Falling inflation clears path for more rate cuts
Wall Street rose this afternoon after better than expected inflation figures cleared the way for the US Federal Reserve to continue interest rate cuts to support the jobs market.
The Dow Jones Industrial Average rose 0.8pc, the S&P 500 rose 0.3pc and the Nasdaq rose 0.1pc. Smaller listed companies, in the Russell 2000 index, which are seen as especially affected by interest rates, jumped 1.2pc.
Consumer spending, which accounts for more than two-thirds of US economic activity, rose 2.2pc in August, according to the personal consumption expenditure (PCE) index released by the Commerce Department.
This was down from 2.5pc and below estimates of 2.3pc, while core PCE, which excludes volatile food and energy components, rose in line with estimates by 2.7pc.
Kathleen Brooks, research director at broker XTB, said: “The Fed has been vindicated ... Personal income and spending were both lower than expected, which suggests that the Fed made the right choice when deciding to cut interest rates by [half a percentage point] last week.”
Olu Sonola, head of US economic research at Fitch Ratings, said: “All things considered, this month’s [inflation] report does not nudge the Fed in the direction of another forceful [half a percentage point] cut in November. Two [quarter point] cuts still seem more likely in November and December.”
The dollar dropped by 0.2pc against a basket of leading currencies this afternoon. Meanwhile, the yield on benchmark US 10-year Treasury notes dropped to 3.78pc from 3.80pc last night.
Read the latest updates below.
06:14 PM BST
Signing off...
Thanks for joining us this afternoon.
We will be back on Monday morning to cover the latest from the markets, but you can follow all the latest business news and analysis over the weekend here.
06:11 PM BST
Oil spikes after Israel hits Hezbollah HQ
The price of a barrel of oil spiked this afternoon after Israel targeted Hezbollah’s leader in a major attack on the group’s central headquarters in Beirut.
The price of a barrel of Brent crude, the global benchmark, is currently up 0.7pc today at $72.11.
05:55 PM BST
Volkswagen cuts profit forecast as car sales deteriorate
Volkswagen has cut its annual outlook, citing a weaker-than-expected performance of its passenger car division as well as a deteriorating economic environment.
Europe’s largest carmaker now expects a profit margin of around 5.6pc in 2024, down from 6.5-7pc previously.
Sales are expected to fall by 0.7pc to €320bn (£267bn) whereas the company had initially expected an increase of up to 5pc.
Volkswagen said it was cutting its outlook “in light of a challenging market environment and developments that have fallen short of original expectations, particularly at the brands Volkswagen Passenger Cars, Volkswagen Commercial Vehicles and Tech. Components”.
It comes as Volkswagen considers closing factories in Germany for the first time in its 87-year history as it battles to cut costs and survive the transition to electric cars.
05:36 PM BST
European stocks hit record after China’s ‘whatever-it-takes’ stimulus
Europe’s Stoxx 600 share index closed at a record high this afternoon as companies and sectors exposed to China continued to rally after Beijing unveiled a raft of stimulus measures this week, with luxury firms amongst the biggest gainers.
The pan-European Stoxx 600, which includes some of Britain’s biggest companies, closed up 0.5pc at 528.08, taking its gains for the week to more than 2pc.
China-exposed sectors such as automakers and chemicals were among the biggest risers, each jumping more than 2pc, reflecting the importance of the country to European companies.
China’s central bank lowered interest rates and injected liquidity into the banking system as Beijing assembled a last-ditch stimulus assault to pull economic growth back towards this year’s roughly 5% target.
Analysts at Danske Bank said:
[China] sent a clear signal that stimulus will be stepped up across the board and turning the economy has the number one priority now.
It is the biggest round of stimulus since the current crisis started three years ago and could turn out to be China’s ‘whatever-it-takes’ moment.
Luxury firms LVMH and Richemont gained 3.7pc and 2.7pc, respectively.
A gauge of 10 of Europe’s biggest luxury firms added 2.6pc, lifting its weekly gain above 13pc, the most since the index was created in 2016.
05:29 PM BST
Dow Jones advances to record high after inflation report
The blue-chip Dow Jones Industrial Average rose this afternoon to hit an all-time record after a benign inflation report cleared the way for more interest rate cuts.
The Dow rose as much as 1.1pc to 42,628.32. Meanwhile, the S&P 500 rose as much as 0.3pc, although it is currently flat. The Nasdaq rose as much as 0.2pc, but is currently down 0.3pc.
It was a stronger day for the Russell 2000 index, which tracks small caps that fare better in a low rate environment, gained 1.5pc to a one-week high. It is currently up 1.2pc.
John Luke Tyner, portfolio manager at Aptus Capital Advisors, said:
Markets are just hopeful that we get more cuts. The Fed may accelerate this cutting cycle, but we may not get another [hal a percentage point] cut unless we get some bad data - a negative jobs report or a spike in unemployment.
05:13 PM BST
Reeves ‘risks jump in interest rates’ by rewriting debt rules
Rachel Reeves’s “opportunistic” attempt to rewrite Britain’s fiscal rules ahead of the Budget risks causing a surge in interest rates, a leading think tank has warned. Eir Nolsøe reports:
The Institute of Fiscal Studies (IFS) said any move to alter the Chancellor’s self-imposed fiscal rules “would not be without risks”, which comes ahead of her maiden Budget in October.
