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London open: FTSE nudges up as investors eye US PCE
London stocks nudged up in early trade on Friday following solid gains on Wall Street and with Chinese markets on track for their best week since 2008, as investors eyed the release of the Federal Reserve’s favourite gauge of inflation.
At 0820 BST, the FTSE 100 was up 0.1% at 8,296.78.
Stocks in China got an added boost after the central bank cut its main policy rate and financial institutions’ reserve requirement ratio (RRR) in a bid to boost lending. The People’s Bank of China cut the seven-day reverse repo rate to 1.5% from 1.7%.
The overall mood in markets was also lifted by better-than-expected US initial jobless claims on Thursday and “some relief that the final print for second quarter GDP growth was held firm at 3%,” said Derren Nathan, head of equity research at Hargreaves Lansdown.
“There’s a swathe of further economic touch points to digest later today both in Europe and the US. Growth in the EU has been much harder to come by with many pointing to structural deficits in terms of innovation and productivity,” he said.
“First up today will be German unemployment figures followed by multiple sentiment and confidence indicators for the wider eurozone. There’s also consumer price index (CPI) figures to help take the lates pulse on inflation so overall expect a clearer picture of whether a soft landing remains in site.
“US inflation figures will also be closely scrutinised. Core personal consumption expenditure (PCE) is expected to have risen between 0.1% and 0.2% last month. Any significant rise above that range could dampen the prospects of further rate cuts by the Fed whose current forecast suggests another half point reduction by the end of 2024.”
The US PCE figures for August are due at 1330 BST.
In equity markets, Prudential was the top gainer on the FTSE 100 as it announced that PT Prudential Sharia Life Assurance has entered into a long-term strategic bancassurance partnership with Bank Syariah Indonesia (BSI). The partnership will see Prudential will become the Syariah life insurance provider of BSI from early 2025 and BSI will market, promote, distribute and/or refer Prudential products to its customers.
Asia-focused Prudential has gained sharply this week, lifted by news of China’s various stimulus measures.
Elsewhere, food producer Cranswick rallied after saying it expects annual results to be at the upper end of expectations as first-half trading came in ahead of the previous year.
The company said it was still cautious about “current market and wider economic and geopolitical conditions”, but noted that trading since the end of the first quarter “has been stronger than previously expected, underpinned by continued robust volume growth in our core UK food business (and) a positive ongoing contribution from our expanding pig farming operations”.
Clinical-stage biotherapeutics company PureTech Health was also up as it said the schizophrenia treatment it developed, which was later sold to Bristol Myers Squibb, has been approved by US regulators, triggering a $29m payment and unlocking potential future royalties.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Wheaton Precious Metals Corp. | +5.79% | +260.00 | 4,750.00 |
| 2 |  |
South32 Limited | +4.69% | +8.50 | 189.80 |
| 3 |  |
Prudential Plc | +3.84% | +26.20 | 707.80 |
| 4 |  |
Bhp Group Limited | +2.09% | +47.00 | 2,301.00 |
| 5 |  |
Croda International Plc | +1.77% | +74.00 | 4,257.00 |
| 6 |  |
Smith & Nephew Plc | +1.68% | +19.00 | 1,150.50 |
| 7 |  |
International Consolidated Airlines Group S.a. | +1.49% | +3.10 | 211.20 |
| 8 |  |
Whitbread Plc | +1.48% | +47.00 | 3,212.00 |
| 9 |  |
Bp Plc | +1.42% | +5.45 | 389.30 |
| 10 |  |
3i Group Plc | +1.40% | +47.00 | 3,400.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Flutter Entertainment Plc | -1.97% | -365.00 | 18,180.00 |
| 2 |  |
Ferguson Enterprises Inc. | -1.06% | -160.00 | 14,930.00 |
| 3 |  |
Relx Plc | -0.86% | -31.00 | 3,561.00 |
| 4 |  |
Diploma Plc | -0.80% | -36.00 | 4,480.00 |
| 5 |  |
Crh Plc | -0.75% | -52.00 | 6,898.00 |
| 6 |  |
Rolls-royce Holdings Plc | -0.72% | -3.80 | 523.00 |
| 7 |  |
Marks And Spencer Group Plc | -0.70% | -2.60 | 371.40 |
| 8 |  |
Natwest Group Plc | -0.64% | -2.20 | 344.10 |
| 9 |  |
Intermediate Capital Group Plc | -0.60% | -14.00 | 2,330.00 |
| 10 |  |
Barclays Plc | -0.51% | -1.15 | 225.90 |
US close: Dow claws back majority of Wednesday’s losses
Wall Street stocks closed higher on Thursday as major indices reclaimed a significant chunk of the previous session’s losses.
