LaToya Harding
FTSE 100: Wall Street mixed and Europe higher as traders look ahead to US inflation
LaToya Harding
·Business Reporter, Yahoo Finance UK
Updated
The FTSE 100 (^FTSE) underperformed against European stocks on Wednesday, struggling for much direction as investors eyed a key US inflation reading later in the week. Wall Street opened mixed later in the day with the blue-chip Dow (^DJI) leading gains in thin trading.
It comes ahead of crucial economic data, commentary from the Federal Reserve's policymakers and as we continue to draw closer to the Easter holiday, meaning a shortened trading week, which coincides with the end of the first quarter.
London’s benchmark index was just 0.1% higher by the end of the session
Germany's DAX (^GDAXI) rose 0.5% and the CAC (^FCHI) in Paris was 0.2% up
The pan-European STOXX 600 (^STOXX) advanced almost 0.1%
Wall Street opened mixed after an artificial intelligence-fuelled rally helped US stocks reach record highs recently
The pound (GBPUSD=X) was trading flat against the dollar, down just 0.1%
The Bank of England says UK is coping with higher interest rates
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Jim Reid at Deutsche Bank said: "It remained quiet in markets yesterday other than for a sizeable late sell-off in US equities which came a bit out of the blue. Markets have been a bit thin this week so that might have contributed."
Follow along for live updates throughout the day:
LIVE COVERAGE IS OVER22 updates
Blog close and recap
Well that's all folks, thanks for following along as always.
Here's a quick recap of some of the top stories from today:
BoE: UK is coping with higher interest rates
Japanese yen hits 34-year low
German economy will barely grow this year
UK businesses cut hiring and pay plans
H&M beats profit forecasts
Inflation rises in Spain
AI risks wiping up to 8 million jobs in the UK
Have a good evening! See you again tomorrow.
- LaToya Harding
What is a spot bitcoin ETF and why it has sparked a crypto rally?
Since the approval of multiple spot bitcoin exchange-traded funds (ETFs) by the US Securities and Exchange Commission (SEC) in January, the price of bitcoin has followed a mostly steady upward trajectory.
On 14 March, bitcoin hit a record high of $73,580, according to CoinGecko data, its price bolstered by increased inflows from fund managers such as BlackRock (BLK) and Franklin Templeton (BEN), via spot bitcoin ETFs.
Read more: Crypto live prices
But what exactly are spot bitcoin ETFs, and why have they caused such a surge in the price of the world's largest digital asset by market capitalisation?
- LaToya Harding
Rail workers announce strikes
CrossCountry rail workers are set to strike in a dispute over union recognition.
The Rail, Maritime and Transport union (RMT) said around 800 of its members would walk out on Saturday 13 April.
The RMT said it had been excluded from talks on pay and policy issues.
Mick Lynch, RMT general secretary, said on Wednesday:
CrossCountry’s refusal to guarantee our representation of members in negotiations is a disgrace and will not be tolerated.
Bosses cannot dictate who RMT members are represented by or be allowed to rip up long-standing agreements.
Therefore, our whole membership in CrossCountry will take strike action on April 13 and our industrial campaign will continue until we reach a resolution.
- LaToya Harding
Morrisons sales growth hits three-year high
Morrisons has said it is embracing the start of its next chapter as sales growth hit the highest level in three years.
The company revealed that sales rose 4.6% in the three months to 28 January, up from 3.3% the month before, and a bounce back from falling sales in 2022.
However, the figures include a period of high inflation when food prices were rising by more than 6%, according to the British Retail Consortium (BRC).
Rami Baitiéh, boss of the UK’s fifth largest supermarket, said customer complaints were down almost 60% in the past five months as it improved availability and innovation on products and cut waste.
It also begun matching key product prices with German discounters Aldi and Lidl since February, as well as stepping up deals with franchise partners to open three convenience stores a week.
He said:
In January I outlined our plan to reinvigorate, refresh and strengthen Morrisons as we started our next chapter. Those plans are now in full swing.
Across the business we have identified many areas where we can raise our game and make small improvements which collectively will result in a significantly enhanced shopping experience for our customers.
- LaToya Harding
BoE: UK is coping with higher interest rates
UK households have stayed resilient in the face of high interest rates but some businesses are likely to struggle with higher borrowing costs, according to the Bank of England.
The BoE has left interest rates unchanged at a 16-year high of 5.25% for the fifth time in a row.
"So far UK borrowers have been resilient to the impact of higher interest rates," the BoE's Financial Policy Committee said in a quarterly update.
