Wall Street follows FTSE 100 and European stocks higher despite weaker than expected US retail sales

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Shares in software company Palantir (PLTR) were the sought after following the US opening bell, as Argus Research analysts began coverage of the data-analytics software company with a 'Buy' rating.

Analysts at Argus Research believe Palantir stands to benefit from growing sales to commercial clients. The target for the stock price is $29, with artificial intelligence highlighted as a potential catalyst for continued growth.

"Warfare in this century will continue to be transformed by software," Alex Karp, chief executive of Palantir Technologies, said in his letter to shareholders in May.

"Many fear the application of artificial intelligence in the military context, including its potential to make possible more autonomous and indeed self-directed weapons systems," he added.

However, Karp said, the company’s software "has become as vital to the elimination of an adversary as it is to protecting the innocent from harm."

US factory output beat expectations in May, rising sharply despite interest rates remaining at a 23-year high.

According to Federal Reserve data, industrial production rose by 0.9% in May from a month earlier, significantly higher than the monthly gains seen in both March and April.

It was also well above market expectations of a 0.4% monthly rise.

Hargreaves Lansdown has received a new takeover proposal, worth £5.4bn, from a group of private equity buyers.

The offer for the investment platform follows three previous approaches in recent months from a consortium of CVC Advisers Limited, Nordic Capital and Platinum Ivy of Abu Dhabi.

They are proposing to pay 1,140p per share in cash, up from a previous 985p per share offer which was rejected in April.

Hargreaves Lansdown's board said on Tuesday that it was willing to recommend this new proposal unanimously to shareholders.

Shares jumped 5% on the back of the news.

US retail sales barely grew in May — rising by 0.1% following a downwardly revised 0.2% fall in April.

On an annual basis, retail sales were 2.3% higher than in May 2023, a slowdown on the 2.7% rise recorded in April.

Michael Brown, analyst at Pepperstone, said the report was a further sign that the "US exceptionalism" narrative has likely run its course.

“The May US retail sales report points to further signs of fatigue for the US consumer, with headline sales rising by a meagre 0.1% MoM, up from a downwardly revised 0.2% decline in the prior month.”

The Bank of England is set to leave interest rates unchanged at the 16-year high of 5.25 when it meets this Thursday with most analysts expecting a cut only in August.

Most economists think it is very unlikely that the Bank of England would be willing to start cutting interest rates in the middle of an election campaign.

Threadneedle is in a holding position as it abides by the rules of the pre-election campaign period, meaning its policymakers cannot make any speeches or public statements. This period of silence makes a rate cut in June an unlikely move.

Sandra Horsfield, an economist for Investec, said this matters because were policymakers to “surprise the market” with its decision on Thursday, it would not be in a position to “correct any misinterpretations” about its rates decision until after the general election, which is on 4 July.

“Why rock the boat, when there is no need for haste and no opportunity to steady it?,” she asked.

Interest rates are currently sitting at 5.25% and have been held at this level since August 2023.

Read the full article here

US stock markets are hovering around record highs ahead of retail sales data, and commentary from a number of Federal Reserve officials.

Comments from Federal Reserve officials will be scrutinised for clues on how the central bank’s members view the current economic situation and path ahead for monetary policy.

France’s stock market has become the least favourite in Europe, according to a poll of fund managers by Bank of America.

Bank of America conducted the survey from June 7 to June 13, encompassing the majority of last week’s drop, when the Cac 40 fell by the most in more than two years and wiped out $258bn (£203bn) in market capitalisation.

BofA strategist Andreas Bruckner said: “France has turned into investors’ most unloved European equity market.”

Oil prices held onto their biggest advance in a week amid a more buoyant mood on US stock markets.

Brent Crude (BZ=F) was down 0.3% to just below $84 while West Texas Intermediate was down 0.4% near $80.

Both benchmarks gained around 2% on Monday, closing at their highest levels since April. Brent has clambered back from an early-June close of $77.52, though remains off its $90 peaks in mid-April.

BoFA commodity and derivatives strategist Francisco Blanch said in a note:

"The oil market shifted its focus back to fundamentals, which have been soft for some time."

He added that global crude oil inventories and refined product storage in the US and Singapore, among other places, was higher.