Ms Reeves is considering the change to unlock up to £50bn for spending on large-scale projects such as roads and housing, as the Treasury seeks to “count the benefits of public investment and not just the costs of it”.
However, the IFS said that rather than changing the fiscal rules, Ms Reeves could also raise money for investment through tax rises or spending cuts.
The think tank said: “There is a risk that the Government is perceived to be making a change not for principled reasons, but for opportunistic ones – to allow for significantly more borrowing for investment without any need for tough choices elsewhere.”
05:09 PM BST
Oil prices rise as producers plan more production and China tries a stimulus
Oil prices rose today as the market attempts to find the right level amid plans by Saudi Arabia and other Opec+ producers to expand output.
The price of Brent crude, the global benchmark, is up 0.4pc today so far, but since Monday prices have overally fallen 2.5pc.
Rebecca Babin, senior energy trader at CIBC Private Wealth, told Bloomberg:
Crude is attempting to stabilise as the market absorbs the return of Libyan supply and anticipates potential Opec+ unwinds in December.
But Dan Yergin, vice chairman of S&P Global, told CNBC this afternoon:
The thing that’s dominated the market is the weakness in China. Half the growth in world oil demand over a number of years has simply been in China, and it hasn’t been happening.
The big question is, stimulus, will you see a recovery in China. That’s what the market is struggling with.
04:57 PM BST
Global stocks rise on rate hopes and Beijing’s stimulus
Stock markets mostly rose Friday as slowing US and European inflation raised hopes of more aggressive interest rate cuts and China took measures to boost its struggling economy.
All major European markets closed higher, locking in strong gains for the week.
In New York, the Dow and the wider S&P were higher in afternoon trading, with further gains held back by strong advances in previous sessions.
The tech-heavy Nasdaq index was slightly lower, pulled down by healthcare stocks.
Earlier, the Hong Kong and Shanghai stock markets finished the week more than 10pc higher, with Shanghai seeing its strongest weekly gain since 2008.
04:55 PM BST
FTSE closes up
The FTSE 100 closed up 0.4pc.
The biggest riser was chemicals business Croda International, up 3.3pc, followed by hip replacement maker Smith & Nephew, up 3pc.
The biggest faller was Next, down 3.5pc, followed by Endeavour Mining, down 2.7pc.
Meanwhile, the FTSE 250 rose 1.1pc. The top riser was Wizz Air, up 7.6pc, followed by Fidelity China Special Situations, up 7.4pc.
The biggest faller was Hochschild Mining, down 5.8pc, followed by Moonpig, down 3.5pc.
04:51 PM BST
Incoming Japanese PM gives central bank scope to hike rates
Japan’s incoming prime minister Shigeru Ishiba has signalled that he will not push back against further increases in still near-zero interest rates.
He told a television programme:
We’ll deploy fiscal stimulus if necessary. There also won’t be any change to Japan’s loose monetary-policy trend.
When asked about the chance of further rate hikes by the central bank, he added:
It’s something the Bank of Japan, which is obliged to achieve price stability, must decide.
Mr Ishiba said he would not make any specific request to the Bank of Japan (BOJ), adding that he would not push back against the central bank’s efforts to phase out stimulus as long as they were done carefully.
The remarks came after Mr Ishiba won Friday’s ruling party leadership race, which de-facto makes him next prime minister due to the party’s dominance in parliament.
The BOJ ended negative interest rates in March and raised short-term borrowing costs to 0.25pc in a landmark shift away from a decade-long, radical stimulus programme.
The yen jumped 1.7pc aginst the pound and 1.6pc against the dollar today.
04:37 PM BST
Euro zone yields drop as investors raise bets on ECB rate cuts after data
Euro zone government bond yields dropped today after inflation data from France and Spain led investors to increase their bets on future European Central Bank interest rate cuts.
Softer than expected US inflation data added to the mood, pushing European yields down a little further.
French consumer prices rose less than anticipated in September, aided by a decline in energy costs. Spain’s EU-harmonised annual inflation level eased to 1.7pc, lower than the 1.9pc expected by analysts polled by Reuters.
The German and euro area figures are due next week.
Germany’s 10-year bond yield, the benchmark for the euro zone bloc, fell to 2.15pc from 2.18pc.
The decline came as money markets priced in an 80pc chance of an ECB rate cut in October from around 20pc early this week and 60pc before the inflation data.
Major banks including Goldman Sachs and JPMorgan on Friday also revised their ECB rate path forecasts to include a cut in October.
Greg Fuzesi, euro area economist at JPMorgan, said: “This week’s data have sufficiently moved the needle.”
Fuzesi said this week’s purchasing managers’ index (PMI) data “disappointed significantly” and “the early hints from today’s French and Spanish CPI [consumer prices index] reports is also that core inflation may be edging lower.”
Purchasing managers’ index survey data released Monday showed euro zone business activity contracted sharply and unexpectedly this month.
04:33 PM BST
Investors await glimpse of JD Sports’ performance in the US after shares rise 34pc
JD Sports will give investors a glimpse of its growing dominance in the US after gaining nearly 1,200 stores after a takeover of rival sports brand Hibbett.
The London-listed fashion retailer, which sells brands from Nike and Adidas to The North Face and Columbia, will announce its half-year financial results on Wednesday.
In August it reported a 2.4pc increase in sales between May and July, compared like for like with the same period a year ago.
Its sales performance has been driven in recent months by growth in North America and Europe, offsetting weaker activity in the UK where online shopping and clothing sales have been more subdued.
