The FTSE and Wall Street were higher after Google posted $80.5bn in revenue for the first quarter of 2024 and reported $1.89 in earnings per share, up from $1.17 – beating analysts’ expectations. (Michael M. Santiago via Getty Images)
Wall Street pushed higher on Friday, following the FTSE 100 (^FTSE) and European stocks for the last trading session of the week.
Google owner Alphabet (GOOG) crossed the $2tn valuation mark during the session after it revealed that first-quarter revenue jumped 15% while announcing its first-ever dividend of 20 cents a share alongside a $70bn (£56bn) stock buyback.
Google posted $80.5bn in revenue for the first quarter of 2024 and reported $1.89 in earnings per share, up from $1.17 – beating analysts’ expectations on both counts.
It came after the Bank of Japan (BoJ) kept its monetary policy unchanged overnight at the conclusion of its two-day meeting.
Interest rates remained on hold around zero, as widely expected, while the central bank removed a reference to the amount of government bonds it has roughly committed to buying each month.
It also issued fresh estimates projecting inflation to stay near its 2% target in the next three years, signalling its readiness to raise borrowing costs this year.
The Japanese yen fell to the weaker side of 156 per dollar in a knee-jerk reaction to the decision, and last stood at 156.15 per dollar.
London’s benchmark index was 0.8% higher in afternoon trade
Germany's DAX (^GDAXI) rose 1.4% and the CAC (^FCHI) in Paris headed almost 1% into the green
"Something has come loose in the UK market, like a hose pipe that was blocked up suddenly gushing forth," said Neil Wilson, chief markets analyst at FinalTo.
"The FTSE 100 rose to a new intraday high of 8,139.92 this morning as European indices were broadly higher on some better news from US tech giants Microsoft and Alphabet."
Follow along for live updates throughout the day:
LIVE COVERAGE IS OVER23 updates
LaToya Harding
Market close and week ahead
Well that's all from us today — thanks for following along. Be sure to join us again next week when we have more Big Tech companies reporting as earnings season is in full swing
Investors have some high expectations for some of the mega-caps reporting next week such as Amazon and Apple.
In the UK, investors should still keep a focus on Anglo American as the bid rejection from BHP is unlikely to be the last move by the Australian miner.
In Europe, the continent's most valuable company Novo Nordisk will show if it still reigns supreme.
There’s a legitimate risk that there will be no US interest rate cuts by the Federal Reserve this year.
It comes as the Federal Reserve’s primary inflation gauge, the core PCE (personal consumption expenditures) price index rose to 2.7%, above expectations of 2.6%. Core PCE inflation was 2.8%, above expectations of 2.6%.
Nigel Green, chief executive of deVere Group, said:
"This data represents another blow for the Federal Reserve and its battle against inflation.
“The latest reading from the Fed’s preferred gauge, PCE, underscores how inflation remains hotter than previously expected, despite the high interest rates which are being used as a weapon to try and cool it.
“With the US economy defying expectations by consistently remaining strong, with a strong labor market, rising PPI and CPI, and with today’s PCE, among other recent data, we are now revising our rate cut forecast.
“We believe that the cautious US central bank officials will need several consecutive months of evidence showing inflation is really heading back to the 2% target before they pivot on monetary policy.
“Therefore, as it stands, there’s a considerable risk that they will not feel comfortable about cutting rates before 2025.”
LaToya Harding
Goldman: UK stock market shrinking at fastest pace
Britain’s stock market is shrinking at its fastest pace in history, said Goldman Sachs.
Goldman Sachs analyst Guillaume Jaisson said:
The combination of dividends plus (net) buybacks implies a 5.5pc total yield in the UK. It compares with 4.5pc for Europe (excluding the UK) and 3.5pc in the US.
The yield differential with the S&P 500 is the widest ever which makes UK equities an interesting gateway to Europe and to diversify from the US.
In the UK the combination of buybacks and a lack of new issuance has meant that the net supply of public equity is shrinking at its fastest pace in history.
LaToya Harding
US PCE inflation rate rises
The US Federal Reserve’s preferred inflation rate has risen — up 2.7% in March from 2.5% in February.
This means that the personal consumption expenditure (PCE) rate came in higher than the 2.6% economists expected, suggesting inflationary pressures are building after consumer price inflation also rose last month.
LaToya Harding
Google owner crosses $2trn valuation
Google owner Alphabet (GOOG) crossed the $2trn valuation mark during the session today after it revealed that first-quarter revenue jumped 15% while announcing its first-ever dividend of 20 cents a share alongside a $70bn (£56bn) stock buyback.