Meanwhile, global oil demand growth slowed to 890,000 barrels per day year on year in the first quarter, and data suggests consumption growth likely slowed further in the second quarter, he said in the note.

However, crude inventories are expected to have fallen by 2.3 million barrels in the week to June 14, according to analysts polled by Reuters.

The last week has seen a flurry of manifestos outlining what the various parties will do should they win the election. State pension has been a key area, with pledges to support the triple lock coming early in the campaign.

The Conservatives then went one step further with their triple lock plus. Under the pledge, the personal allowance for pensioners will rise every year, so that someone reliant on the full new state pension (currently around £11,500 pa) won’t pay tax on it.

It’s a strong response to the issue of frozen tax thresholds pulling more pensioners into tax-paying territory. It will be welcomed by pensioners who have had their budgets squeezed by the cost of living crisis. However, others will question whether a state pension system that is already under pressure can withstand the extra cost.

But what else are the parties offering pensioners?

Read here for more

Investor confidence in Germany’s economy improved less than anticipated, casting doubts over the country’s rebound from a slump at the end of last year.

An expectations gauge by the ZEW institute rose to 47.5 in June from 47.1 in May — below forecasts for a reading of 50.

While it was the 11th monthly increase, it falls short of the 50 forecast in a Bloomberg survey. A measure of current conditions fell slightly, defying a predicted uptick.

Zew president Achim Wamback said:

Ashtead Group was the top loser on the FTSE 100 this morning, dropping 3.5% after the plant hire forecast a slower growth in annual group rental revenue for fiscal 2025.

Despite the softer performance, it has still grown its annual dividend for yet another consecutive year.

The company said it has confidence in its latest strategic growth plan and still sees big growth drivers in North America.

Russ Mould, investment director at AJ Bell, said:

Inflation across the eurozone accelerated last month, up to 2.6% in the year to May from 2.4%.

This was according to statistics body Eurostat, which confirmed its flash estimate at the end of May.

It comes as the European Central Bank (ECB) interest rates two weeks ago as inflation had fallen close to its 2% target.

Core inflation, which strips out energy, food, alcohol & tobacco, rose to 2.9% from 2.7%. This figure was also in line with initial estimates.

Office of Rail and Road data revealed today that the percentage of train journeys made using season tickets has fallen to a record low.

These tickets accounted for just 13% of the 1.6 billion journeys taken on Britain's railways in the year to the end of March.

This is down from 15% during the previous year, and is the lowest percentage in records dating back to 1987.

Around a third of train journeys before COVID restrictions began in March 2020 were made using season tickets. The reduction since then has been driven by the increase in working from home.

The number of individuals and businesses in insolvency in the UK has slowed thanks to pressures easing from rising costs.

Official data from the Insolvency Service showed that 9,266 people entered insolvency across England and Wales last month, a 4% drop compared with April.

This was also 3% more than a year ago.

There were a total of 604 bankruptcies, 3,716 debt relief orders (DROs) and 4,946 individual voluntary arrangements (IVAs).

Company insolvencies fell by 6% month-on-month to 2,006, some 21% lower than in May 2023.

Benjamin Wiles, managing director at Kroll, said:

Unite the Union are planning to protest about Whitbread’s plans to cut 1,500 jobs.

The union sayid Whitbread have refused to consult with them since the announcement in April, neither have they answered basic questions on the redundancy process.

Unite general secretary Sharon Graham said:

Premier Inn owner Whitbread (WTB.L) said it is confident about the year ahead as it increased sales and cut costs amid falling inflation.

Whitbread’s shares jumped by as much as 4.6% on Tuesday morning, as investors welcomed the news that UK trading strengthened over the last quarter.

The Bedfordshire-headquartered group grew its total sales by 1% to £739m in the 13 weeks to 30 May 2024, compared to the same period the year before. Sales were “driven by improved UK trading and continued progress in Germany.”

Its Premier Inn business in Germany reported a 15% increase in total sales.

Dominic Paul, chief executive of the hospitality group, said: “Whilst the normal booking pattern means our forward visibility remains limited, our forward booked position is positive and we remain confident in the full-year outlook.

“This reflects a more encouraging trading performance in the UK, our strong commercial programme and increased cost efficiencies, as well as good progress in Germany.”

