

Carbon Capture

Earlier this week, EasyJet also signed up for AirBus’s Carbon Capture Offer, becoming the first airline in the world to join the initiative.

AirBus uses Direct Air Carbon Capture and Storage (DACCS) technology, which utilises high-powered extraction fans to filter and remove CO2 emissions from the air, after which the gases are stored in underground reservoirs.

The DACCS technology is said to have the ability to extract and capture the exact amount of CO2 gas released by any aeroplane’s engine during any flight.