At the close, the Dow Jones Industrial Average was up 0.62% at 42,175.11, while the S&P 500 advanced 0.40% to 5,745.37 and the Nasdaq Composite saw out the session 0.60% firmer at 18,190.29.
The Dow closed 260.36 points higher on Thursday, clawing back most of yesterday’s streak-snapping losses.
Thursday’s primary focus was on a final reading of America’s Q2 gross domestic product, which revealed US economic activity expanded by 3% year-on-year in the second quarter of 2024, with the Bureau of Economic Analysis confirming an earlier estimate, though GDP growth calculations from previous years were hiked up. The figures matched the secondary estimates reported a month ago, and confirmed that GDP growth accelerated strongly from an upwardly revised 1.6% expansion in the first quarter, which was the lowest growth rate since the second quarter of 2022.
Elsewhere on the macro front, Americans lined up for unemployment benefits at a decelerated pace in the week ended 21 September, according to the Department of Labor. Initial jobless claims dropped by 4,000 week-on-week to 218,000, below market expectations for an increase to 225,000 for the lowest reading in four months.
Still on data, new durable goods orders were relatively unchanged month-on-month in August, according to the Census Bureau, compared to the revised 9.8% surge in July, the highest seen in four years, and contrasting sharply with market expectations of a 2.6% drop.
On another note, US pending home sales sank 3% year-on-year in August, according to the National Association of Realtors, extending June’s 8.5% decline.
Finally, the Kansas Fed‘s manufacturing activity index slumped to -18 in September, sharply lower than the previous month’s reading of 6, the lowest reading in 14 months and significantly lower than expectations for a modest improvement to 9.
In the corporate space, shares in semiconductor giant Micron were higher after the group issued strong forward guidance overnight, while Costco earnings beat estimates after the bell but reported some lighter than expected quarterly revenues.
Friday newspaper round-up: Gambling ads, road building schemes, public sector pensions
Ministers have been urged to intervene to stop football clubs from setting their own rules on curbing gambling advertising, after research showed Premier League fans were bombarded with nearly 30,000 gambling messages on a single weekend. Clubs in the top flight have so far avoided compulsory restrictions on gambling sponsorship, instead addressing public concern through voluntary measures such as a ban on front-of-shirt logos, starting in 2026. – Guardian
Campaign groups have urged the government to cancel major road building schemes including the Lower Thames Crossing, amid growing speculation that ministers could divert money earmarked for new roads into rail and other public transport. The transport secretary, Louise Haigh, is due to decide in a week whether to sign off a development consent order [DCO] for the £9bn road crossing linking Essex and Kent. – Guardian
Rachel Reeves should cut public sector workers’ “extremely valuable” pensions at her maiden Budget, a leading think tank has said, amid continued pressure from unions over pay rises. The Institute for Fiscal Studies (IFS) told the Chancellor that there is a “good case” for lowering pensions for public sector workers to fund future pay rises after the Government granted inflation-busting settlements to doctors, teachers and nurses. – Telegraph
The furore engulfing the Financial Conduct Authority over its chairman’s failure to abide by its own whistleblowing policy has intensified after Ashley Alder resisted pressure to resign. A review undertaken by Richard Lloyd, the senior independent director on the regulator’s board, and published by the watchdog on Monday found that Alder “did not follow the policy to the letter” when he forwarded emails from two whistleblowers to senior colleagues without removing the individuals’ personal details or obtaining their consent. – The Times
A number of Rightmove shareholders have said the property website should start takeover talks with the Australian rival it has rebuffed. Rightmove has rejected three indicative offers from Rea Group as opportunistic, unattractive and undervaluing the company’s prospects. Jamie Forbes-Wilson, fund manager at AXA Investment Managers, which holds 1 per cent of Rightmove, said: “We would agree that it feels a little opportunistic for Rea to be coming along at this time, but it is also recognition that Rea sees Rightmove as the high-quality business that we, as long-term holders of the share, think that it is.” – The Times
