The FTSE was higher on Tuesday while Wall Street stocks fell (Peter Morgan, Associated Press)
The FTSE 100 (^FTSE) lost its gains by the end of the session on Tuesday, as Wall Street followed European stocks lower on the back of stronger-than-expected labour costs, indicating that the US economy faces persistent inflationary pressures.
Traders were also digesting new growth figures and inflation data for the eurozone.
Statistics body Eurostat said that the eurozone managed to escape recession, beating growth forecasts for the start of this year, with gross domestic product (GDP) across the single currency bloc expanding by 0.3% in the January to March period.
This means that the eurozone’s shallow technical recession is over after GDP shrank by 0.1% in both the third and fourth quarters of last year. It was lifted by stronger-than-expected growth in Germany, France, Italy and Spain.
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Meanwhile, consumer price inflation across the eurozone remained at 2.4% in the year to April, matching March’s reading.
London’s benchmark index was flat by the end of the day after news that UK taxpayers are set to cover £85bn of losses made by the Bank of England on its quantitative easing programme
Germany's DAX (^GDAXI) dipped 1% and the CAC (^FCHI) in Paris was 1.1% in the red.
The pan-European STOXX 600 (^STOXX) was 0.7% lower.
Wall Street opened in the red after the bell as US wages and salaries rose by 1.1% in the first quarter of the year
The pound (GBPUSD=X) was 0.3% down against the dollar in the morning trading at 1.2523.
“The spigot has been opened since it attained its new record high and the FTSE 100 continued to flow higher on Tuesday amid a raft of corporate announcements,” said Russ Mould, investment director at AJ Bell.
“The index took its cue from gains on Wall Street with the next key test of the relative optimism displayed by the market coming tomorrow with the latest meeting of the US Federal Reserve.
“While the Fed is expected to maintain the status quo on interest rates, commentary on its current thinking on the trajectory of rates in the remainder of the year will likely have a significant impact on markets.”
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LaToya Harding
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Well that's all we have time for today — thanks for following along as always. Be sure to join us again tomorrow bright and early for more of the latest market news.
Amazon earnings preview: AI initiatives expected to take focus
Exeter, UK-10 March 2024: An Amazon delivery box in front of a doorstep. Amazon is considered one of the Big Five American technology companies (Ambrosiniv)
Amazon (AMZN) is scheduled to post quarterly earnings after the bell on Tuesday, continuing a wave of Big Tech results that have so far wowed Wall Street but also flashed a warning of some impatience with heavy AI spending.
The company is expected to offer updates on the progress of its AI development, the state of its lucrative cloud business, and the growth of its advertising segment.
Amazon's report will arrive a week after its cloud rival and AI competitor Microsoft (MSFT) posted an impressive quarter, beating expectations on the strength of its cloud computing business.
The market cheered even louder for Google parent Alphabet's (GOOG, GOOGL) results, which outperformed on the top and bottom lines and came with an announcement of a new dividend, the latest in a trend among tech giants.
Huawei’s profits have surged more than six-fold after the Chinese tech firm overcame Western sanctions to steal market share from Apple.
It reported a 19.6bn yuan (£2.1bn) profit in the three months to March, up 564% on the same period a year ago.
The Shenzhen-based company unveiled its new Pura 70 smartphone series.
Huawei added that revenues had risen 37% in the quarter to 178.5bn yuan thanks to sales during the critical Chinese New Year period when shoppers typically spend heavily on electronics.
This marks a stark reversal in Huawei’s fortunes after chief executive Guo Ping said in 2020 that the company’s goal was “survival” after “nonstop aggression from the US government”.
LaToya Harding
US wages and salaries rise by 1.1%
US wages and salaries increased by 1.1% in the first quarter of this year, it has been revealed.
Meanwhile, in the year to March, wages and salaries rose 4.4%, and by 4.3% for private industry workers.
Paul Ashworth, chief North America economist at Capital Economics, said:
"The big question is whether wage growth is low enough to be consistent with hitting the 2% price inflation target on a sustained basis? 4.3% is still well above the pre-COVID average, but productivity growth is also significantly higher."
