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Global stocks mixed amid revived hopes for US rate cuts

Lucy Harley-McKeown
Updated
Grapevine, Texas, USA - March 19, 2022: GameStop headquarters in Grapevine, Texas, USA. GameStop Corp. is an American video game, consumer electronics, and gaming merchandise retailer.
The FTSE 100, European and US indexes started the first trading day of June off on a positive note on Monday, as memestock Gamestop surged and hopes for earlier interest rate cuts percolated. (JHVEPhoto via Getty Images)

European and US indices started the first trading day of June off on a positive note on Monday, as memestock Gamestop surged and hopes for earlier interest rate cuts percolated. Meanwhile, the FTSE 100 dipped.

  • By the closing bell on Monday, the FTSE (^FTSE) was trading 0.1% lower, while the DAX (^GDAXI) in Germany rose 0.6% and France's CAC (^FCHI) was up 0.2%.

  • The pan-European STOXX 600 (^STOXX) was 0.3% in the green.

  • Across the pond, contracts on the tech-heavy Nasdaq 100 (^IXIC) gained 0.4% as Nvidia (NVDA) shares popped on the heels of an AI chip update. Dow Jones Industrial Average futures (^DJI) lagged slightly, diving 0.6% lower, and the S&P 500 (^GSPC) was down 0.1%.

  • A surge in GameStop (GME) shares grabbed the spotlight, firing up speculation again of a return to a 2021-style meme rally. The stock skyrocketed over 100% at one point in pre-market trading after a Reddit post apparently by Keith Gill — AKA "Roaring Kitty" — showed a big bet by influential trader. Fellow meme darling AMC's (AMC) shares shot up over 20% alongside the move.

  • Last week's inflation reading in the US has increased bets for an interest rate cut decision after the Federal Reserve's September meeting, if all data continues to point in the right direction. The core personal consumer expenditure deflator, has came in at 0.2% month-on-month — the consensus had been swinging between 0.2% and 0.3% all week largely because based on the inputs from the PPI and CPI reports, the general sense was that it would come in at somewhere between 0.22 and 0.28% to two decimal places, according to analysts at ING.

  • The moves also follow a report by Sky News which suggests Chinese fast fashion giant Shein will file for a London listing some time in June. The float could value it at around £50bn and would be one of the most significant City floats in more than a decade if it goes ahead.

Follow along for live updates:

LIVE COVERAGE IS OVER18 updates
  • Lucy Harley-McKeown

    Thanks for reading

    That's all from us at Yahoo Finance UK! Head over to our US site for more market moving news.

  • Lucy Harley-McKeown

    A miss for US May manufacturing data

  • Lucy Harley-McKeown

    Pound holds up under pressure

    Commentary from Matthew Ryan, head of market strategy at Ebury:

    Sterling is holding up surprisingly well in spite of the election announcement, some tentative signs of cooling in the services sector in the latest PMIs, and fragility in consumer spending in the most recent retail sales report.

    Indeed, the pound continues to comfortably outperform the euro in the past month, as markets view a Labour majority as perhaps the most market-friendly outcome of the pending general election - a reflection of both the lingering damage done by Liz Truss’ ill-fated budget, and a shift towards the political centre under Keir Starmer’s leadership.

    Data this week is quite light, dominated by surveys rather than hard numbers. The Monetary Policy Committee of the Bank of England has suspended all communications except the actual June meeting in view of the 4th July election.

    This means there will be little idiosyncratic factors to guide the pound in markets and it will largely trade off events elsewhere.

  • Lucy Harley-McKeown

    US stocks at the open

    Here's how stocks are faring at market open:

  • Lucy Harley-McKeown

    Gas prices surge as crack in Norwegian pipeline frustrates supply

    Gas prices have hit their highest point this year following news of the closure of a pipeline between Norway and the UK.

    The closure is down to a crack found by supplier Gassco, which said the two inch pipeline aboad Norway’s offshore Sleipner Riser platform had ruptured.

    UK prices are up 11.7% to 93.25p per therm, while gas for delivery next month to the UK has jumped 13% to 92.3p. Both contracts are the highest since December 2023.