Paul added that Whitbread is on track with the programme to restructure its food and beverage business announced earlier this year, which will close or convert more than 200 restaurants and cut about 1,500 jobs.

Its £150m share buyback is on track, he said, with 3.2m shares purchased so far for £96m.

The dollar is flirting with a new high of 2024 thanks to elevated US Treasury yields and investors turning to safe haven assets amid political uncertainty in Europe.

The Bloomberg Dollar Spot Index is a fraction away from levels last seen in November as technical indicators show the greenback’s strength has room to run.

Rodrigo Catril, a strategist at National Australia Bank Ltd. in Sydney told Bloomberg:

Traders will also be keeping a close eye on the looming US election, which is poised to inject fresh uncertainty into markets.

Wind energy is set to overtake gas as the UK's main source of electricity for the first time this year.

Research from Offshore Energies UK revealed that wind outperformed gas during the first four months of 2024. Experts are also predicting that this trend will continue throughout the year.

It comes as the country moves increasingly towards green energy.

The report said:

Last year, wind generated 82 terawatt hours (TWh) of power compared with 96TWh from gas and 37TWh from nuclear.

The report added:

Australia’s central bank held interest rates steady as expected overnight but issued a stark warning that there were still reasons to be vigilant against inflation risks.

In its June policy meeting, the Reserve Bank of Australia (RBA) kept rates at a 12-year high of 4.35%, where they have been since a hike in November last year.

It repeated that it was not ruling anything in or out on policy.

The RBA Board said:

The Australian dollar was little changed on the back of the news at $0.6612 as the statement contained few surprises.

Money markets pared back the chance of a rate cut in December to from 65% to 55% before the announ.

Sticking with this morning's Kantar data...

In the 12 weeks to 9 June, online supermarket Ocado was again the fastest growing supermarket. It won markets share along with Tesco and Sainsbury's

Discount retailer Lidl grew its market share to 8.1%, while rival Aldi has 10% of the market.

Morrisons sales rose by 1.1%. giving a share of 8.7%, while Iceland’s sales rose 4.4%, giving it 2.4% of the market.

Asda was the laggard once again, losing 90 basis points of share on a year-on-year basis.

UK grocery inflation fell for the sixteenth month in a row in June. This was, however, the slowest increase since June 2022.

According to Kantar, annual grocery price inflation came in at 2.1% in the month to 9 June, with declining prices of toilet roll, butter and milk down from 2.4% in the previous four-week period.

Fraser McKevitt, head of retail and consumer insight at Kantar, said:

Stocks in Asia climbed higher on Tuesday, tracking a Wall Street rally last night after a sluggish start to the session.

The Nikkei (^N225) rose 1% on the day in Japan, while the Hang Seng (^HSI) edged 0.04% higher in Hong Kong. The Shanghai Composite (000001.SS) was 0.5% up by the end of the session.

Meanwhile, the Australian dollar held steady after its central bank offered few surprises in its policy decision. The Reserve Bank of Australia (RBA) kept rates at a 12-year high of 4.35%, as expected, but warned there were still reasons to be vigilant against inflation risks.

Traders pared back on bets of a rate cut this year in the wake of the decision.

On Wall Street, the Nasdaq Composite (^IXIC) and S&P 500 (^GSPC) hit record highs.

The Dow Jones (^DJI) rose 0.5% to 38,778.10, the S&P 500 gained 0.8% to 5,473.23, and the Nasdaq Composite gained 1%, to 17,857.02.

In the bond market, the yield on the 10-year Treasury bonds climbed to 4.29% from 4.22% late on Friday.

Good morning and welcome back to our markets live blog. As always, we will be taking a look at what's moving markets and happening across the global economy.

Here's a quick look at what's on the agenda for today:

• 7am: Trading updates: Ashtead Group, De La Rue, SThree

• 8am: Kantar grocery price inflation

• 10am: Eurozone inflation rate for May (final estimate)

• 10am: ZEW index of German economic sentiment

• 1pm: Unite protest ahead of Whitbread AGM

• 1.30pm: US retail sales for May

• 2:15pm: US Industrial Production

• 2.30pm: Whitbread AGM