The figures showed a rising trend of mortgages with 30-year terms – which now accounted for almost half (40%) of new mortgages, as buyers spread their home loans over a longer period to be able to make bills more affordable.
The BoE said this has made the loans more affordable for many borrowers, but it could also affect future borrower and lender resilience if people are more at risk of defaulting on their repayments.
About 45% of fixed-rate mortgage holders are still facing higher monthly repayments when they reprice their mortgage by the end of 2026.
The level of mortgage arrears had increased slightly and is expected to rise further, but remains low by historical standards.
UK businesses have also managed to cope with higher interest rates but the central bank warned that small businesses will struggle.
- LaToya Harding
Software industry calls for more UK government support
The UK government has been urged to provide more support for the software industry with measures including tax incentives and talent visas.
More than 120 industry leaders have called for government intervention to improve conditions for European software companies.
A spokesperson for the Department of Science and Technology said it had unlocked billions of pounds to help fund high growth firms, and encouraged British investors to back the country's most promising scale-ups.
"We do not agree with this assessment. Our tech sector is booming and outpacing European competitors at every turn. We consistently lead the continent, ahead of both France and Germany combined," the spokesperson told Reuters.
- LaToya Harding
Cocoa prices fall from record highs
Cocoa prices have slipped today as investors banked profits after a rally that took prices above $10,000 a tonne.
The most-active contract fell as much as 3.7%, following Tuesday’s retreat from an all-time high of $10,080.
Prices have more than doubled this year as poor crops in key West African growers put the world on course for a third consecutive year in which there is a deficit of supply.
Analysts at The Hightower said:
“With three sessions left before quarter-end and a holiday weekend, cocoa fell victim to a wave of profit-taking late in the day.”
- LaToya Harding
Trump Media & Technology Group
Shares in former US president Donald Trump's media firm (DJT) have soared on their stock market debut in New York and are currently the most trending stocks in after-hours trading.
Shares surged past $70 (£55.42) in early trade, giving the firm a market value of more than $9bn. They ended the day at about $58, still up more than 16%.
Trump Media & Technology Group, the company behind his Truth Social platform, is now listed on the Nasdaq stock exchange under the ticker symbol DJT – Trump’s initials – after completing its merger with blank-cheque company Digital World Acquisition Corp on Monday.
Trump, owner of 58%of the shares in the merged company before accounting for dilution, is the biggest beneficiary of the price surge. However, Trump is barred by terms of the merger from selling his shares for six months.
Analysts suggested that investors were mostly supporters of Trump ahead of the looming presidential election rather than institutions and that it was the most trending stock on US exchanges.
- LaToya Harding
German economy will barely grow this year
The German economy will barely grow this year, according to one of the country’s leading economic institute.
Its forecast came in at GDP growth of 0.1% in 2024, from 1.3%, as high interest rates, weak global demand and political uncertainty dent hopes for a stronger recovery.
For next year, they are expecting growth of 1.4% rather than 1.5%.
Stefan Kooths, head of economic research at the Kiel Institute for the World Economy, said:
Although a recovery is likely to set in from the spring, the overall momentum will not be too strong.
There have recently been more headwinds than tailwinds in the domestic and foreign economies.
- LaToya Harding
Renting now cheaper than owning
First-time buyers might be better holding off as renting can be up to over £2,000 per annum cheaper in certain parts of the UK amid high mortgage costs.
Renters are making the biggest savings compared to first-time buyers in the East of England, where they are an average £2,325 better off each year, according to the Halifax Owning vs Renting Review.
Prospective homeowners are being hit by higher mortgage rates and a lack of homes available in the market, which is driving up prices.
Renting in the South East (£1,859), East Midlands (£1,741) and Yorkshire & the Humber (£1,731) also saw significant yearly savings when compared to owning a first home.
The South West, London and Scotland now the only regions where owning a first home is cheaper than renting. The largest annual savings are in the South West, where the owners are £1,663 better off.
- LaToya Harding
DS Smith shares rise after new takeover offer
DS Smith (SMDS.L) surged almost 9% after it confirmed talks with US rival International Paper Co. (IP), opening the doors to a possible bidding war for the UK packaging company.
US-based International Paper’s all-share proposition for DS Smith is equivalent to 415p per share, which would value the company at roughly £6.8bn including debt.
DS Smith recently agreed to be taken over by Mondi (MNDI.L), in a deal that implied a value of 373p per share, or closer to a £6.2bn enterprise value.
DS Smith said:
"The board acknowledges the strategic merits and potential for value creation through a combination with International Paper."
"Accordingly, the board is progressing its discussions with International Paper regarding the proposal."