Aarin Chiekrie, an equity analyst for Hargreaves Lansdown, said JD had “got back on the front foot” over the latest quarter “after a challenging period of volatile conditions and guidance downgrades”.
Investors will be looking for an update on the group’s more recent trading and any signs that consumer sentiment is picking up in the UK.
JD, dubbed the “king of trainers”, completed the acquisition of sports retailer Hibbett in July in a deal worth $1.1bn (£830m).
Its share price has also been boosted by more than a third over the past six months as the FTSE 100-listed firm races ahead with its growth plans.
Mr Chiekrie said investors will be “keen to hear how the integration is progressing” when it updates on its half-year results.
“Despite the positive momentum of structural growth opportunities in the sports apparel market, JD Sports remains cautious about the outlook for the rest of the year,” Mr Chiekrie added.
04:14 PM BST
Tesla bosses defend checking up on sick workers at home
Tesla has defended visiting the homes of German employees who call in sick as Elon Musk pledges to investigate high rates of absenteeism. James Titcomb reports:
André Thierig, the manager of Tesla’s gigafactory on the outskirts of Berlin, said turning up at the homes of staff was not unusual.
“We wanted to appeal to the work ethic of the workforce,” he told DPA, the German press agency.
It came after German media reported that Tesla bosses had checked in on 30 employees as part of an attempt to fight a spate of absences.
The carmaker has provided bonuses to staff who turn up for work regularly and executives have suggested that staff who frequently call in sick are “dishonourable” and are “exploiting” the system.
04:04 PM BST
Wall Street near records after Fed boosted by fresh inflation data
The major Wall Street indexes are drifting around their records Friday as hopes hold that the economy can pull off the rare feat of getting painfully high inflation under control without a recession.
The Dow Jones Industrial Average rose 0.8pc, the S&P 500 rose 0.3pc and the Nasdaq rose 0.1pc. Smaller listed companies, in the Russell 2000 index, which are seen as especially affected by interest rates, jumped 1.2pc.
Treasury yields eased in the bond market after a report showed inflation slowed in August by a touch more than economists expected. It echoed similar numbers reported earlier in the month about inflation in August, but Friday’s report has resonance because it’s the measure of inflation that officials at the Federal Reserve prefer to use.
The Fed had long been keeping its main interest rate at a two-decade high in hopes of slowing the economy enough to stifle inflation. Now that inflation has eased substantially from its peak two summers ago, it’s begun cutting rates to ease the brakes off a slowing job market and prevent a recession.
If the Fed can pull off a perfect landing for the economy where it chokes off high inflation without suffocating the economy, all while lowering interest rates, it would be a form of nirvana for financial markets. And it’s a large reason why US stocks have rallied to records.
03:45 PM BST
Weight Watchers replaces boss after shares crash 90pc from ‘miracle drug’ onslaught
The boss of Weight Watchers, Sima Sistani, is to leave the company “effective today”, the dieting giant told investors this afternoon.
WeightWatchers has been hit by the rise of “miracle” weight-loss drugs such as Wegovy, which are seen as easier to follow than traditional dieting plans supported by in-person meetings with other dieters.
The company’s share price has collapsed by 90pc since January, despite attempts in recent years to modernise the weight loss plans being offered.
The company said that Ms Sistani, who has spent two years in the job, “led the company’s transformation to a modern digital health organisation”.
Weight Watchers said board member Tara Comonte would become interim chief executive.
03:40 PM BST
Gas prices fall amid Ukraine talks
The price of natural gas has slipped as talks about maintaining supplies through Ukraine gathered pace.
Dutch front-month futures, the continent’s benchmark, fell as much as 2.2pc after two days of rising prices.
European gas prices have risen this week as a deal to allow the transit of gas between Moscow and Kyiv is due to expire at the end of the year.
However, Slovakian gas supplier Slovensky Plynarensky Priemysel said it is seeking a partner to keep gas flowing.
An option would be for Azerbaijan’s Socar to ship fuel via Ukraine.
The UK’s gas contract has fallen as much as 2.1pc today.
Thanks for following the updates so far today. Alex Singleton will keep them coming as you head towards the evening.
03:24 PM BST
Harland & Wolff shareholders wiped out as Titanic shipbuilder names administrators
Titanic shipbuilder Harland & Wolff has confirmed shareholders will be completely wiped out as it appointed administrators.
The Belfast-based company said a strategic review carried out of the business by financial advisory Rothschild “will not result in any returns to shareholders”.
It emerged this month that the holding company of the business was heading for administration after bosses admitted the troubled group is insolvent.
This has put up to 1,000 jobs at risk at its four yards, which continue to trade as normal.
In an update today, the company said it had 66 staff at its holding company, as it appointed Gavin Park and Matt Cowlishaw of Teneo Financial Advisory as joint administrators.
The company said: “The administrators will unfortunately be required to reduce the headcount upon appointment.
“A number of employees will be retained to provide certain required services to the operational companies under a transitional services agreement with the administrators.”
03:03 PM BST
Oil prices slump as production poised to rise
Oil prices are on track for a substantial weekly decline amid the prospect of more production from Saudi Arabia and Libya.
Brent crude was down 0.5pc towards $71 a barrel and is about 4.4pc lower this week, with West Texas Intermediate below $68.
In Libya, rival groups have agreed to appoint a new central bank governor, paving the way for a solution to a row that has led to a drop in oil production.
