Yahoo Finance Wall Street struggling as FTSE closes higher
The FTSE 100 and European stocks finished higher this session as weaker retail sales fuelled hopes that the Bank of England will not need to raise interest rates again to lower inflation and inflation in the Euro area fell sharply.
The FTSE 100 (^FTSE) rose 1.28% to close at 7,505 points, while the CAC 40 (^FCHI) in Paris gained 0.87% to 7,230 points. In Germany, the DAX (^GDAXI) climbed 0.79% to 15,911. The Stoxx 600 (STOXX) gained 0.95%, after a reversal of momentum in the previous session.
Inflation in the eurozone slowed sharply to 2.9% in October, approaching the European Central Bank (ECB) target rate of 2%.
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Across the pond, US stocks were struggling as Wall Street looked to retail updates for signals to a slowing economy.
Read more: UK inflation drop fuels hopes for interest rate cut
The Dow Jones (^DJI) was flat at 34,926 points. The S&P 500 (^GSPC) was also muted at 4,507 points and the tech-heavy NASDAQ (^IXIC) slipped 0.15% to 14,092 points.
Cooler inflation and softer jobs data were taken as signs the central bank's tightening is finally squeezing the US economy.
In Asia, the Hang Seng (^HSI) in Hong Kong tumbled 2.06% to 17,465 while the Shanghai Composite (000001.SS) rose 0.11% to 3,054 points. Tokyo’s Nikkei 225 (^N225) also finished in the green, climbing 0.48% to 33,585 points.
Read more: Trending tickers: Walmart | Applied Materials | Alibaba | LSEG
The Hang Seng was dragged lower by a 10% slump in shares of Chinese e-commerce giant Alibaba (9988.HK) following its cancellation of a plan to spin off its cloud computing unit. The company blamed uncertainties due to US chip restrictions.
Meanwhile, oil prices recovered after tumbling about 5% to a four month-low on Thursday on worries over global demand.
West Texas Intermediate (CL=F) rose 3% and was trading at $75 per barrel. Brent (BZ=F) crude climbed 3.12% to $79.84 per barrel.
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BoE's deputy governor warns interest rates need to stay higher for some time
The Bank of England's deputy governor has said that interest rates will need to stay restrictive for some time to bring inflation down to the 2% target.
Dave Ramsden said:
In terms of my latest monetary policy decision I voted along with five other MPC members to maintain Bank Rate at 5.25% at the November meeting. I continue to characterise my approach to monetary policy as being watchful and responsive. I will continue to monitor closely the indications of persistent inflationary pressures and resilience in the economy as a whole.
On the basis of our latest projections a restrictive policy stance is likely to be warranted for an extended period of time to bring inflation sustainably back to the 2% target.
The policymaker even hinted that further hikes are not necessarily off the table.
Given my assessment of the outlook and the risks I would not rule out having to respond to evidence of more persistent inflationary pressures by raising Bank Rate further in the future but I will continue to make my decisions meeting to meeting conditional on my assessment on developments in the economy and what they indicate about prospects for inflation.
Wall Street still on course for weekly win
Stocks were little changed at the start of the trading session Friday, setting Wall Street up for a weekly win, even as the indexes were dipping slightly into the red, my colleague Hamza Shaban writes.
The S&P 500 (^GSPC) edged lower by about 0.04%, while the Dow Jones Industrial Average (^DJI) was just over the flat line.The tech-heavy Nasdaq Composite (^IXIC) fell by 0.1%.
Mortgage rates ease again
Average mortgage rates continue to drop, according to Rightmove:
The average 5-year fixed mortgage rate is now 5.17%, down from 5.67% a year ago
The average 2-year fixed mortgage rate is now 5.62%, down from 5.93% a year ago
The average 85% LTV 5-year fixed mortgage rate is now 5.21%, down from 5.66% a year ago
The average 60% LTV 5-year fixed mortgage rate is now 4.69%, down from 5.35% a year ago
The average monthly mortgage payment on a typical first-time buyer type property when taking out an average five-year fixed, 85% LTV mortgage, is now £1,134 per month, down from £1,186 per month a year ago
Volvo shares plunge after Geely cuts stake
Volvo (VOLCAR-B.ST) shares have tumbled as much as 10% after majority shareholder China's Geely began a sale of around 100 million of the Swedish carmaker.
The Chinese carmaker has embarked on a selling spree in response to investor concerns about the company's small free float. Geely has plans to float off various part of its automotive empire, including moves to list the electric vehicles arm of Lotus through a SPAC deal later this year.
Geely will still hold 78.7% of Volvo shares following the sale, the company said in a statement, which puts the shares sold at over 3%.
The shares were sold at a significant discount, with the sale bringing in around $350m, according to Reuters.
Trending tickers: Walmart | Applied Materials | Alibaba | LSEG
From criminal probes hitting share price to £1bn in buybacks, you can read all that is moving markets this Friday here.
Walmart (WMT)
Walmart’s stock had its worst day in 18 months as the global retailer issued a wary earnings outlook for the current year.
Applied Materials (AMAT)
Applied Materials Inc. plunged in extended trading following a report that the Justice Department has begun a criminal probe into the largest US maker of chipmaking machinery.
