The FTSE (^FTSE) and European stocks were higher on Wednesday as as bull traders defended support levels and awaited the data on the latest US inflation report.
The CPI rate is expected to show a small increase in the pace of price rises this afternoon, rising from 3.1% to 3.4%. However, core inflation could slow slightly from 3.8% to 3.7%.
EU benchmarks were led higher by most sectors. Producer manufacturing, transportation and especially tech stocks have brought the best performances so far.
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London’s benchmark index was 0.6% higher in afternoon trade
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Germany’s DAX (^GDAXI) rose 0.8% and the CAC (^FCHI) in Paris headed 0.5% into the green
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The pan-European STOXX 600 (^STOXX) was up 0.6% during the session
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Wall Street is set to open higher as S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were all in the green
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Tesco (TSCO.L) climbed 4% as profits rose by almost 160%
Read more: Trending tickers: Tesco, TSMC, Gold, M&C Saatchi
Dan Coatsworth, investment analyst at AJ Bell, said: “The central bank wants to see sustained evidence of inflation coming down and that doesn’t appear to be on the menu. The signs are clear for investors to see, but many have been choosing to ignore them.
“The Fed putting it into black and white could be a difficult pill for investors to swallow, so brace yourself for turbulence on the market this week.”
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UK homeowners renting out rooms amid high mortgage rates
UK homeowners are renting out a room in their house as a way of making some extra money amid the cost of living crisis that has pushed mortgage rates to record highs.
Over one in every 10 (12%) London homeowners have started renting out a room in their house in the past year to generate additional income, according to Barclays Consumer Spend report.
The trend is not exclusive to the capital, as some 3% of homeowners across the UK have also rented out a room in their property to make a bit more money.
UK homeowners have been particularly hit by cost of living woes, with the average rate on a two-year fixed deal currently stands at 5.74%, while for a five-year deal, rates are around 5.24%, according to figures from Uswitch.
Borrowers would need to spread their home loans over more than 70 years to be able to afford the same mortgages on offer just two years ago, banks have said.
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Coinbase introduces Apple Pay to app
Photo by: STRF/STAR MAX/IPx 2021 6/2/21 Coinbase to launch its Coinbase Card on Apple Pay and Google Pay. STAR MAX Photo: Apple Pay, coinbase and Google Pay logos photographed on multiple iPhone devices. (STRF/STAR MAX/IPx, Associated Press) UK Coinbase users can now use Apple Pay to buy Bitcoin, Ethereum and other digital assets made available online and within the app.
Daniel Seifert, Country Director for the UK and Vice President, EMEA at Coinbase said:
“We are extremely proud to announce our UK users can now use Apple Pay to make easy, secure and private purchases online and in-app, helping us in our goal of increasing accessibility to digital assets in the UK.
We know users already love using Apple Pay in their daily lives, so it only made sense to bring this convenient way to pay to Coinbase as well.”
It comes as more than 6 million UK adults currently own cryptocurrency. By lowering the barriers to entry to the digital asset market, Coinbase is aiming to increase this number throughout 2024 and beyond.
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Tesco profits soar 160%
Exterior view of a UK Tesco superstore (supermarket) with parked cars in the outdoor car park. (Lee Hudson) Tesco (TSCO.L) shares climbed as much as 1% in London on Wednesday after it revealed a 160% rise in pre-tax profits, soaring from 882m in 2022 to £2.3bn.
Sales at Britain’s largest supermarket rose by 4.4% to £68.2bn in the year to 24 February while more than 4,000 products were cheaper at the end of the year, with an average price cut of around 12%.
It is now expecting retail adjusted operating profit of at least £2.8bn in 2024-25.
Tesco also predicted that food inflation will stabilise in low single digits for the rest of the year, as it plans to make £500m in efficiency savings in the year ahead.
Retail adjusted operating profit, which excludes results from Tesco Bank, rose 10.9% to £2.76bn.
“Inflationary pressures have lessened substantially, however we are conscious that things are still difficult for many customers, so we have worked hard to reduce prices and have now been the cheapest full-line grocer for well over a year,” said Ken Murphy, chief executive.
“We have continued to invest in helping customers where it matters most, cutting prices on more than 4,000 products and doubling down on our powerful combination of Aldi Price Match, Low Everyday Prices and Clubcard Prices.”
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Fitch downgrades China outlook to negative
A woman reacts near a dragon sculpture outside a restaurant in Beijing, Tuesday, April 9, 2024. China’s Finance Ministry has denounced a report by Fitch Ratings that kept its sovereign debt rated at A+ but downgraded its outlook to negative, saying in a statement that China’s deficit is at a moderate and reasonable level and risks are under control. (AP Photo/Ng Han Guan) (Ng Han Guan, Associated Press) Fitch has downgraded its long-term outlook on China to negative while maintaining the country’s A+ credit rating.
The US-based rating agency said the adjustment was driven by the country’s bealeagured property sector, which has introduced increased uncertainty.
Fitch predicted a rise in the general government deficit to 7.1% of GDP in 2024 from 5.8% in 2023, marking the highest level since 2020 when China’s strict COVID measures had a significant impact on the economy.
The press release said:
“Fitch believes that fiscal policy is increasingly likely to play an important role in supporting growth in the coming years which could keep debt on a steady upward trend. Contingent liability risks may also be rising, as lower nominal growth exacerbates challenges to managing high economy-wide leverage.”
Despite the revised outlook, Fitch affirmed China’s IDR rating at ‘A+’, suggesting a potential downgrade in the medium term.
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