The FTSE 100 (^FTSE) and European stocks finished lower on Monday, ahead of another slew of major macro data from America and the EU this week, including US inflation figures.
US inflation as measured by the Consumer Price Index (CPI) rose to 3.5% in the year to March, the third hot reading in a row, forcing traders to slash bets on Federal Reserve interest rate cuts. Core US inflation also rose more than expected, rising to 2.8% year-on-year.
Neil Wilson at FinalTo said: “The data for April will be crucial to how markets see the Fed progressing. Goods inflation is expected to decline a bit, but core services inflation will likely remain a little too hot for the Fed’s liking.
“CPI for April is seen at 0.3% month-on-month, ticking down to 3.4% YoY. Despite the resilience of US inflation, the message from the Fed remains one of easing to come — cuts are in the mail.”
Meanwhile, UK workers are earning more while producing less, according to new data.
The Resolution Foundation said that falling pension costs and import prices have temporarily severed the link between productivity and wage growth in Britain, allowing real wages to rise without putting further pressure on inflation. However, it warned in its latest macroeconomic policy outlook that it will not last.
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London’s benchmark index finished 0.2% lower, closing a session that was mostly in the red.
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Germany’s DAX (^GDAXI) closed 0.2% lower and the CAC (^FCHI) in Paris likewise slipped 0.1% into the red at the closing bell
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The pan-European STOXX 600 (^STOXX) closed flat.
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Wall Street pushed higher as memestock shares surge on the back of “Roaring Kitty’s” return to the social network X.
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The pound (GBPUSD=X) was up 0.2% against the dollar at 1.2553.
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Key companies reporting this week include: Burberry (BRBY.L), Vodafone (VOD.L), BT (BT-A.L) and Walmart (WMT).
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Are the memstocks back? Gamestop and AMC shares soar
FILE – A GameStop store in New York is shown on Jan. 28, 2021. GameStop and AMC were considered to be somewhat antiquated when small investors latched onto them in late 2020 and early 2021. (AP Photo/John Minchillo, File) (John Minchillo, Associated Press) Shares Gamestop have more than doubled at the start of trading, while fellow meme stock company AMC rises 20%.
GME surged as much as 110% thanks to the return of Keith Gill, better known as “Roaring Kitty,” to social media platform X.
He was the person behind the pandemic meme stock craze of 2021.
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Mortgage rates rates in April
New house build in the UK, example of modern homes built in Britain (Richard O’Donoghue) Moneyfacts has revealed that the average two- and five-year fixed mortgage rates rose in April.
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The overall average two- and five-year fixed rates rose between the start of April and the start of May, to 5.91% and 5.48% respectively. The average two-year fixed rate stands 0.43% higher than the five-year equivalent, the biggest difference seen in six months (November 2023 – 0.43%).
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The average ‘revert to’ rate or Standard Variable Rate (SVR) remained at 8.18%, just shy of the highest recorded (8.19%) during November and December 2023.
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The average two-year tracker variable mortgage fell to 6.12%.
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US dollar consolidates against peers
Major currencies were steady on Monday as the US dollar consolidated against its peers.
The dollar index, which measures the greenback against a basket of currencies, was mostly flat at 105.34, following its first weekly gain last week after two successive weeks of decline.
Matt Simpson, senior market analyst at City Index, said:
“For the wheels to truly fall off of the US dollar, incoming data needs to point to disinflation, not just pockets of weakness here and there.
“If inflation data ticks higher again this month it will surely undo the work of softer growth and slightly weaker employment figures.”
Sterling was firm at $1.2517, down 0.03% on the day while the euro was unchanged at $1.0769. Meanwhile, the yen weakened 0.11% to 155.91.
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Emirates posts record profits
Dubai, United Arab Emirates – February 17, 2024: An Emirates Airbus A380-800 Aircraft With The Registration Number A6-EVB At The Airport In Dubai, Uni (CHROMORANGE RM) Emirates posted record profits of $4.7bn (£3.8bn) in 2023 on the back of $33bn revenues. Profit the year prior had been $2.9bn.
The airline, which is owned by Dubai’s government, carried 51.9 million passengers in its during the financial year, compared to 43.6 million the year prior.
Sheikh Ahmed bin Saeed Al Maktoum, chairman and chief executive, said:
“Throughout the year, we saw high demand for air transport and travel related services around the world, and because we were able to move quickly to deliver what customers want, we achieved tremendous results.
“We are reaping the benefit of years of non-stop investments in our products and services, in building strong partnerships, and in the capabilities of our talented people.”
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Oil slips amid weak fuel demand and strong dollar
Greenpeace activists approach Equinor oil rig near Hammerfest, Norway April 29, 2019. Jani Sipila/Greenpeace/ Handout via REUTERS REUTERS ATTENTION EDITORS – THIS IMAGE WAS PROVIDED BY A THIRD PARTY (REUTERS / Reuters) Oil prices extended their declines on Monday amid signs of weak fuel demand and as comments from US Federal Reserve officials dampened hopes of interest rate cuts.
Brent crude futures slid seven cents, or 0.1%, while US West Texas Intermediate crude futures were at $78.21 a barrel, down cents.
independent analyst Tina Teng told Reuters:
“Oil markets shrugged off the impact of the Middle East conflicts and shifted attention to the world economic outlook again.”
Earlier this month, OPEC+ called out Iraq for pumping over its output quota by a cumulative 602,000 barrels per day in the first three months of 2024. The group said that Baghdad had agreed to compensate with additional production cuts over the rest of the year.
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Junior ISA subscriptions see 27% annual boom
ISA Savings, Individual Savings Accounts Saving in scrabble art deco letters, ISA concept (Leonora Oates) EasyMoney has revealed that Junior ISA subscriptions have risen 26.9% in the past year, while total savings hit an all-time high, as parents look to provide for their children’s futures amid economic uncertainty.
The data showed that there were 1,212 Junior ISA subscriptions in the UK in the year 2021-22, a rise which coincides with the moment that the Bank of England started to raise interest rates in December 2021.
The increase was largely driven by stocks and shares ISA subscriptions which rose 65.5% on the year, while cash ISAs increased by just 10.3%.
The latest subscription figures also mark a massive ten-year increase of 1,607% since the Junior ISA was first introduced in 2011/12.
Meanwhile, total Junior ISA savings totalled just under £1.5bn — the highest recorded. This marks an annual increase of 20.3% and a 10-year increase of 1,196%.
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