Google posted $80.5bn in revenue for the first quarter of 2024 and reported $1.89 in earnings per share, up from $1.17 – beating analysts’ expectations on both counts.
Russ Mould, investment director at AJ Bell, said:
“Alphabet joining the ranks of tech companies paying dividends is a sign of the times.
“Big tech firms have enjoyed stellar growth over the past decade and while most remain highly innovative, their cash flows have become so strong that there’s oodles of money left over post-reinvestment in the business to reward shareholders.
"It’s not that they’ve been tight on cash before, it’s just that previously share buybacks were seen as the preferred way to deploy surplus money."
LaToya Harding
Bank of Russia leaves interest rates unchanged
View to the Moscow City business complex and Moscow river from the Sparrow Hills. (Pavel Losevsky)
The Bank of Russia has left interest rates unchanged at 16% for a third meeting in a row but unexpectedly raised its average key policy rate forecast for the year.
It forecast that rates will stay high for longer this year, instead of hitting their 4% target, as Putin's war effort risks fuelling inflation.
The Bank of Russia said:
"Due to the remaining elevated domestic demand, which outstrips the capabilities to expand supply, inflation will return to the target somewhat more slowly than the Bank of Russia forecast in February.
Nicholas Farr, emerging Europe economist at Capital Economics, said:
"While we expect inflation to reach a peak at around 8pc in the middle of this year, the backdrop of strong economic growth and loose fiscal policy mean that the CBR’s inflation forecast still looks too optimistic.
"Policymakers have signalled a preference today to keep real interest rates higher for longer to guard against upside inflation risks.
"We now expect the first interest rate cut to come in September (previously July) and for 300bp of interest rate cuts this year in total (previously 600bp)."
LaToya Harding
9 luxury homes to consider if money is no object
Have you ever wondered what a multimillion pound budget would buy you? The answer is a top-notch property in a great location offering loads of space, privacy and security – and plenty of extras too.
All these fabulous homes demonstrate what you can get with at least £5m to spend, though you’d need nearly 75 times this sum to afford 100-room Chateau d’Armainvilliers, outside Paris.
With a price tag of €425m (around £365m) it’s believed to be one of the most expensive houses in the world
Oil prices on track to snap two-week losing streak
Oil prices are on track to end higher this week, after two straight weeks of losses, following a US official expressing optimism over economic growth. It also rose as supply concerns lingered due to conflicts in the Middle East.
Brent crude futures gained 19 cents, or 0.2%, to $89.20 a barrel while Texas Intermediate crude futures rose 0.3% to $83.82.
So far this week Brent has gained 2.2%, while WTI is up 0.8%.
It came as US Treasury secretary Janet Yellen told Reuters that US economic growth for the first quarter could be revised higher, and inflation will ease after a clutch of "peculiar" factors held the economy to its weakest showing in nearly two years.
LaToya Harding
Wall Street set to open higher
US stocks are set to open in positive territory on Friday as traders cheer strong tech earnings and look to closely-watched inflation data.
Ahead of the bell, the Dow Jones Industrial Average was up 0.1%, the S&P 500 was up 0.8% and the Nasdaq 100 has gained 1%, as tech companies rally.
LaToya Harding
Copper price tops $10,000 for first time
The price of copper has risen as much as 1.4% on the London Metal Exchange to its highest point since April 2022. It has already rallied 17% this year and hit the $10,000 a metric ton mark after prices in Shanghai hit record levels.
Traders are betting that copper production will struggle to keep up with high demand.
The metal is vital in the development of electric cars and renewable technology.
Ewa Manthey, ING commodities analyst, said:
“Speculation over supply shortfalls in copper are pushing prices to new highs. At the same time, investors are turning optimistic about demand from the green energy sector. BHP’s bid for Anglo American highlights the looming supply squeeze.”
LaToya Harding
NatWest: Government’s stake falls below 28%
NatWest has said the the UK government's stake in the bank has fallen to 27.93%, down from 28.90%.
It previously owned as much as 84% of the lender when it was known as Royal Bank of Scotland after it was rescued in the 2008 crisis.
The government is planning to offer its shares in NatWest to the general public this summer.
Paul Thwaite, chief executive, told reporters this morning:
“Returning NatWest Group to private ownership is a shared ambition and one that we believe is in the best interests of the bank and all our shareholders.”
LaToya Harding
Best savings accounts that offer above inflation rates
UK households are on the lookout for every little way to make their money go further amid the cost of living crisis, and savings accounts might help.
After years of low rates, high-yield savings accounts are having a moment as the Bank of England has kept interest rates at a 16-year high of 5.25%. While homeowners face higher mortgages, there is a silver lining in higher borrowing costs as consumers can now find UK savings accounts that offer more than inflation.