Commerzbank analyst Carsten Fritsch said: “A compromise between the conflicting parties in Libya is emerging, which means that the export ban could be lifted shortly.”
He added that if Opec+ increases output in December “the oil market will potentially face a considerable oversupply in the coming year”.
02:47 PM BST
‘FOMO’ pushes China stocks up at fastest pace in 16 years
China stocks rose at their fastest pace in 16 years as “FOMO” - the fear of missing out - gripped investors and triggered a slowdown in transactions on its major market.
China and Hong Kong stocks today logged their biggest weekly jumps since 2008 and 1998, respectively, as Beijing rolled out its most aggressive stimulus package since the pandemic.
However, the Shanghai Stock Exchange was forced to apologise for an “abnormal slowdown” in transactions as investors rushed in to pick up stocks after Beijing unveiled a string of economy-boosting measures.
“After the market opened, there was an abnormal slowdown in the confirmation of transactions during stock auctions on our exchange, which had an impact on transactions,” the stock exchange said.
“Upon handling the situation, stock auction transactions were gradually restored from 11.13am.
“The exchange expresses its deep apologies for this abnormal occurrence.”
The blue-chip CSI300 and benchmark Shanghai Composite indexes have this week gained roughly 16pc and 13pc, respectively. Hong Kong’s Hang Seng index has added 13pc.
David Chao, a strategist at Invesco Asset Management, said: “FOMO is running high for investors as Chinese equities have moved close to 10pc in the past three days.
“Based on historical valuation, we think Chinese stocks have another 20pc runway to go.”
02:37 PM BST
US stocks rise as inflation eases
Wall Street’s main stock indexes opened higher on Friday after soft inflation data raised expectations that the Federal Reserve could now focus on shoring up the labor market and continue easing interest rates.
The Dow Jones Industrial Average rose 52.8 points, or 0.1pc, at the open to 42,227.95.
The S&P 500 rose 10.0 points, or 0.2pc, at the open to 5,755.36​, while the Nasdaq Composite rose 38.5 points, or 0.2pc, to 18,228.778 at the opening bell.
02:28 PM BST
Landlord punished for missing green targets
Housing association London & Quadrant Housing Trust is set to be penalised on £300m of its sustainability-linked bonds after missing an emissions target.
Our property correspondent Pui-Guan Man has the latest:
L&Q has failed to meet a required target to cut its Scope 1 and 2 greenhouse gas emissions by 20pc, compared with a baseline set in 2020, sparking higher costs for the housing association.
Scope 1 and 2 emissions relate to those generated directly by a company, rather than third parties such as clients.
By failing to meet the target, the housing association will need to pay a higher interest rate on its bonds. The coupon will increase to 2.125pc, from 2pc.
In its latest sustainability report, L&Q said the increase in emissions was “partly due to a temporary pause in buying renewable electricity”.
The company stated in the report: “We made the decision not to purchase renewable electricity as of October 2022, as widespread disruption to the wholesale energy markets caused the price of renewable energy to soar.
“This coincided with the cost-of-living crisis and meant we had to make tough decisions on budgets everywhere.”
Its reported Scope 1 emissions were also reduced following adjustments to gas consumption figures as “part of a data cleanse and corrections to previous over-reporting”, according to the company.
L&Q, thought to be the first housing association in the UK to issue a sustainability-linked bond, has vowed to set annual sustainability targets, update its sustainability finance framework and engage with investors on agreeing new ESG metrics within the next two years.
02:10 PM BST
One of Britain’s last microchip factories nationalised in £20m rescue deal
A British chip factory involved in sensitive military projects has been nationalised by the Ministry of Defence following warnings that it was at risk of closure.
Our industry editor Matt Oliver has the details:
The Government confirmed today that it had purchased the site in Newton Aycliffe, County Durham, from US company Coherent.
The deal is understood to be worth around £20m and will secure around 100 local jobs at the company, which is being renamed Octric Semiconductors UK.
A statement described the factory as the country’s only secure site capable of producing gallium arsenide semiconductors, making it “critical to the defence supply chain and major military programmes and exports”.
Read how the business was rescued from the brink - and why it matters.
01:52 PM BST
Next falls as boss sells £29m in shares
Next shares dropped after its boss Lord Wolfson unexpectedly announced it is selling £29m worth of his stock in the high street bellwether.
The retailer’s chief executive offloaded 290,000 shares, which made up about 20pc of his holding, according to data compiled by Bloomberg.
Before the sale he held about 1.4m shares.
Next shares dropped as much as 1.3pc despite a broad rally in markets amid economic stimulus measures from China and a measure of US inflation falling further than expected today.
It comes after Next has said it could be forced to close stores after losing a landmark legal battle over equal pay.
The retail giant issued the warning after an employment tribunal ruled last month that Next should pay its store staff, who are predominantly women, the same hourly rates as its mostly male warehouse workers.
Next’s upgraded its forecasts for a second time in two months in its latest set of results for the six months to July.
01:42 PM BST
Wall Street on track to rise as consumer spending eases
US stock indexes moved higher in premarket trading after an inflation reading supported the narrative of moderating inflation in the economy.
Consumer spending, which accounts for more than two-thirds of US economic activity, rose 2.2pc in August, according to the personal consumption expenditure (PCE) index released by the Commerce Department.