Alibaba (9988.HK)
Shares of Chinese e-commerce giant Alibaba tumbled by around 10% in Hong Kong following its cancellation of a plan to spin off its cloud computing unit.
London Stock Exchange Group (LSEG.L)
Shares of the London Stock Exchange Group were in the red even as the stock exchange operator raised its mid-term growth guidance and said it would return £1bn to shareholders in 2024.
Lagarde calls for Europe-wide stock exchange to rival US
European Central Bank (ECB) President Christine Lagarde. Photo: Louiza Vradi/Reuters (Louiza Vradi / reuters) The European Central Bank president delivered a speech shortly after the EU inflation figures came out but gave no hints regarding interest rates.
Christine Lagarde said, however, that Europe needs its own version of the US Securities and Exchange Commission (SEC) and a unified stock exchange.
Supervision of capital markets “remains largely at the national level,” Lagarde said in Frankfurt. A European agency with “a broad mandate including direct supervision,” could help address that problem.
“Creating a European SEC, for example by extending the powers of ESMA, could be the answer” she said, referring to the European Securities & Markets Authority.
She also called for consolidation among Europe’s national financial exchanges, which include the CAC 40 (^FCHI) in Paris and the Dax (^GDAXI) in Frankfurt.
She said: “A truly European capital market needs consolidated market infrastructures — and this is where the private sector can show its determination, too.”
EU inflation falls to two-year low of 2.9%
Inflation in the eurozone slowed sharply to 2.9% in October, approaching the European Central Bank (ECB) target rate of 2%.
This is the lowest since July 2021 and was mainly driven by a fall in energy prices and a slowdown in food inflation.
Price increases in the services sector and more expensive food, alcohol and tobacco drove inflation in October but a fall in energy prices brought consumer prices growth to a fraction of the double-digit increases recorded in October last year, according to the EU's statistics office.
The cost of energy plunged 11.2% from a year ago in October, accelerating from a 4.6% decline in the prior month.
Food prices gained 7.4% in October compared with the same month last year, easing from September's 8.8% rise.
Eurostat said consumer inflation in the 20 countries using the euro slowed to 2.9% year-on-year in October from 4.3% in September after prices rose 0.1% month-on-month. A year earlier, the rate was 10.6%.
Hunt to receive key OBR forecast as Tories eye inheritance tax cuts
Cuts to inheritance tax could be on the agenda next week as chancellor Jeremy Hunt hopes to win over Tory MPs with his autumn statement.
Hunt will receive the final forecast from the Office for Budget Responsibility later on Friday, amid hopes in the Treasury there is more fiscal headroom than previously expected.
Earlier this week the chancellor said he would use Wednesday’s autumn statement to address labour supply issues and business investment, with his speech coming days after Office for National Statistics data put inflation at 4.6% in October.
Multiple reports have indicated that inheritance taxes could be cut, although no final decision is believed to have been made ahead of next Wednesday.
The Financial Times also said that the chancellor will hope to make tax breaks for business permanent.
AstraZeneca secures US approval for breast cancer drug
Astrazeneca (AZN.L) shares rose 1.4% in early trading after news that the US health regulator approved the giant pharma's Truqap in combination with an older drug for for a new breast cancer treatment.
The US Food and Drug Administration (FDA) decision allows use of the drug in combination with Astrazeneca's older cancer treatment Faslodex.
The FTSE 100 company said breast cancer remained the most prevalent cancer worldwide and a significant contributor to cancer-related mortality.
Nationwide increases profits to £1.3bn
A Nationwide Building Society branch in the High Street in Staines-upon-Thames, Surrey. Photo: Maureen McLean/Alamy Live News (Maureen McLean) Nationwide Building Society (NBS.L) has grown its profits and reported record-high financial benefits for members as it said its savings rates are higher than the market average.
The lender reported an underlying pre-tax profit of £1.3bn in the six months to September, up from £980m the year before.
Its financial benefit for members hit £885m, which it said reflects the group passing on higher interest to savers than rival banks on the market.
Chief executive Debbie Crosbie said the firm was “performing strongly” and its strategy was to “safeguard the future strength of the sand provide a good way to bank for customers.”
But the building society said the level of borrowers falling into arrears increased slightly, although remaining low, as higher interest rates and persistent inflation remain key risks.
Investors await Euro zone inflation figures
All eyes will be on the euro zone inflation print later in the day, after data throughout the week signalled softening inflation in the United States and the UK.
Headline annual inflation is predicted to be unchanged from the initial estimates at 2.9% for October, which was down from 4.3% in September. Core inflation should be in line with the initial estimate at 4.2%, down from 4.5% the previous month.
The figures will be published at 10h00 GMT.
Drop in retail sales pushes sector to worst month since the pandemic
The UK’s retailers saw their sales levels unexpectedly drop last month, pushing them to the lowest since February 2021 when there were still Covid-19 restrictions in place, official data suggested.
The Office for National Statistics (ONS) said that retail sales volumes dipped 0.3% in October. The statisticians also revised September’s fall from 0.9% to 1.1%.
Analysts had expected a rise of 0.4% in October, according to a consensus estimate supplied by Pantheon Macroeconomics.
Watch: Oil slips below $80 a barrel: Where could gas prices go?
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