LaToya Harding
Robotics could help cut NHS waiting lists for cancer
Hospital waiting lists for cancer diagnoses and treatment could be “transformed” using robotics, experts and NHS medics have claimed.
The Independent has the details...
Robots being trialled on lung cancer patients at top specialist hospital the Royal Brompton could halve the time it takes to diagnose and treat tumours, according to one of the medics leading the trial.
The technology provides a 3D road map of a patient’s lungs, from the mouth to the location of the cancer, and could help surgeons remove tumours in one sitting.
The method allows doctors to target and remove cancer nodules on the lung with millimetre precision.
Before the procedure, a CT scan is performed and passed through software to create a detailed 3D diagram of the inside of the patient’s lungs from the mouth to the location of the cancer.
A thin, robot-guided tube, or catheter, is then passed through the patient’s mouth and into the airways, following this road map.
Once located, cancer cells are destroyed using heat in a process known as microwave ablation which involves performing a CT scan on a patient to locate the cancer and inserting a needle through the skin and straight into the tumour.
According to the NHS, more than 43,000 people each year are diagnosed with lung cancer in the UK, with smoking accounting for about 70 per cent of cases.
The disease is more likely to be treated successfully if caught early.
LaToya Harding
Gas prices rise
European gas prices have risen thanks to increased demand from Asia on the back of a heatwave.
Dutch front-month futures, the continent’s benchmark, rose as much as 5.2% towards €30 per megawatt hour, putting them on track for a second consecutive month of increase.
Meanwhile, a recent cold snap has led to some withdrawals from storage sites in Europe over the past fortnight. But stocks remain at their highest level for this time of year since 2020.
LaToya Harding
McDonald’s misses sales estimates after hit from Middle East boycotts
McDonald’s has missed sales forecasts as boycotts over war in the Middle East hit takings.
The fast food restaurant chain said its same-store sales increased by 1.9% worldwide in the first quarter, below Wall Street’s forecast of a 2.1% rise.
Like-for-like sales in its international markets division were slightly negative, falling by 0.2%, as the segment “continued to be impacted by the war in the Middle East”.
Customers across the Middle East and in Muslim-majority markets like Indonesia and Malaysia have been boycotting the company over its perceived support for Israel.
Chris Kempczinski, chief executive, said:
“Our global comparable sales growth in the first quarter marks 13 consecutive quarters of positive comparable sales growth with 30% growth over the last 4 years.
“As consumers are more discriminating with every dollar that they spend, we will continue to earn their visits by delivering leading, reliable, everyday value and outstanding execution in our restaurants.
LaToya Harding
Feature on gold, gold bars, gold production. The price of gold has risen to more than $ 1,700. in recent days In the picture: gold bars at the company Ögussa in Vienna. - 20120130 PD4749 - Rechteinfo: Rights Managed (RM) (APA-PictureDesk, APA-PictureDesk)
Gold prices dipped on Tuesday, with market focus turning to this week's impending Fed meeting and rate decision. It comes as geopolitical instability has been a primary driver of gold's value, spurred by heightened haven demand.
This surge has seen bullion prices climb nearly 20% in the past two months, peaking at an all-time high of $2,431.
Ricardo Evangelista, senior analyst at ActivTrades, said:
“However, as reports surface of peace talks between Israel and Hamas, reducing prospects of regional conflict escalation, trader attention shifts to the Federal Reserve and its forthcoming monetary policy announcement.”
“The decline in gold prices mirrors concerns that Jerome Powell, grappling with persistent inflation and a robust US economy, may adopt a more hawkish stance, delaying expectations for a rate cut until the fourth quarter of the year or even as far as 2025.”
“Such a scenario could spur dollar appreciation and higher treasury yields, posing a negative outlook for gold prices.”
LaToya Harding
Wall Street set to open lower
Wall Street stocks are set to open lower later today as traders await results from Amazon, AMD, Samsung, HSBC, Hermes, and Sanofi.
Amazon (AMZN) will report earnings after the bell in what will be a closely watched quarter for tech companies' progress in the AI sector.
Analysts on Wall Street expect revenue of $142.6bn (£113.8bn) versus the $127.4bn in the same quarter last year. Adjusted earnings per share are predicted at $0.82, more than double the $0.31 in Q1 2023.
