FTSE and European markets higher as UK economy grows

LIVE COVERAGE IS OVER14 updates

• UK economy bounces back in November but recession fears persist

  The UK economy returned to growth in November, with gross domestic product (GDP) expanding by 0.3% during the month, according to the Office for National Statistics (ONS), but the country is is still teetering on the brink of a recession.

  It follows the 0.3% contraction in October and is slightly stronger than the 0.2% predicted by economists.

  However, looking at the three months to November, the UK economy actually shrank by 0.2%, stoking recession fears. Output in services grew by 0.4% during the month.

  Read the full story here

• Fri, 12 January 2024 at 9:31 am GMT-7

  This blog is now closed but keep following the latest moving markets across the pond via our US team.

  Thanks and hope you’ll join us again on Monday.

• Fri, 12 January 2024 at 7:20 am GMT-7

  Citigroug reports $1.8bn loss for last quarter of 2023

  Citigroup (C) has posted a $1.8bnn fourth-quarter loss after booking several large charges tied to overseas risks, last year’s regional banking crisis and CEO Jane Fraser’s overhaul plan.

  Earnings were hit by $1.3bn being set aside to cover risks related to Russia and Argentina, and an $880m hit from the devaluation of the Argentinian peso last year.

  Citi is also paying $1.7bn into the US Federal Deposit Insurance Corporation, through the levy to recapitalise this fund after the regional banking crisis last year.

  Also, there is a $780m restructuring charge, as Citi looks to eliminate up to 20,000 jobs.

  Fraser called her company’s performance “very disappointing”.

• Fri, 12 January 2024 at 7:10 am GMT-7

  That’s a 10 … followed by 12 zeros for BlackRock

  BlackRock (BLK) announced Friday its assets under management topped $10,000,000,000,000 at the end of the fourth quarter, with last year’s rally in markets bringing client assets over this threshold for the first time in two years.

  My colleague Myles Udland writes:

  The firm’s AUM tallied $10,008,995,000,000, to be precise, as of Dec. 31.

  During 2023, BlackRock saw $289bn of net inflows, with the $96bn in assets that flowed into the firm’s products during the fourth quarter marking the second best quarter of the year. In Q1, some $110 billion in net assets moved into BlackRock vehicles.

  Alongside its quarterly results on Friday, BlackRock also reported it acquired infrastructure fund manager GIP for $12.5bn. GIP has over $100bn in assets under management.

• Fri, 12 January 2024 at 5:49 am GMT-7

  JP Morgan reports record profits despite hit from Silicon Valley Bank failure

  Last year JP Morgan Chase (JPM) earned more profits than it ever has before, even as its results dipped in the final quarter.

  The largest lender in the US reported Friday that it raked in a record $49.6bn in annual net income, the most ever in the history of the American banking industry. And it happened during a year that was the scariest for the industry since the financial crisis of 2008.

  That result — buoyed by better loan margins and the acquisition of failed regional lender First Republic — was 31% better than its bottom line in 2022.

  Read the full story here

• Fri, 12 January 2024 at 5:04 am GMT-7

  Vistry ‘optimistic’ lower mortgage rates will boost demand in housing market

  Housebuilder Vistry (VTY.L) has said it is hopeful that the recent easing of mortgage costs will boost demand in the housing market this year, as it said it had a better 2023 than some of its rivals.

  The affordable homes provider also expects housing shortages to be at the top of the political agenda in the lead up to a general election.

  Vistry said demand in the property market was “suppressed” throughout the year, “reflecting the higher interest rate environment and inflationary cost pressures on household income”.

  But it went on to provide a more positive outlook, telling investors: “The easing of mortgage rates in recent weeks is encouraging and we are optimistic that this will help stimulate demand in the 2024 financial year.”

  Major lenders in the UK, including Barclays, HSBC UK, Halifax and First Direct, have marked the start of the new year by reducing their available rates.

• Fri, 12 January 2024 at 4:32 am GMT-7

  Trending tickers: Burberry, Oil, Vistry and DocuSign

  The latest investor updates on stocks that are trending on Friday:

  Burberry (BRBY.L) – Burberry has said the slowdown in demand for its luxury goods worsened in December as wealthy shoppers tightened their belts.

  Brent oil (BZ=F) -Oil prices jumped as Britain and the US launched airstrikes against Houthi rebels in Yemen in response to the attacks on ships in the Red Sea that have disrupted global trade.

  Vistry (VTY.L) – Housebuilder Vistry said it expects profits to come in £8m higher than its previous forecast months after it said it would switch its entire focus onto affordable homes.

  DocuSign (DOCU) – Shares in DocuSign were higher in premarket trading amid reports that Bain Capital and Hellman & Friedman are competing to acquire the provider of online signature services.

  Read the full story here

• Fri, 12 January 2024 at 3:47 am GMT-7

  China’s consumer prices fall for third month, fuelling interest rate cut hopes

  

  China’s consumer price index fell 0.3%, less than a 0.4% drop expected by a Reuters poll of economists, and also lower than the 0.5% fall seen in November.

  The National Bureau of Statistics (NBS) said pork prices, the main factor impacting year-on-year CPI, fell 26.1%, narrowing the rate of decline by 5.7 percentage points.

  Services inflation, however, rose steadily with tourism and hotel accommodation prices increasing by 6.8% and 5.5%, respectively.