This was down from 2.5pc and below estimates of 2.3pc, while core PCE, which excludes volatile food and energy components, the rose in line with estimates by 2.7pc.
After the data was published, the Dow Jones Industrial Average was up 49 points, or 0.1pc, in premarket trading, while the S&P 500 gained 5.75 points, or 0.1pc, and the Nasdaq 100 was up 31.5 points, or 0.2pc.
August PCE #inflation +2.2% year/year vs. +2.3% est. & +2.5% prior … core PCE +2.7% vs. +2.7% est. & +2.6% prior pic.twitter.com/di1JGAcByy
— Liz Ann Sonders (@LizAnnSonders) September 27, 2024
01:35 PM BST
US inflation measure falls faster than expected
A key measure of US inflation has fallen slightly more than expected in a sign that the Federal Reserve will have room to keep cutting interest rates.
The personal consumption expenditures (PCE) index dropped from 2.5pc to 2.2pc in August, according to the Commerce Department, which was slightly lower than forecasts of 2.2pc.
01:17 PM BST
Amazon takeover of Anthropic cleared by regulators
Amazon’s artificial intelligence partnership with start-up Anthropic has been given the all clear by competition regulators.
The Competition and Markets Authority said the partnership, which includes a $4bn investment by Amazon in Anthropic, did not qualify for investigation under Britain’s merger rules.
An Amazon spokesman said: “We welcome the UK’s Competition and Markets Authority (CMA) decision acknowledging its lack of jurisdiction regarding this collaboration.”
01:05 PM BST
Wall Street muted ahead of inflation figures
US stock markets were on track to edge lower as investors refrained from placing big bets ahead of a crucial inflation report.
The personal consumption expenditure index - the Federal Reserve’s preferred inflation measure - is expected to have risen by 2.3pc in August, according to economists, down from 2.5pc the month before.
A significant drop could open the door to another half a percentage point rate cut by the Fed next month.
In premarket trading, the Dow Jones Industrial Average and S&P 500 were flat while the Nasdaq 100 was 0.1pc lower.
12:53 PM BST
Ghana cuts interest rates... to 27pc
Ghana lowered interest rates for the first time in eight months after the pace of inflation slowed in the West African nation and is expected to cool further.
The monetary policy committee cut the key rate to 27pc from 29pc, Governor Ernest Addison said.
Since January’s cut officials had maintained their policy stance to support the cedi and restrain price pressures. But annual inflation has now slowed for five consecutive months to 20.4pc in August, from 25.8pc in March.
12:38 PM BST
Crypto billionaire attacks non-dom crackdown as he quits Britain for Switzerland
A German cryptocurrency billionaire has quit Britain for Switzerland in protest over the Government’s plans to crack down on non-doms.
Our reporter Pui-Guan Man has the details:
Christian Angermayer, who has lived in England for more than a decade, said the policy was a “huge mistake” and “potentially a bigger act of national self-harm than Brexit”.
He is the latest entrepreneur to abandon the UK over the Government’s plans to end a tax perk for wealthy residents domiciled overseas, which was included in Labour’s election manifesto.
However, Mr Angermayer said he was far from alone. “Every non-dom I know has left or is about to leave,” he told Bloomberg.
Read why the Swiss city of Lugano is becoming attractive to crypto entrepreneurs.
12:10 PM BST
Abrdn Property Income Trust agrees £351m deal with US investment giant
Abrdn Property Income Trust (API) has agreed to sell the vast majority of its portfolio to Travelodge owner GoldenTree Asset Management in a £351m.
The London-listed trust told shareholders today that US investment giant GoldenTree will buy its Abrdn Property Holdings subsidiary.
The operation covers 39 properties, covering the property trust’s entire portfolio except for land at Far Ralia in the Cairngorms.
GoldenTree has paid a cash deposit of £35.1m and will pay the remainder once the takeover is completed.
It came after Custodian Property Income REIT’s bid to take over API collapsed earlier this year.
Custodian’s offer, which would have seen API shareholders receive 0.78 Custodian shares for each API share, failed to secure the necessary 75pc approval rate needed at a vote in March.
11:53 AM BST
Jacker maker Moncler zips higher as LVMH makes investment
Designer label Moncler jumped on the Milan stock market as it emerged French luxury giant LVMH has bought into an investment vehicle which controls the Italian coat maker.
LVMH, run by Europe’s richest man Bernard Arnault, surged as much as 15pc as it emerged LVMH is buying a 10pc stake in Double R.
The investment vehicle is controlled by Moncler chairman and chief executive Remo Ruffini and owns a 15.8pc stake in Moncler.
The retailer, which sells jackets that can cost more than £4,500, has more than quadrupled its sales over the past decade to nearly €3bn (£2.5bn).
Mr Arnault said: “Moncler has been one of the most significant entrepreneurial success stories in the industry over the past twenty years.”
11:38 AM BST
House sales rise as lower mortgage rates entice buyers
House sales have inched up as buyer confidence grows, according to the latest monthly figures from HMRC.
Our property correspondent Pui-Guan Man has the latest:
There were 90,210 residential deals in the UK last month, an increase of 5pc compared to a year ago and broadly static on the previous month.
Industry figures have said the yearly increase shows signs of a bounceback in the housing market, as inflation and interest rates ease.
Nick Leeming, chairman of Jackson-Stops, said: “This growth is partly driven by greater choice in mortgage products and rising buyer confidence, further supported by last month’s interest rate cut by the Bank of England—the first since 2020. As transaction data often lags behind real-time sentiment, we expect this positive momentum to carry through for the rest of the year.”