Meanwhile, online stores, Amazon Web Services and advertising are all expected to have grown. The E-commerce company has said it sees the potential for AI initiatives to generate tens of billions of dollars for its cloud business.
Pierre Veyret, technical analyst at ActivTrades, said:
"Investors, torn between monetary uncertainties and a solid earnings season so far, have a lot on their plate.
“Even if the overall environment remains somewhat supportive of equity markets, the development of many different market drivers simultaneously makes us expect volatility to remain high over the next few trading sessions.”
LaToya Harding
Mercedes-Benz shares fall as profits drop 34%
Luxury carmaker Mercedes-Benz (MBG.DE) left its guidance unchanged for the year and said it would continue share buybacks as its earnings dropped 34% in the first quarter.
Poor demand for electric vehicles was behind the lag, with earnings before interest and tax dropping to $3.9bn.
The company expects an increase in sales in the coming quarters, with an improvement in the Chinese market.
LaToya Harding
UK shop price inflation cools as retailers ramp up clothing deals
Clothing and footwear were among items that led the charge in a drop in annual shop price inflation in April, as the heat continues to dial down for UK consumer spending.
Shop price inflation eased to 0.8% in April, down from 1.3% in March, below the three-month average rate of 1.4% according to new figures from the British Retail Consortium. Shop price annual growth is its lowest since December 2021.
Non-food items were in deflationary territory, down 0.6% in April from a rise of 0.2% the previous month. This is below the three-month average rate of 3.9%. Inflation is its lowest since March 2022.
The falls in clothing and footwear are due to retailers ramping up promotions to encourage consumer spend, Helen Dickinson, NRC CEO said.
Meanwhile, food inflation slowed for the twelfth consecutive month to 2.4% from 2.6% a month earlier, as fresh products such as butter, fish and fruits, continued to fall in price due to easing input costs and intense competition between grocers.
Ambient food inflation also decelerated to 4.9% in April, down from 5.2% in March. This is below the three-month average rate of 5.6% and is the lowest since June 2022.
"While consumers will welcome the lower shop price inflation, geopolitical tensions and the knock-on impact on commodity prices, like oil, pose a threat to future price stability," said Dickinson.
Glencore is on track to reach the top end of its profit guidance thanks to strong commodity prices and higher interest rates.
The miner said copper, zinc and coal production in the first quarter was broadly in line with the previous year, while nickel increased 14%.
While profits are set to be lower than the record levels reached during the energy crisis, it expects a strong year ahead.
Core profit from the trading unit is expected to be between $3bn to $3.5bn (£2.4bn to £2.8bn) this year. The company has a longstanding guidance range of $2.2bn to $3.2bn.
Russ Mould, investment director at AJ Bell, said:
“Glencore has been quiet on murmurs it might join the race to buy Anglo American, however its first quarter production report is a good reminder of how it is a big player in the copper space and how buying the rival would make it an enormous one.
“It’s fair to say that Glencore is one of the most ambitious companies in the mining sector. With its fingers in multiple pies thanks to having a commodities trading division as well as a traditional mining arm, Glencore wants to be the biggest and the best.”
LaToya Harding
UK government net R&D expenditure rises
The UK government’s net expenditure on research and development (R&D) rose to £15.5bn in 2022, up from £14bn in 2021, an increase of 10.5%. This was excluding EU R&D budget contributions.
Total net expenditure on R&D, including EU R&D budget contributions and knowledge transfer activities was £16.4bn during the year — an increase of 8.9% from £15bn in 2021.
Other key information is found below:
UK Research and Innovation (UKRI), which includes the UK's seven research councils, contributed the most to net expenditure on R&D (including EU R&D budget contributions plus knowledge transfer activities) at £6.2 billion, 37.9% of the total.
Civil R&D expenditure rose by £1.3 billion to a total of £13.4 billion in 2022, this is a larger increase than the rise seen in defence R&D of £217 million to a total of £2.1 billion in 2022.
In constant prices (adjusted for inflation), total civil net expenditure on R&D and knowledge transfer activities increased by 32.6% over the long term, from £10.4 billion in 2011 to £13.7 billion in 2022.