International Paper said in a statement that a merger would create a new global leader in sustainable packing that would be well positioned in growing markets.
- LaToya Harding
H&M beats profit forecasts
H&M has beaten profit expectations with shares in the Swedish fashion firm climbing as much as 13% on the day.
The group posted an operating profit of 2.08bn krona (£160m) in the first quarter, up from 725m krona a year ago and above the 1.43bn krona forecast by analysts.
It said its spring collections were well received and that sales showed signs of recovery.
Sales fell 2% in the first quarter, less than analysts expected, while sales at the start of the second quarter increased by 2%.
Boss Daniel Erver, who has been in the job for two months, said:
The quarter’s sales gradually improved during February with well-received spring collections, which is a positive sign that we are on the right track. Our top priority is to strengthen sales.
Robyn Duffy, senior analyst at RSM UK, said:
“With new chief executive Daniel Erver focused on profitability and improving margin, we’ve seen gains in these areas which should go some way to reassuring investors.”
- LaToya Harding
Oil prices fall
Brent oil prices edged down early on Wednesday, for the second day in a row, as supply-side developments tempered upward momentum for the barrel's price.
Ricardo Evangelista, senior Analyst at ActivTrades, said:
"The release of data indicating a notable rise in US crude stockpiles alleviated some of the pressure that had driven prices to their highest level since October last week. Concurrently, traders are increasingly sceptical that OPEC+ nations will introduce substantial output adjustments at their upcoming meeting."
"Given this context, it wouldn't be surprising if the barrel's price continued to trade within a relatively narrow range, encountering significant resistance around $88, with downside risks limited by geopolitical uncertainties and expectations of economic activity expansion in the second half of the year."
- LaToya Harding
Inflation rises in Spain
Spanish inflation accelerated in March thanks to higher energy costs, preliminary data from national statistics office INE showed.
Consumer prices rose 3.2% from 2.8% in February, with the main factor pushing up inflation being a rise in the price of electricity and fuel.
This offset slower growth in food and non-alcoholic drink prices.
Inflation in the country reached a record 10.8% in July 2022, its highest since 1985 as Russia’s invasion of Ukraine sent consumer prices soaring, however, it has ease since.
Adrian Prettejohn, Europe economist at Capital Economics, said:
We think it is likely to increase further over the coming months due to base effects in energy inflation, higher VAT rates on energy and foods, and services firms hiking prices.
Meanwhile, the tightness of the labour market suggests that inflation could stay above 2over the next couple of years.
Inflation Rate in Spain increased to 3.20 percent in March from 2.80 percent in February of 2024.https://t.co/dY6uE6T2Bo pic.twitter.com/Xzl2cakDrz
— TRADING ECONOMICS (@tEconomics) March 27, 2024
- LaToya Harding
UK businesses cut hiring and pay plans
British businesses trimmed their plans for staffing and wage increases this month, according to Lloyds Bank Business Barometer.
published on Wednesday that suggested April's big increase in the minimum wage is weighing on employers.
The gap between firms planning to hire and those planning cuts fell to 27% from February's almost two-year high of 36%. The series' long-term average is 22%.
The share of firms expecting to increase wages by 3% or more over the next 12 months fell slightly to 33% from 35%.
Hann-Ju Ho, a senior economist at Lloyds Bank Commercial Banking, said:
"It's possible the impending minimum wage rises in April are beginning to come into sharper focus for businesses – especially smaller firms."
The survey showed that overall business confidence held at a net 42%.
- LaToya Harding
Travis Perkins boss to step down
Nick Roberts, Travis Perkins' chief executive is set to step down from the helm after five years.
Britain’s biggest supplier of building material said that he has agreed to remain in the role until a successor is identified.
His departure comes just weeks after the firm flagged another year of challenging demand after a 39pc drop in its 2023 profit.
Earlier this month, the company said it was reviewing some of its consumer-facing Toolstation businesses in Europe.
- LaToya Harding
AI risks wiping up to 8 million jobs in the UK
Secretarial, customer service and administrative roles are at the highest risk of being replaced by artificial intelligence, as AI threatens to wipe out up to 8 million jobs in the UK.
Back-office, entry level and part time jobs are the most likely to see workers replaced by AI, according to a report by the Institute for Public Policy Research (IPPR).
Women are more likely to be in such jobs, which means they will be among the most affected, the think-tank warned. Young people are also at high risk as firms hire fewer people for entry-level jobs and introduce AI technologies instead.
Bhargav Srinivasa Desikan, senior research fellow at the IPPR, said:
“We could see jobs such as copywriters, graphic designers and personal assistants roles being heavily affected by AI.