Andrew Lloyd, managing director at Search Acumen, said July’s interest rate reduction has “begun to have a tangible impact”, with August’s figures “suggesting that homebuyers are keen to capitalise on more favourable borrowing conditions”.
Holly Tomlinson, financial planner at Quilter, said: “The year-on-year increase highlights that the housing market has rebounded, as persistent inflation and interest rate pressures ease somewhat.
By contrast, the non-residential property transactions suffered a 3pc fall year-on-year, to 9,750 in August.
Ms Tomlinson said: “[The] softness in the commercial and industrial property sectors reflects businesses grappling with tighter credit conditions, weaker consumer spending, and lingering economic uncertainty.”
11:22 AM BST
Sainbury’s and Tesco bakery supplier poised for float
A bakery business which supplies Tesco and Sainsbury’s has announced plans to flat on the Spanish stock markets.
Europastry aims to raise about €210m (£175m) with the float on stock exchanges in Barcelona, Madrid, Bilbao and Valencia.
The shares are being marketed at €15.85 to €18.75 apiece, which would value to company at up to €1.5bn (£1.3bn).
The bulk of Europastry’s business is making partially baked breads and pastries, such as croissants, that it distributes frozen to clients such as Tesco and Sainsbury’s, as well as Starbucks, Dunkin’ and Pret a Manger.
11:01 AM BST
German unemployment rises more than expected
The number of people out of work in Germany rose more than expected in September, official figures showed, in the latest sign of the challenges facing Europe’s largest economy.
The office said the number of unemployed increased by 17,000 in seasonally adjusted terms to 2.82m. Analysts had expected that figure to rise by 12,000.
The seasonally adjusted job rate remained stable at 6pc.
There were 696,000 job openings in September, 65,000 fewer than a year ago, the federal labour office Destatis said.
The chart below shows how the number of people in the German economy is falling:
Im August 2024 waren voraussichtlich rund 45,9 Millionen Personen mit Wohnort in Deutschland erwerbstätig. Damit sank die #Erwerbstätige|nzahl gegenüber dem Vormonat leicht um 21 000 Personen (0,0 %). Gegenüber August 2023 stieg sie um 0,3 % (+145 000). https://t.co/qJiJ0wSqJa pic.twitter.com/eX0AWsGuLu
— Statistisches Bundesamt (@destatis) September 27, 2024
10:47 AM BST
PureTech rises as schizophrenia drug approved
PureTech Health shares jumped after its drug for schizophrenia was approved by the US Food and Drug Administration (FDA).
The green light for KarXT, which will be marketed as Cobenfy, means the London-listed healthcare innovator will receive $29m (£21.7m) in milestone payments after it sold the drug to Bristol Myers Squibb for $14bn (£10.5bn) earlier this year.
PureTech shares were up 4.5pc, having risen more than 67pc so far this year.
10:25 AM BST
Pound slumps against yen as Japan prepares for new PM
The pound has sunk against the yen after Japan’s former defence minister was set to become its next prime minister.
Shigeru Ishiba won the leadership contest of the country’s ruling Liberal Democratic Party and is a critic of past monetary stimulus.
He has said the Bank of Japan was “on the right policy track” with rate hikes thus far this year, which has boosted the yen against global currencies.
Sterling dropped 1.1pc against the yen to ¥191.8, and was down 0.3pc against the dollar to $1.338 ahead of key US inflation figures later.
The pound was flat against the euro at 83.3p despite increasing bets on eurozone interest rate cuts amid falling French and Spanish inflation
Matthew Ryan, head of market strategy at Ebury, said: “The pound is trading back around its recent highs on the euro this morning, as market participants react to the clear signs of a divergence in UK-euro area economic news.
“While ECB members appear to be orchestrating a dovish pivot, Bank of England officials continue to hold the line.”
10:16 AM BST
Cranswick expects bigger profits as it sniffs out more sales
Pork producer Cranswick has upped its profit outlook for the year after investing in its farms and churning out more sales in recent weeks.
The Yorkshire-based supplier, which employs more than 15,000 people across the country, said trading since July had been stronger than previously expected.
This was driven by “robust volume growth” in its core UK food business - meaning it has been selling more products - and the impact of growing its pig herd.
Cranswick supplies major grocery retailers in the UK with food including fresh pork and chicken, and also operates brands including Ramona’s Houmous.
Its staff work from farms and production facilities across the UK. It recently commissioned a new houmous facility in Worsley, Manchester.
Shares in Cranswick rose 5.9pc as it said its recent trading means it now expects its half-year performance to be ahead of the same period last year.
09:51 AM BST
Murdoch group makes fourth bid for Rightmove
Rupert Murdoch’s property group REA has made a fourth bid for Rightmove and urged the board of the London-listed company to come to the table.
The Australian company, which is owned by Mr Murdoch’s News Corp, made a 781p per share bid worth £6.2bn. It has had offers of £5.6bn, £5.9bn and £6.1bn rejected.
It comes after AXA Investment Managers, which holds a £67m stake in Rightmove, broke ranks to urge the company to begin “serious” takeover talks.
REA chief executive Owen Wilson said:
While the Rightmove board has refused to meet with us, we have enjoyed the opportunity to connect with Rightmove shareholders and to share our vision for the combination of the number one digital property businesses in the UK and Australia.