LaToya Harding
London rents hit record high of £2,633 a month
The costs of average advertised rental properties coming onto the market continue to balloon, especially in London, according to new data by property platform Rightmove (RMV.L), with average rental prices in the capital reaching a new record of £2,633 per calendar month.
The latest data shows that rental prices have reached new records for a seventeenth consecutive month across the country too, with the average price outside of London now £1,291 per month.
Despite the fact that average prices are now 8.5% higher than a year ago, there is potential relief on the horizon. The pace of rent growth has dropped for the second quarter in a row, with London experiencing a more significant pace of slowing rental growth than the rest of the country.
Average rents in the capital are now 5.3% higher than last year, with rent growth steadily slowing since the peak of 16.1% in the third quarter of 2022.
Tim Bannister, Rightmove's director of property science, said:
"The rental market is no longer at peak boiling point but it remains at a very hot simmer."
"Looking at data across the whole market, we can see some slow improvements for tenants with more choice, and competition with other tenants slowly starting to ease."
LaToya Harding
Eurozone inflation holds stead at 2.4%
Consumer price inflation across the eurozone remained at 2.4% in the year to April, matching March’s reading.
Services inflation slowed from 4% to 3.7%, while food, alcohol and tobacco inflation picked up to 2.8% from 2.6%. Non-energy industrial goods prices rose by 0.9%, down from 1.1%.
Lower energy prices, following the surge in oil and gas after Russia’s invasion of Ukraine in 2022, are helping the economy.
Neil Birrell, chief investment officer at Premier Miton Investors, said:
"Inflation in the eurozone came in as expected but is proving to be stickier than might have been hoped for, mirroring experiences elsewhere.
"The economy is moving along nicely though, meaning that, all in all, the ECB will be able to stay on track to be the first of the major central banks to push the “cut” button on interest rates, probably in June.
"The prospects for the eurozone are on the up, at a time when there is doubt creeping in for other economies’ prospects.”
LaToya Harding
Rental stock availability up 12.1% annually
Selly Oak, Birmingham, 4th February 2024 - Houses for rent in Selly Oak, Birmingham, England as the UK Housing Market continues to fluctuate. Credit: Stop Press Media/Alamy Live News (Stop Press Media)
The latest research by London lettings and estate agent, Benham and Reeves, has shown that rental stock availability is up 12% year on year across England. London saw the largest boost to the number of homes available to prospective tenants.
Here are some of the key findings:
There were 154,510 rental properties available to tenants across England in Q1 of this year, marking a 12.1% increase versus Q1 2023.
Some 33 of the nation’s 48 counties have seen an improvement in the volume of homes reaching the market for potential tenants.
London saw the biggest boost to the level of rental stock currently available, with the City of London having an annual increase of 44.3%, while Greater London had a 34.7% jump.
Outside of the capital, Nottinghamshire was home to the largest increase in rental market listings, having seen a 28.2% increase versus the same period last year.
Other areas to rank within the top 10 include Northamptonshire (+19.5%), Berkshire (+18.8%), Dorset (+16.5%), Warwickshire (+15.6%), Bristol (+14%), Derbyshire (+13.2%) and Bedfordshire (+13.1%).
However, in Leicestershire, rental market stock levels have dropped by -17.3% annually, whilst the West Midlands (-11.4%) and Cheshire (-9.7%) have also seen some of the largest reductions.
LaToya Harding
Mortgage approvals hit highest level in 18 months
The number of mortgages approved to buyers last month came in at the highest since September 2022.
According to the latest figures from the Bank of England (BoE), mortgage approvals for house purchases rose from 60,500 in February to 61,300 in March.
Meanwhile, approvals for remortgaging decreased from 37,700 to 34,200 over the same period.
The “effective” interest rate, which is the actual interest paid, on newly-drawn mortgages decreased to 4.73% in March, it said.
LaToya Harding
German economy expands
The German economy expanded between January and March, avoiding a recession after a weak end to last year.
Official figures from federal statistics agency Destatis showed that output rose by 0.2% in the first quarter of 2024, compared to the previous three months in Europe’s biggest economy.
A mixed GDP release from Germany this morning. The 0.2% growth in Q1 is welcome. But Q4 was revised down by 0.2% to -0.5%. So we are in fact back where we started......