    It's not known how long the crack will take to be repaired.

  • Lucy Harley-McKeown

    Trending tickers: Saudi Aramco

    Saudi Aramco’s executives are expected to hold a series of events in the UK and US as they seek to drive up interest for a $12bn share sale.

    Saudi Arabia’s state-owned oil giant axed an international roadshow for its $29.4bn initial public offering five years ago after overseas investors casted doubts at its valuation expectations, leaving the government reliant on local buyers.

    However, its secondary listing plans were oversubscribed within hours of the deal opening on Sunday.

    As a result, the Aramco is planning events to attract investors in London this week, at least one of which will be attended by chief executive Amin Nasser, according to Bloomberg News.

    The Saudi government owns about 82% of Aramco, while the kingdom’s wealth fund holds a further 16% stake.

    Read more here.

  • Lucy Harley-McKeown

    World highlights from DB's report

    They say:

    After a big lift in January, our US economists’ growth forecasts remain at the higher end of consensus for the next two years (2.4% in 2024, 2.2% in 2025) but with the election a risk to the base case.

    Our economists are upgrading euro area 2024 growth by half a percent to 0.9% but this is more cyclical than structural with 2025 forecasts remaining unchanged at 1.5%.

    In China our economists upgraded 2024 growth to 5.2% in April, supported by ongoing export growth and accelerating fiscal spending. Beyond that, growth will likely slow to 4.5% in 2025 with the housing market facing downward price pressures from an excess supply of homes.

    In Japan our economists are more hawkish on rates, believing that the BoJ will hike to 1% by Q1 2026.

    India remains a beacon of growth with a minimum of 6-6.5% real GDP growth and 10-11% nominal growth over the next several years.

  • Lucy Harley-McKeown

    What's holding back UK growth?

    According to DB:

    Passive tightening in monetary and fiscal policy. On both fronts, particularly on the monetary policy front, economic conditions are expected to tighten this year and next. Near 25% of mortgage holders are due to refinance onto higher rates in the coming quarters. And despite expectations of more fiscal easing, given elevated rate expectations we expect fiscal policy to remain tight for the foreseeable future — particularly with debt servicing costs expected to be a little more elevated than the Office for Budget Responsibility (OBR) assumed in the Spring budget.

    Labour market conditions are also expected to deteriorate marginally over the coming months. We expect slower demand and rising labour supply to push the jobless rate higher to upwards of 4.5% by the middle of the year. This will, on the margins, weigh on overall household consumption.

  • Lucy Harley-McKeown

    Deutsche Bank: "Cyclical recovery underway" for UK

    The UK-focused section of Deutsche Bank's latest World Outlook report makes a case for an economic revival. It said:

    The UK economy is turning a corner. A cyclical recovery is underway. A firming in real disposable incomes will likely give way to firming household consumption. An early election will give way to more fiscal certainty with some fiscal easing inevitable following the general election.

    Broadly speaking, we've left our projections unchanged since our last update, with GDP expected to expand by 0.8% this year before rising to around 1.5% in the next two years.

    With unemployment picking up, wage growth slowing, and inflation dropping back to near target consistent levels over the next year, we expect a slightly more gradual dialling back of restrictive monetary policy.

  • Lucy Harley-McKeown

    Trending tickers

    Yahoo Finance UK reporter Pedro Goncalves has our trending tickers for the day. Read more here.

  • Lucy Harley-McKeown

    Blackstone finetunes Hipgnosis deal

    Blackstone (BX) has announced plans to sweeten its offer for Hipgnosis as part of a restructured bid for the music rights owner designed to make completing the deal easier.

    On Monday, the US private equity firm said it had revised its offer price after discussions with the Hipgnosis board.

    It has risen by one US cent per share, valuing Hipgnosis at about $1.58bn (£1.27bn), an almost 50% premium on the closing price of Hipgnosis shares before an offer was made.

    The two businesses had previously agreed to a deal that will see Hipgnosis taken off the public markets.