The UK rate of inflation came in at 3.2% in March, the lowest since September 2021, according to figures from the Office for National Statistics (ONS).
Savers should make sure they shop around to find the best deals and check what rate they are on – as they could still be sitting on a product that does not beat inflation.
The ECB has prepared the ground for a first rate cut in June and the commentary from governing council members implies the bar is high for the central bank to change the plan.
Deutsche Bank said:
"Technically, however, the ECB has sent a conditional signal of a June cut.
"The decision to dial back the degree of policy restriction will be a function of how the governing council reads the inflation outlook, underlying inflation and the transmission of the monetary stance. In other words, the ECB will be data dependent."
It added:
"We assume the last thing the ECB wants is to cut rates in June and for this to be a one-off decision.
Not only would adjusting policy rates by only 25bp have a limited impact on growth and inflation, it could raise new questions about the ECB’s forecasting abilities if it thought it needed to begin to ease policy and then didn’t follow up with subsequent moves."
LaToya Harding
Insolvency: The UK isn’t out of the woods yet
Following the ONS insolvency data, Sarwar Khawaja FRSA chairman, executive board at Oxford Business College, said:
“There’s some positive signs in the latest insolvency data, but the economy isn’t out of the woods yet.
“Insolvencies may be down significantly month-on-month and year-on-year, but numbers remain high compared to pre-pandemic levels.
“The reductions suggest an easing of the economic pressure faced by businesses, including higher interest rates and stubbornly high inflation.
“While the current insolvency rate is well below the peaks seen during the 2008-09 recession, the business environment has changed significantly since then. The rise of the gig economy, e-commerce, and evolving consumer behaviour have reshaped the corporate landscape, making direct comparisons difficult."
LaToya Harding
Insolvencies fall in England and Wales
The number of individual and company insolvencies in England Wales fell last month, new data has shown.
Registered company insolvencies dropped to 1,815 in March, 17% lower than in February and when compared to the same period the year before.
The Insolvency Service said that insolvencies fell across the board, with 261 compulsory liquidations, 1,437 creditors’ voluntary liquidations (CVLs), 108 administrations and 9 company voluntary arrangements (CVAs).
Trevor Wood, partner and insolvency specialist at international law firm Vedder Price, said:
Today’s figures are extraordinary. I don’t think anyone will have been expecting a fall in insolvencies. All the signs on the ground were that insolvencies would rise as businesses continue to struggle to adjust to the high interest rate environment, which has ratcheted up operating costs and caused real funding issues for struggling companies.
The reality seems to be that businesses and investors have managed to adjust, cutting their cloth successfully to match the economic climate. This is a real bolt from the blue – but a welcome one.
LaToya Harding
UK consumer confidence rises in April
UK consumer confidence improved by two points in April, new data has shown, as optimism about personal finances for the coming year remained stable.
According to GfK’s consumer confidence barometer, the reading climbed to -19 during the month – four measures were up in total, while one stayed the same in comparison to last month’s announcement.
The survey was conducted among a sample of 2,009 individuals from 2 April to 15 April 15th.
The index measuring changes in personal finances during the last year was up two points to -11. The forecast for personal finances over the next 12 months came in unchanged at 2, which was 15 points higher than this time last year.
Joe Staton, client strategy director GfK, said:
"While the overall index score remains negative, all of the underlying five measures this April are significantly better than they were last April. These improvements reflect the impact on household budgets of lower inflation and the anticipation of further tax cuts.
"However, we are a long way from the much firmer sentiment last seen in the period before Brexit, COVID and the conflict in Ukraine. There is a lot of ground to make up, and caution is needed in the face of continuing economic and fiscal challenges, and revised views on when the Bank of England might cut borrowing costs.
"But spring has arrived and maybe consumer confidence is, at last, slowly becoming brighter and heading in the right direction.”
The FTSE 100 hit a fresh record high for the fourth day in a row, climbing as high as 8,136 points, up around 0.7% before paring back gains.
NatWest (NWG.L) is the top gainer, up 4.5%, after reporting a smaller-than-expected 27% drop in profits in the last quarter.
Investors are also in a positive mood after the strong tech results from Google parent company Alphabet, as well as Microsoft.
LaToya Harding
Stocks sink on GDP while tech giants report results
A weaker-than-expected read on US GDP sent stocks lower last night. The major indexes (^DJI, ^IXIC, ^GSPC) fell sharply after the US economy grew by only 1.6% in the first quarter, well below the 2.5% economists had been expecting.