Lidl has announced plans to open hundreds of new stores across the UK, following a year of significant investment in its infrastructure, including the opening of its largest global warehouse in Luton.
The German discounter said it will create thousands of new jobs under its expansion proposals.
Stores opening across the country in coming months include Bristol, Birmingham and Berwick, along with Wandsworth, Fulham and Canning Town in London alone.
This year marks 30 years since the opening of Lidl first store, as it celebrates a record high market share of 8%.
Lidl GB chief development officer Richard Taylor said:
Having fortified our infrastructure with significant investments like Luton, which is the largest warehouse in the Lidl world, we’re proud to have achieved record market share this month.
We have also been the fastest growing bricks and mortar supermarket for the past seven months in a row.With an exceptional store network and our laser focus on operational excellence, we’re welcoming more customers through our doors than ever before, which positions us perfectly for continued expansion.
LaToya Harding
Premier Inn owner Whitbread to axe 1,500 jobs
File photo dated 3/4/22 of a Premier Inn in London. Premier Inn and Beefeater owner Whitbread, is set to reveal a rise in revenues and profits for the past year as investors will be keen for a positive outlook for hospitality spending, when it unveils its latest annual results in an update on April 30. Issue date: Sunday April 28, 2024. (Mike Egerton, PA Images)
Premier Inn owner Whitbread is set to cut 1,500 jobs as it closes restaurants and expands its hotel business.
It is looking to cut the number of branded restaurants, which includes the likes of Brewers Fayre and Beefeater, by more than 200 in a bid to build more hotel rooms.
Whitbread said the sale of 21 restaurants has already been agreed. The changes will add more than 3,500 hotel rooms across its estate.
Dominic Paul, Whitbread chief executive, said:
"We recognise that our transition will impact some of our team members so we will be providing support throughout this process and we are committed to working hard to enable as many as possible of those affected to remain with us."
Whitbread said it would try to find "alternative opportunities" for affected staff "wherever possible" through new jobs created by its plans and through existing recruitment.
The firm employs 37,000 people across Britain.
It comes as Whitbread announced an adjusted pre-tax profit of £561m for the year to March, an improvement on its £413m profit the previous year.
LaToya Harding
French economy grows 0.2%
France’s economic growth accelerated by 0.2% in the first quarter of this year, beating expectations. This was a pick-up on the 0.1% growth recorded in October to December.
Economists had only expected growth of 0.1%.
According to statistics body INSE, household spending helped drive the economy, with final domestic demand bouncing back and contributing 0.4 percentage points to growth.
The decrease was partly due to a slowdown in the price rises of food (1.2%) and tobacco (9%), and also to a slight drop (-0.1%) in the cost of manufactured goods.
However, energy inflation rose to 3.8% from 3.4% in March, while services inflation stuck at 3%.
Meanwhile, foreign trade’s contribution to GDP growth fell to zero, with imports rising by 0.2% and exports up by 0.5%.
After announcing his decision to retire, HSBC chief executive Noel Quinn said:
I never imagined when I started 37 years ago that I would have the honour of becoming group chief executive of this great bank.
I am proud of what we have achieved, and it has only been possible because of the talent, dedication, and commitment of the people at HSBC.
After an intense five years, it is now the right time for me to get a better balance between my personal and business life. I intend to pursue a portfolio career going forward.
LaToya Harding
HSBC beats estimates and announces buyback
HSBC's (HSBA.L) results for the first quarter of 2024 came with a surprise as its CEO Noel Quinn announced early retirement after a five-year stint leading the bank. The lender has begun the hunt for his replacement.
The news came as it reported a pre-tax profit of $12.7bn (£10.1bn) — above analysts' forecasts of $12.6bn and slightly less than the $12.9bn for the same quarter a year ago.
The bank has grappled with rising costs across Asia, high inflation and what it called "investment in technology".
Profit before tax included a $4.8bn gain on the sale of its Canada business and a $1.1bn impairment relating to the planned sale of its Argentina business.
HSBC announced it will buyback $3bn worth of shares, bringing the total buybacks for shareholders to $8.8bn. It will also pay out a $0.10 per share dividend.
The bank's 2024 guidance remains unchanged, it added.