  Ken Cheung Kin Tai, chief Asian FX strategist at Mizuho Bank, said: “The lingering deflationary pressure justifies the expectation of an imminent rate cut, which is widely expected to materialise in the one-year medium-term policy facility yield decision next Monday.”

• Fri, 12 January 2024 at 3:23 am GMT-7

  HelloFresh fined £140,000 over millions of spam texts and emails

  Food delivery firm HelloFresh (HFG.DE) has been fined £140,000 for a seven-month spamming campaign of 79 million emails and one million texts.

  Customers were also not given enough information that their data would be used for marketing for up to 24 months after cancelling their subscriptions, the Information Commissioner’s Office (ICO) said.

  The ICO began its investigation in March 2022 following 14 complaints made directly to the regulator as well as 8,729 to the 7726 spam message reporting service.

  The investigation found the company continued to contact some individuals even after they had asked it to stop.

• Fri, 12 January 2024 at 1:55 am GMT-7

  Bigger pictures is one of ‘sluggish growth’, says NIESR

  The National Institute of Economic and Social Research (NIESR) has warned on the “sluggish growth” of the UK economy. Paula Bejarano Carbo, NIESR associate economist, said:

  “Though this may seem positive, GDP is estimated to have fallen by 0.2% in the three months to November compared with the previous three-month period, due to contractions in manufacturing and construction outputs, as well as failure to sustain growth in the services sector.

  “These three-monthly data, which are less volatile than the monthly figures, suggest that the bigger picture remains one of sluggish growth. This is consistent with the recent ONS quarterly national accounts revisions to GDP estimates, which revised the growth figures for 2023Q2 and 2023Q3 downwards from 0.2% and no growth, respectively, to no growth and -0.1%.”

• Fri, 12 January 2024 at 1:45 am GMT-7

  Markets snapshot

  Here’s head of markets at Interactive Investor Richard Hunter’s take on today’s trading session:

  “The premier index also opened with a sprightly step, adding 0.8%, although also unable to arrest the harm of the last few trading sessions, leaving the FTSE 100 (^FTSE) trailing by 1.2% in January.

  The index was held back by a trading update from Burberry (BRBY.L) which was released early, and which was accompanied by a lowering of the group’s guidance. The shares fell by some 9% in early trade. Some solace was found in the housebuilders following recent releases implying that demand may be beginning to return, with Barratt Developments (BDEV.L) and Taylor Wimpey (TW.L) moving higher.

  There was also an uptick in certain selected miners, suggesting that some traders could be taking the opportunity to buy on the dip with a potential uptick in global demand later in the year in mind.”

• Fri, 12 January 2024 at 1:33 am GMT-7

  Technical recession still in the cards, warns KPMG

  KMPG UK chief economist Yael Selfin has warned that a technical recession is “still potentially on the cards”. She said:

  “New year but old problems for the UK economy.

  “The economic outlook currently remains gloomy, with a technical recession still potentially on the cards in the second half of 2023, especially given the expected impact from the industrial action in December.

  “Nonetheless, even if the economy manages to avoid a recession, it is expected to remain in stagnation territory.

  “Manufacturing recovered somewhat after it was hit by the impact of high interest rates and weakening global economic activity, while construction is experiencing difficulties from a slowdown in housebuilding.

  “The hope is that the outlook ahead will brighten as mortgage rates continue to fall, improving affordability dynamics.

  “The second half of the year could see fortunes changing for the UK economy, with inflation expected to continue to normalise.

  “This could raise the prospect of earlier interest rate cuts, with the Bank of England likely to be wary about the risk of overtightening given the weak economic backdrop.”

• Fri, 12 January 2024 at 1:29 am GMT-7

  Burberry slashes profit targets as luxury demand weakens further

  

  Burberry (BRBY.L) has said the slowdown in demand for its luxury goods worsened in December as wealthy shoppers tightened their belts.

  The London-based fashion house slashed its profit guidance for the year as a result.

  It said trading has been affected by a continued “slowdown in luxury demand” after rises in the cost of living and increases to interest rates globally.

  Jonathan Akeroyd, chief executive officer of the company, said it saw a “further deceleration in our key December trading period” which will weigh on its profitability.

  Burberry had already seen its shares slump following its previous update in November, when it warned sales growth was lagging behind targets due to pressure in the luxury market.

  On Friday, Burberry revealed retail revenues for the three months to December 30 slid by 7% to £706m.

  It said like-for-like store sales dropped by 4% over the key trading period.

• Fri, 12 January 2024 at 1:26 am GMT-7

  Shell tops ranking of most expensive fuel station brands

  Shell (SHEL.L) fuel stations are typically the most expensive in the UK, new figures show.

  The British oil and gas company’s branded UK forecourts charged an average of 142.6p per litre for petrol and 151.2p per litre for diesel on Thursday, according to analysis by motoring research charity the RAC Foundation.

  That is more than all other major retailers.

  Supermarket-branded fuel remains the cheapest despite savings compared with that sold by other companies narrowing in recent years.

  Morrisons was found to have the lowest price for fuel, with its forecourts charging an average of 136.9p per litre for petrol and 145.5p per litre for diesel.

  The figures suggest filling a 55-litre family petrol car is typically £3.14 cheaper at Morrisons compared with Shell.