“The question is how we can steer technological change in a way that allows for novel job opportunities, increased productivity and economic benefits for all."
IPPR analysis of 22,000 tasks in the UK economy, covering every type of job, found that about one in 10 (11%) of tasks done by workers are already exposed to in the first wave of generative AI adoption, which is here and now.
However, this could increase to AI doing more than half (59%) of the tasks in the second wave. This would affect increasingly higher earning jobs.
- LaToya Harding
Air up: Scent based technology helping you drink more water
The UK soft drinks market is worth over £18bn and is dominated by sugar-filled fizzy drinks and diet versions using artificial flavours and sweeteners.
Air up is aiming to change this with a more interesting way to drink water; their smart water bottles use retronasal smell to give a great-tasting drink without any additives or changes to your water.
Since 2019 launch, the group has sold over 5 million water bottles across Europe
In the UK alone, air up has grown 800% from 2021 to 2022
Reached an excess of €159m revenue run rate, increased by 75% since 2021
Raised more than €60m over two funding rounds, led by Five Seasons Ventures
Saved up to 130 million single-use plastic bottles and more than 2600 tonnes of sugar
- LaToya Harding
Average monthly rent up 46% in the last decade
The latest research by Zero Deposit has revealed how surging demand for rental homes has caused the average rent to spiral in recent years, with UK tenants now paying 46% more per month than they were a decade ago.
The average cost of a rental deposit has increased for the first time since the introduction of the The Tenant Fees Act 2019 in June 2019.
Zero Deposit analysed rental market data, looking at the number of renters across the UK, average cost of renting, the increase in the number of tenancy deposits held for UK tenants and the total value of these deposits.
The research showed that:
The current rental market is buckling under the pressure of high demand from tenants.
The figures show that there are currently over 5m deposits held across the UK, a 66% increase on the 3m held a decade ago. This number has climbed by 5% in the last year alone, having also increased by 5.5% between 2022 and 2021, the highest rates of annual growth seen since 2017.
The latest figures on the supply of private rental sector stock shows that in 2023, there were an estimated 5.22m rental homes across the UK, an annual reduction of -0.3% and down 3.1% versus the peak of 5.38m private rental homes seen in 2017.
- LaToya Harding
Japanese yen hits 34-year low
The Japanese yen hit a 34-year low against the dollar, prompting some soft intervention from the authorities, just over a week after the Bank of Japan announced an interest rate hike in a shift away from years of ultra-loose monetary policy.
The currency fell to 151.97 against the US dollar, its softest since 1990, but Tokyo stocks ended higher with investors seeking to secure dividend rights as the current financial year draws to a close.
Neil Wilson at Finalto.com said:
"Finance minister Suzuki said the government would take "decisive action" on unwanted currency volatility, but declined to comment on whether this meant actual intervention.
"After hitting its highest since 1990, USDJPY slackened a bit overnight on the comments but has not budged much and the market will need more. Usually in these situations the market will test how far Tokyo is prepared to let it go. Rate differentials are what matters – the Fed was expected to cut more, and the Bank of Japan was probably expected to a little more than they have offered up so far. The carry trade is not quite dead yet."
- LaToya Harding
Asia and US stocks
Asian shares were mixed overnight after Wall Street slipped from its record highs.
The Nikkei (^N225) rose 0.9% on the day in Japan, as the yen hit at 34-year low against the dollar, while the Hang Seng (^HSI) fell 1.4% in Hong Kong.
The Shanghai Composite (000001.SS) was 1.3% down by the end of the session despite China’s central bank governor telling a high-level business conference in Beijing that the ailing property industry was showing signs of recovery.
Across the pond, US stocks fell with the the S&P 500 (^GSPC) down 0.3% to 5,203.58 for its third straight modest drop since setting an all-time high.
The Dow Jones Industrial Average (^DJI) dipped 0.1% to 39,282.33, and the tech-heavy Nasdaq composite (^IXIC) fell 0.4% to 16,315.70.
- LaToya Harding
Coming up...
Good morning, and welcome to our live markets blog. Here we will be covering all things happening across the global economy, and take a deep dive into what's moving markets.
Here's what's on the agenda for today:
7am: Trading updates: H&M, Endeavour Mining, S4 Capital
8.30am: Sweden’s Riksbank interest rate decision
10.30am: Bank of England financial policy committee releases its March summary and report on risks to financial stability
11am: US MBA Mortgage applications for week of 22 March
2.30pm: US Crude Oil Inventories
Watch: How does inflation affect interest rates?
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