Wall Street was in the red on Thursday afternoon while European stocks and the FTSE 100 were mixed as second-quarter US GDP figures came in unchanged at 2.1% and latest jobless claims rose.
Investors were also keeping across oil prices, which reversed earlier gains, after hitting their highest level this year, adding to inflation concerns of central banks. The price support for Brent and US crude followed an update on inventories at a key storage hub in Cushing, Oklahoma. The EIA said stocks fell to 22 million barrels in the fourth week of September, close to the operational minimum.
FTSE and European stocks
The FTSE 100 (^FTSE) closed down 0.12% at 7,602.48 points, while the CAC 40 (^FCHI) in Paris ended 0.62% lower at 7,115.83 points. In Germany, the DAX (^GDAXI) gained 0.70% to 15,323.50 points. Meanwhile, the STOXX Europe 600 Index (^STOXX) gained 0.35%.
The FTSE 100 was dragged down by Barratt Developments (BDEV.L) with its stock down 6% on ex-dividend day – and also Phoenix Group (PHNX.L), after its interim financial report. Shares in mining stocks and energy giant Shell (SHEL), meanwhile, were among the top index risers.
US and Asia markets
Wall Street will be assessing the latest GDP estimate and also the latest jobless claims data today, which showed claims last week rose to 204,000, compared with the 215,000 expected.
Investors will also be digesting an update on pending home sales, which plunged 7.1% in August from the month before, according to the National Association of Realtors. They were down from the 0.9% monthly increase recorded in July.
The result was far worse than the 1.0% decline that Bloomberg economists had estimated and was widespread. Every region recorded a monthly and year-over-year drop. On a yearly basis, pending transactions were down by 18.7%.
Meanwhile, in bonds, the rapid rise in the 10-year Treasury yield (^TNX) continued as it topped 4.6%, trading at levels not seen in over 15 years.
In Asia, Japan’s Nikkei 225 (^N225) fell 1.54% to close at 31,872.52 points, while the Hang Seng (^HSI) in Hong Kong fell 1.36% to 17,372.96. In mainland China, the Shanghai Composite (000001.SS) went up 0.11% to 3,110.98 points.
Meanwhile, China’s economy is expected to expand slightly more than 5% this year, according to an advisor to the People’s Bank of China.
It comes a day after HSBC lowered its growth forecast for China’s gross domestic product for this year from 5.3% to 4.9%, and its 2024 GDP growth forecast from 4.9% to 4.6%.
Sterling is on track for its worst month since the fiscal fiasco around the mini-Budget last year as the increased risk of a recession in the UK has weighed on investors.
Matthew Ryan, head of market strategy at financial services firm Ebury, said that while the moves can be largely attributed to a strong greenback, both the pound and euro are currently underperforming their G10 counterparts.
“News out of the euro area has not been much better. While the composite PMI of business activity came in above consensus in September, the index remained comfortably below the level of 50 representing contraction (47.1).”
Crude oil prices extended gains again on Thursday mornings as inventories at the largest storage hub in the US fell toward levels nearing operational minimums. However, oil prices slipped back into the red in afternoon London trade.
At the time of writing, US crude oil, or West Texas Intermediate (CL=F), fell 1.44% to trade at $92.33 a barrel, while Brent crude (BZ=F) declined 0.99% to $95.59 a barrel after hovering above $97 this morning. Brent was last at that level in November 2022, while US crude was last at the $94 level, which it hit today, in August 2022.
The high oil prices support the case that crude could hit $100 a barrel by the end of the year, with Goldman Sachs also recently raising its price target to $100 for the next 12 months.
"Underlying oil price gains have catapulted Shell and BP towards the top of the FTSE 100,” Victoria Scholar also noted.
Avacta was the first to update investors after it reported higher losses in the first half despite a doubling of revenues. The update sent shares in the company down nearly 2%, at the time of writing.
Revenues totalled £11.9m in the six months to 30 June, up from £5.5m the previous year, while falling income from its Therapeutics division was offset by a big jump in Diagnostics.
Results were further boosted by a full six months of trading for Launch Diagnostics, which it acquired last year, and one month from the recent acquisition of Coris.
Meanwhile, Nike is set to report its fiscal first-quarter earnings with Wall Street analysts expecting the sports apparel giant to post revenue of approximately $13bn for the quarter with earnings per share forecasted at $0.75 on an adjusted basis.
In addition, analysts estimate Nike's gross margin for the quarter to come in at 43.7%, compared to 44.3% in the same period last year.
On Friday, Carnival (CCL) will be reporting its latest financial results. Its stock was up 2.22% ahead of the update on Thursday.
Watch: Micron earnings top estimates, issues mixed guidance