We continue to see the potential for us to strengthen Rightmove and accelerate its growth. This is a compelling opportunity to create a true global technology leader on the London market via a secondary listing, operating in two of the most attractive markets in the world.
We have further improved our offer, and today announce that we intend to include a mix and match facility for shareholders who wish to receive a greater proportion of their consideration in REA shares to do so.
We believe it is in the interests of Rightmove shareholders for the Rightmove board to engage with us and to extend the 30 September 2024 deadline.
09:32 AM BST
Japanese shares plunge as it prepares for new PM
Japanese shares have plunged by 5.1pc in aftermarket trading as its former defence minister is set to the country’s new prime minister.
Shigeru Ishiba won a closely fought contest today in his fifth and what he called final attempt to lead the ruling Liberal Democratic Party.
Tokyo stocks markets had rallied overnight by more than 2pc on a falling yen.
The currency hit 146.49 per dollar - its weakest since the start of September - amid bets that nationalist Sanae Takaichi would win the leadership of Japan’s ruling Liberal Democratic Party in a vote.
Ms Takaichi has argued that hiking interest rates was a bad idea owing to the merits of a weaker yen.
However, the yen strengthened to around 142.80 after it became clear Mr Ishiba would win.
He supports the Bank of Japan’s exit from its longstanding unorthodox loose monetary policies, which had put interest rates in negative territory for several years.
09:07 AM BST
UK markets rise as China tries to boost economy
UK shares were poised for weekly gains as China’s aggressive stimulus measures lifted mining and luxury stocks.
The FTSE 100 index was up 0.1pc, while the domestically-focused FTSE 250 midcap index rose 0.4pc.
Mining shares have jumped this week as hopes for increased demand from China lifted metal prices, with an index of London-listed industrial miners rising more than 11pc this week.
Similarly, gains in China-exposed luxury retailers such as Burberry lifted the personal goods index about 12pc this week.
However, the FTSE 100 has lagged the European benchmark Stoxx 600, which is on track for weekly gains of more than 2pc, compared to 0.7pc for London’s blue-chip index.
Investors now await the US personal consumption expenditures (PCE) price index - the Federal Reserve’s preferred measure of inflation - which could indicate how steeply the US will cut interest rates.
Among individual stocks, Cranswick rose 5,9pc after the meat producer forecast its annual profit towards the upper end of market expectations.
08:50 AM BST
French inflation ‘crashed in September’
Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said:
Inflation in France crashed in September, and if these data are representative of what happened in the EZ as a whole—which is not certain—ECB doves will be in a very strong position to push through a third rate cut next month.
We have long made the point that if eurozone core goods inflation failed to rebound in September, in line with our and the ECB’s new forecasts, an October cut would become the baseline.
This now seems to be case, which is clearly reflected in market pricing, now pointing to a 75pc probability of a rate cut next month.
We will nail our colours to the mast on a forecast once we see the eurozone inflation numbers on Tuesday, but overall, an October cut now looks much more likely.
08:23 AM BST
Eurozone bond yields fall after sharp fall in French inflation
Eurozone government bond yields dropped after sharp falls in inflation data from France and Spain.
French consumer prices rose less than anticipated in September, up 1.5pc compared to 2.2pc in August, aided by a decline in energy costs.
Spain’s European Union-harmonised 12-month inflation fell to 1.7pc, lower than the 1.9pc expected by analysts expected
Germany’s 10-year bond yield, the benchmark for the eurozone, fell 3.5 basis points to 2.1pc.
Germany’s two-year bond yield, which is sensitive to ECB rate expectations, was down three basis points at 2.08pc. It hit 2.079pc on Thursday, its lowest level since December 2022.
🇫🇷 Big downside surprise in French inflation, with headline CPI down to 1.2% in September. Crucially, services inflation eased as well, to 2.5%.
If we get similar surprises across euro area countries the ECB will have all it needs to cut in October. pic.twitter.com/GrArh0Kv0n— Frederik Ducrozet (@fwred) September 27, 2024
08:16 AM BST
Traders ramp up bets on eurozone interest rate cuts
Derivatives traders have increased bets on the European Central Bank cutting interest rates after figures showed French inflation dropped sharply this month.
Money markets indicate there is a 79pc chance that eurozone policymakers will cut borrowing costs next month, up from a 60pc chance on Thursday and 25pc a week ago.
08:11 AM BST
UK markets rise amid China surge
The FTSE 100 rose at the open following steep gains in China as its central bank brought in measures that will allow billions to be injected into its economy.
The blue chip index rose 0.1pc to 8,291.74 while the midcap FTSE 250 gained 0.4pc to 21,097.19.
08:06 AM BST
French inflation falls below 2pc for first time in three years
French inflation dropped below 2pc for the first time since 2021, official figures show, raising the case for the European Central Bank to cut interest rates.
The consumer prices index fell to 1.5pc in September, according to statistics agency Insee, which was down from 2.2pc in August and well below estimates of 1.9pc.
There was a similar result in Spain, where inflation fell from 2.4pc to 1.7pc amid declines in fuel prices.
08:00 AM BST
Intel ‘rebuffs Arm bid’ for product business
Intel rejected an approach by British chipmaker Arm to buy its product division, according to reports.
The US chip manufacturer told the Cambridge-based semiconductor company that the unit is not for sale, according to Bloomberg News.