LaToya Harding
Asia and US stocks
Stocks in Asia were mostly higher overnight with the Nikkei (^N225) rising 1.2% on the day in Tokyo, playing catch-up after a Japanese holiday on Monday.
The Hang Seng (^HSI) climbed 0.2% in Hong Kong for a seventh successive day, but the Shanghai Composite (000001.SS) was 0.3% down by the end of the session.
It came amid news that China’s factory activity in April grew more than expected.
Across the pond on Wall Street, the S&P 500 (^GSPC) rose 0.3% to 5,116.17, and the Dow Jones Industrial Average (^DJI) added 0.4% to 38,386.09. The Nasdaq Composite (^IXIC) gained 0.3% to 15,983.08.
In the bond market, the yield on the 10-year Treasury dropped to 4.61% from 4.67% late on Friday.
LaToya Harding
Coming up...
Good morning and welcome back to our markets live blog. As always, be sure to follow along to stay updated with what's moving markets and happening across the global economy.
Here's a quick look at what's on the agenda for today:
Tavia Hunt quoted the Bible while defending Butker's commencement speech, in which he called diversity initiatives a "tyranny" and urged women to stay home.
NEW YORK, May 17, 2024--KBRA assigns preliminary ratings to seven classes of mortgage-backed notes from OBX 2024-NQM8 Trust, a $723.1 million non-prime RMBS transaction. The underlying collateral, comprising 1,421 residential mortgages, is characterized by a notable concentration of alternative income documentation (91.3%) loans. Most of the loans are classified as non-qualified mortgages (Non-QM) (51.2%) or exempt (48.5%) from the Ability-to-Repay/Qualified Mortgage (ATR/QM) rule due to being o
Federal wildlife officials declared a rare lizard in southeastern New Mexico and West Texas an endangered species Friday, citing future energy development, sand mining and climate change as the biggest threats to its survival in one of the world’s most lucrative oil and natural gas basins. “We have determined that the dunes sagebrush lizard is in danger of extinction throughout all of its range,” the U.S. Fish and Wildlife Service said.
Maricopa Country Sheriff's OfficeFormer Donald Trump attorney John Eastman, who’s been called the “architect” of Trump’s attempts to subvert the 2o20 election results, pleaded not guilty to conspiracy and fraud charges in Arizona on Friday.Eastman’s arraignment was followed by the release of his mugshot, in which he stared blankly forward while wearing a navy suit and tie. Eastman faces charges along with 17 other defendants in the Arizona case, all of whom were indicted on charges related to an
CALGARY, Alberta, May 17, 2024--Sensible Meats Inc. (CBOE CA: HOTD) (FSE: OX4) ("Sensible" or the "Company"), a pioneer in plant-based meat alternatives, announces updates regarding its corporate leadership team and board of directors.
Nvidia is the biggest name to report, but a slew of other players are near buy points with earnings due. Fed commentary could be key to the week's stock market action.
MONTREAL, May 17, 2024 (GLOBE NEWSWIRE) -- IntelGenx Technologies Corp. (the “Company” or “IntelGenx”) (OCTQB: IGXT; TSX: IGX), a leading drug delivery company focused on the development and manufacturing of pharmaceutical films, announced today that the Québec Superior Court (Commercial Division) (the “Court”) has issued an initial order (the “Initial Order”) granting the Company and its subsidiaries protection under the Companies’ Creditors Arrangement Act (R.S.C., 1985, c. C-36) (the “CCAA”).
A man who attacked an Asian American student near the University of Cincinnati (UC) in 2021 is now free after being sentenced to time served this week. Darrin Johnson, 27, yelled racial slurs and punched the student inside the UC campus on Aug. 17, 2021. Johnson pleaded guilty to a hate crime charge and received time served as part of his plea deal.
Yahoo Sports runs through the series of events that saw the world's top golfer arrested while trying to enter Valhalla Golf Club on the second day of the PGA Championship.
Hard to believe it has been 44 years since Paul Schrader and star Richard Gere last worked together on 1980’s seminal American Gigolo, a film that became not just a keystone in Gere’s celebrated career but also one for one Schrader’s as one of his earliest directorial credits. Of course he has written some of …
Yahoo Finance 