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FTSE 100: Wall Street mixed and Europe higher as traders look ahead to US inflation
The FTSE 100 (^FTSE) underperformed against European stocks on Wednesday, struggling for much direction as investors eyed a key US inflation reading later in the week. Wall Street opened mixed later in the day with the blue-chip Dow (^DJI) leading gains in thin trading.
It comes ahead of crucial economic data, commentary from the Federal Reserve's policymakers and as we continue to draw closer to the Easter holiday, meaning a shortened trading week, which coincides with the end of the first quarter.
London’s benchmark index was just 0.1% higher by the end of the session
Germany's DAX (^GDAXI) rose 0.5% and the CAC (^FCHI) in Paris was 0.2% up
The pan-European STOXX 600 (^STOXX) advanced almost 0.1%
Wall Street opened mixed after an artificial intelligence-fuelled rally helped US stocks reach record highs recently
The pound (GBPUSD=X) was trading flat against the dollar, down just 0.1%
The Bank of England says UK is coping with higher interest rates
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Jim Reid at Deutsche Bank said: "It remained quiet in markets yesterday other than for a sizeable late sell-off in US equities which came a bit out of the blue. Markets have been a bit thin this week so that might have contributed."
Follow along for live updates throughout the day:
LIVE COVERAGE IS OVER22 updates
BoE: UK is coping with higher interest rates
UK households have stayed resilient in the face of high interest rates but some businesses are likely to struggle with higher borrowing costs, according to the Bank of England.
The BoE has left interest rates unchanged at a 16-year high of 5.25% for the fifth time in a row.
"So far UK borrowers have been resilient to the impact of higher interest rates," the BoE's Financial Policy Committee said in a quarterly update.
The figures showed a rising trend of mortgages with 30-year terms – which now accounted for almost half (40%) of new mortgages, as buyers spread their home loans over a longer period to be able to make bills more affordable.
The BoE said this has made the loans more affordable for many borrowers, but it could also affect future borrower and lender resilience if people are more at risk of defaulting on their repayments.
About 45% of fixed-rate mortgage holders are still facing higher monthly repayments when they reprice their mortgage by the end of 2026.
The level of mortgage arrears had increased slightly and is expected to rise further, but remains low by historical standards.
UK businesses have also managed to cope with higher interest rates but the central bank warned that small businesses will struggle.
Trump Media & Technology Group
Shares in former US president Donald Trump's media firm (DJT) have soared on their stock market debut in New York and are currently the most trending stocks in after-hours trading.
Shares surged past $70 (£55.42) in early trade, giving the firm a market value of more than $9bn. They ended the day at about $58, still up more than 16%.
Trump Media & Technology Group, the company behind his Truth Social platform, is now listed on the Nasdaq stock exchange under the ticker symbol DJT – Trump’s initials – after completing its merger with blank-cheque company Digital World Acquisition Corp on Monday.
Trump, owner of 58%of the shares in the merged company before accounting for dilution, is the biggest beneficiary of the price surge. However, Trump is barred by terms of the merger from selling his shares for six months.
Analysts suggested that investors were mostly supporters of Trump ahead of the looming presidential election rather than institutions and that it was the most trending stock on US exchanges.
Renting now cheaper than owning
Undated file photo of terraced residential houses in south east London. Two-fifths (39%) of people who rent or have a mortgage would feel uncomfortable about discussing their finances and budget pressures with their lender or landlord, a survey indicates. The research, carried out for debt help charity StepChange, found people renting privately would feel particularly uncomfortable about discussing budget pressures with their landlord. Issue date: Monday September 25, 2023. (Dominic Lipinski, PA Images) First-time buyers might be better holding off as renting can be up to over £2,000 per annum cheaper in certain parts of the UK amid high mortgage costs.
Renters are making the biggest savings compared to first-time buyers in the East of England, where they are an average £2,325 better off each year, according to the Halifax Owning vs Renting Review.
Prospective homeowners are being hit by higher mortgage rates and a lack of homes available in the market, which is driving up prices.
Renting in the South East (£1,859), East Midlands (£1,741) and Yorkshire & the Humber (£1,731) also saw significant yearly savings when compared to owning a first home.
The South West, London and Scotland now the only regions where owning a first home is cheaper than renting. The largest annual savings are in the South West, where the owners are £1,663 better off.
Oil prices fall
File photo dated 15/02/16 of an oil platform standing amongst other rigs that have been left in the Cromarty Firth near Invergordon in the Highlands of Scotland. MSPs are demanding the Scottish Government provide clarity over the future of a fund set up to help the north east refocus its economy on greener alternatives to oil and gas. Issue date: Monday March 25, 2024. (Andrew Milligan, PA Images) Brent oil prices edged down early on Wednesday, for the second day in a row, as supply-side developments tempered upward momentum for the barrel's price.
Ricardo Evangelista, senior Analyst at ActivTrades, said:
"The release of data indicating a notable rise in US crude stockpiles alleviated some of the pressure that had driven prices to their highest level since October last week. Concurrently, traders are increasingly sceptical that OPEC+ nations will introduce substantial output adjustments at their upcoming meeting."
"Given this context, it wouldn't be surprising if the barrel's price continued to trade within a relatively narrow range, encountering significant resistance around $88, with downside risks limited by geopolitical uncertainties and expectations of economic activity expansion in the second half of the year."
Air up: Scent based technology helping you drink more water
Air up bottle The UK soft drinks market is worth over £18bn and is dominated by sugar-filled fizzy drinks and diet versions using artificial flavours and sweeteners.
Air up is aiming to change this with a more interesting way to drink water; their smart water bottles use retronasal smell to give a great-tasting drink without any additives or changes to your water.
Since 2019 launch, the group has sold over 5 million water bottles across Europe
In the UK alone, air up has grown 800% from 2021 to 2022
Reached an excess of €159m revenue run rate, increased by 75% since 2021
Raised more than €60m over two funding rounds, led by Five Seasons Ventures
Saved up to 130 million single-use plastic bottles and more than 2600 tonnes of sugar
Watch: How does inflation affect interest rates?
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