It comes after Intel halted plans for a €30bn (£25bn) microchip facility in Germany in a major blow to Europe’s technology plans.
The US chipmaking giant said it would delay construction at a site in Magdeburg by around two years, as well as postponing a facility in Poland, despite receiving billions of euros in state subsidies.
The Silicon Valley icon unveiled a radical overhaul aimed at reversing a share price collapse, fuelled by concerns that Intel has lost its ability to make cutting-edge chips.
07:42 AM BST
Toyota sales slump amid vehicle certificate scandal
Toyota’s sales fell again after declines in Japan and China as it grappled with a scandal over falsified vehicle safety certificates.
Global output, including that of subsidiaries Daihatsu and Hino, dropped in August by 12.6pc from a year earlier to 808,023 units, the company said.
Global sales fell 3.7pc compared to the same month last year, following a 0.7pc gain in July.
Toyota’s sales fell more than 9pc in Japan as it felt the delayed impact of recent regulatory scandals involving falsified vehicle safety certifications, which forced a number of the country’s biggest carmakers to suspend production for affected models.
07:36 AM BST
European markets poised to jump as China stocks enjoy best week since 2008
European shares are on track to jump higher after China stocks were put on course for their best week since 2008 amid Beijing’s efforts to inject life into the world’s second largest economy.
The UK’s FTSE 100, France’s Cac 40, Germany’s Dax and Italy’s FTSE MIB are all expected to rise 0.1pc to 0.2pc when markets open after China cut the amount banks must hold in reserve, releasing an estimated £106.6bn in liquidity into the financial market.
The move by the People’s Bank of China comes a day after President Xi Jinping and other top officials admitted to “new problems” in the world’s second-largest economy and outlined plans to get it back on track.
China and Hong stocks rallied following the measures, putting them on track for their best weekly performances in 16 years.
China’s blue-chip CSI300 and benchmark Shanghai Composite indexes have so far gained 15pc and 12pc, respectively, for the week. Hong Kong’s Hang Seng index has also added nearly 13pc.
Barclays analysts said: “At face value, all measures announced this week signal that the urgency of policy response is not lost on authorities – an important shift in a market that was looking for more than just the bare minimum.
“But in a scenario that would have more far​-​reaching effects on global assets, perhaps this week signals that China is looking to repair its national balance sheet structurally.”
07:14 AM BST
Good morning
Thanks for joining me. European markets are on track to power higher after China freed up banks to inject another £100bn into the world’s second largest economy.
Stock indexes in the UK, France, Germany and Italy are poised to open higher following a major rally in China and Hong Kong shares, which are set to log their strongest weekly gains since 2008.
5 things to start your day
1) Reeves urged to cut ‘extremely valuable’ public sector pensions | Thank tank says remuneration should be rebalanced to prioritise more competitive salaries
2) Britain paying highest electricity prices in the world | Cost of power for industrial businesses now four times more expensive than in US
3) Petrol prices to drop as Saudi Arabia prepares to flood oil market | Markets anticipate that Riyadh will drop its $100 price target and boost output
4) Why ‘Mr Brexit’ is plotting a tax raid on France’s rich | Hard-nosed negotiator Michel Barnier faces his toughest challenge to date in trying to corral his countrymen
5) Matthew Lynn: Labour’s bitter war on wealth has already flopped | Non-dom clampdown will force Reeves to raise other taxes or else increase borrowing
What happened overnight
Stocks in Asia extended gains on Friday as risk appetite across financial markets got a further boost from China’s latest stimulus measures and upbeat US momentum.
The People’s Bank of China cut the amount banks must hold in reserve, releasing an estimated $142.6bn (£106.6bn) in liquidity into the financial market as leaders embark on one of their biggest drives in years to kickstart growth.
Also overnight, the bank cut the seven-day reverse repo rate – the short-term interest paid by the central bank on loans from commercial lenders – from 1.7pc to 1.5pc.
China’s benchmark CSI 300 Index looked set for its biggest weekly gain since 2008 after officials pledged to increase fiscal support and stabilise the property sector to revive growth.
The Hang Seng in Hong Kong advanced 3.7pc to 20,659.03 and the Shanghai Composite index jumped 2.1pc to 3,065.29.
Meanwhile, the Shanghai Stock Exchange encountered glitches that hindered order processing and caused delays after the market opened on Friday. This led to a 6.4pc increase in the Shenzhen index, as local media reported that investors flocked to that smaller market during the delay.
Trading returned to normal by noon, and the Shanghai Stock Exchange later said in a statement that it was still investigating the causes.
Elsewhere, Japan’s Nikkei 225 index was up more than 1pc as the ruling Liberal Democratic Party conducted a leadership election that will determine who is Japan’s next prime minister. The change in leadership is not expected to lead to any major policy shifts, given the similarities between the leading contenders.
Australia’s S&P/ASX 200 added nearly 0.1pc to 8,208.70. South Korea’s Kospi shed 0.2pc to 2,666.01.
On Wall Street, the S&P 500 scored a record closing high and the Dow and Nasdaq rose.
The S&P 500 closed up 0.4pc, at 5,745.37. The blue-chip Dow Jones Industrial Average rose 0.6pc, to 42,175.11. The Nasdaq Composite advanced 0.6pc, to 18,190.29.
The yield on 10-year US Treasury notes, which influence investment decisions around the globe, rose to 3.80pc yesterday evening from 3.79 late on Wednesday.