    However, the process had been complicated by tensions between the London-listed fund and its founder Merck Mercuriadis, who runs advisory firm Hipgnosis Songs Management (HSM).

  • Lucy Harley-McKeown

    McKinsey's view on the PMI

    Boudewijn Driedonks, partner at McKinsey & Company said:

    Overall, today’s PMI figures signal that economic growth is charting in the right direction. Despite lingering fragilities, there has been a marked pick-up in activity as firms report stronger demand and prices seem to be stabilising. With conditions starting to improve, many manufacturers will likely be entering the second half of the year with cautious optimism.

  • Lucy Harley-McKeown

    UK manufacturing in growth

    The UK's PMI for May shows:

    • Output rose across all main sub-sectors and size categories

    • Business optimism sprung to 27-month high

    Rob Dobson, Director at S&P Global Market Intelligence, said:

    May saw a solid revival of activity in the UK manufacturing sector, with levels of production and new business both rising at the quickest rates since early-2022.

    The breadth of the recovery was also a positive, with concurrent output and new order growth registered for all of the main subindustries (consumer, intermediate and investment goods) and all company size categories for the first time in over two years.

    While the latest upturn was dependent on a strengthening domestic market, there were signs of overseas demand also moving closer to stabilisation. Business optimism rose in tandem with the improvement in current conditions, with 63% of manufacturers forecasting their output to be higher one year from now.

    The latest PMI survey data provided a mixed picture for price pressures at manufacturers, however. At the factory gate, output charge inflation strengthened for the fifth successive month and to its highest level in a year. That said, a solid easing in the rate of increase in input costs should help prevent price pressures from becoming embedded.

  • Lucy Harley-McKeown

    US stocks in premarket

    After an upbeat close last week, here's what US stock futures are doing:

  • Lucy Harley-McKeown

    GSK shares drop

    Pharma giant GSK's (GSK.L) shares are currently down around 9.5% in London, having dropped as much as 9.8% earlier this morning as investors weigh risk to the company from litigation over a heartburn drug.

    GSK, alongside other companies like Pfizer (PFE), faces a trial in Delaware over Zantac. A judge said evidence which backs up claims that the drug causes cancer can be presented to a jury, with a 75,000-strong class action having been filed.

  • Lucy Harley-McKeown

    Overnight in Asia

    It was positive news for Asian shares on Monday, which ticked up ahead of a slated rate cut in Europe. Chinese shares were also supported by the private Caixin survey, which showed an uptick in its main factory index to a two-year top of 51.7 in May, from 51.4 in April.

    Japan's Nikkei (^N225) closed 1.1% higher, while the Hang Seng in Hong Kong (^HSI) was up 2%. The Kospi (^KS11) also rose 1.7% in the session.

  • Lucy Harley-McKeown

    US stocks on Friday

    Catching up from last week:

    US stocks wrapped the last trading day of the month on a high note, notching the sixth positive month in the last seven for all three major indexes.

    The blue-chip Dow Jones Industrial Average (^DJI) rose 1.5%, or about 575 points, shaking off two days of sharp losses. The S&P 500 (^GSPC) rose 0.8%, while the tech-heavy Nasdaq Composite (^IXIC) overcame earlier losses and finished just below the flatline.

    The major indexes all broke records for the month. The S&P and Nasdaq posted their best May performances since 2003. And the Dow saw its best May since 2020.

    While investors won out on the month, the trading day showed signs of investors taking a breather. Shareholders in Nvidia (NVDA), the AI darling, took an exhale after the company's stock price rose above $1,100. Shares fell around 0.8% Friday as investors took profits on the chip producer as well as other tech giants.

  • Lucy Harley-McKeown

    Good morning!

    Hello from London! It's finally June, and an interesting week in prospect. No major reports to look to today, apart from the ISM Manufacturing PMI data in the US which is set for around 3pm.

    The rest of the week looks like this:

    Tuesday

    — German unemployment data

    — US JOLTS data

    Wednesday

    — China services PMI

    — US ADP employment report

    Thursday

    — UK construction PMI

    — ECB rate decision

    — US unemployment data

    Friday

    — US non-farm payrolls

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