On the earnings front, investors were watching the latest quarterly reports from tech heavyweights Microsoft (MSFT) and Alphabet (GOOGL, GOOG).
Trending tickers on Yahoo Finance include Meta Platforms (META), IBM (IBM), and Bristol-Myers Squibb (BMY).
Google parent announces first dividend as revenues jump
Alphabet’s (GOOG) first-quarter revenue jumped 15% as Google’s parent company announced its first-ever dividend of 20 cents a share alongside a $70bn (£56bn) stock buyback.
Google posted $80.5bn in revenue for the first quarter of 2024 and reported $1.89 in earnings per share, up from $1.17 – beating analysts’ expectations on both counts.
The company also announced its first dividend, of $0.20 per share, and said the payout would become quarterly.
“Our leadership in AI [artificial intelligence] research and infrastructure, and our global product footprint, position us well for the next wave of AI innovation,” CEO Sundar Pichai said in the earnings release.
Shares in Alphabet were up roughly 15% in premarket trading. The jump pushed Alphabet’s market cap past $2tn.
Mobile phone with website of British cyber security company Darktrace plc in front of business logo. Focus on top-left of phone display. (Timon Schneider)
And sticking with takeover news...
Cambridge-based Darktrace has unveiled a $5.3bn deal to be acquired by US private equity firm Thoma Bravo.
The offer of 620p per share represents a 20% premium on Thursday’s closing share price.
Darktrace, which first listed in London in 2021, hit out at the state of the London public markets, complaining that its financial achievements “had not been reflected commensurately in its valuation” with its shares being consistently undervalued relative to US peers.
The firm added that the deal with Thoma Bravo would allow it to expand more quickly into overseas markets.
CEO Poppy Gustafsson said:
“This proposed offer represents the next stage in our growth journey and I am excited by the many opportunities we have ahead of us.
“Our technology has never been more relevant in a world increasingly threatened by AI-powered cyberattacks. In the face of this, we are expanding our product portfolio, entering new markets, and focused on delivering for our customers, partners and colleagues."
Thoma Bravo said the acquisition was “an attractive opportunity to increase its exposure to the large and growing cybersecurity market”, and to invest to accelerate Darktrace’s development.
It comes after Thoma Bravo had walked away from takeover talks with Darktrace back in September 2022.
LaToya Harding
Anglo American rejects BHP offer
Anglo American has rejected BHP’s £31bn offer to buy the UK-listed miner, saying the proposal “significantly undervalues” the firm and would be “highly unattractive” to shareholders.
BHP’s shares fell on the back of the news amid investor concern that the world’s biggest miner had undervalued Anglo and might have to pay more to complete the deal. Anglo shares were also lower.
Stuart Chambers, chair of Anglo American, said:
“The BHP proposal is opportunistic and fails to value Anglo American’s prospects.
"The proposed structure is also highly unattractive, creating substantial uncertainty and execution risk borne almost entirely by Anglo American, its shareholders and its other stakeholders.”
LaToya Harding
Asia and US stocks overnight
Stocks in Asia climbed higher on Friday as the Bank of Japan kept its monetary policy unchanged at the conclusion of its two-day meeting.
Interest rates remained on hold around zero, as widely expected, while the central bank removed a reference to the amount of government bonds it has roughly committed to buying each month.
It also issued fresh estimates projecting inflation to stay near its 2% target in the next three years, signalling its readiness to raise borrowing costs this year.
The Nikkei (^N225) rose 0.8% on the day in Tokyo, while the yen fell amid volatile trade, and the Hang Seng (^HSI) surged 2.1% in Hong Kong. The Shanghai Composite (000001.SS) was 1.2% higher by the end of the session.
The Japanese yen fell to the weaker side of 156 per dollar in a knee-jerk reaction to the decision, and last stood at 156.15 per dollar.
Across the pond, Wall Street stocks retreated after lacklustre US economic data and disappointing earnings.
The Dow Jones (^DJI) finished at 38,085.73, down 1% while the broad-based S&P 500 (^GSPC) fell 0.5% to 5,048.43. The tech-rich Nasdaq Composite (^IXIC) shed 0.6% to finish at 15,611.76.
LaToya Harding
Coming up...
Good morning and welcome to our last markets live blog of the week. 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:
12:01am: GFK Consumer Confidence (UK)
7.00am: Trading updates: Smurfit Kappa, Fidelity
7.45am: French consumer confidence report for April
9.30am: UK insolvency statistics for March
11.30am: Bank of Russia interest rate decision
1.30pm: PCE measure of US inflation index for March
3pm: University of Michigan index of US consumer confidence
Watch: How does inflation affect interest rates?
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