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European markets mixed and US up ahead key week of earnings

Traders work on the floor of the New York Stock Exchange during afternoon trading on February 05, 2024 in New York City. The stock market closed down with the Dow Jones leading the way, closing more than 250 points lower amid speculation that the federal reserve is unlikely to make rate cuts in March. (Photo by Michael M. Santiago/Getty Images)
US indexes ticked higher building on euphoric all-time highs for the S&P 500 at the end of last week, spurred on by megacap company earning reports. (Michael M. Santiago via Getty Images)

It was a mixed Monday for European stocks, with the FTSE bucking the upwards trend to trade flat by the close. Meanwhile, US indexes ticked higher building on euphoric all-time highs for the S&P 500 at the end of last week, spurred on by megacap company earning reports.

  • The FTSE 100 (^FTSE) was flat by the closing bell, while Germany's DAX (^GDAXI) and Paris's CAC (^FCHI) both rose around 0.6% and 0.5% higher respectively.

  • US stocks were higher by mid-morning, with the S&P 500 (^GSPC) up 0.4%, and the Dow (^DJI) and the Nasdaq (^IXIC) rose 0.5% and 0.4%.

  • The moves follow gains, as the market embraced a clutch of better-than-expected corporate results, with big tech names driving the lion's share last week. Eyes are on the next batch of quarterly reports, with John Deere (DE), Coca-Cola (KO), Airbnb (ABNB), and Kraft Heinz (KHC) serving as highlights on the docket in coming days.

  • The moves in Europe came as high street cosmetics stalwart The Body Shop looked set to slip into administration, according to reports from Sky News which dropped over the weekend – a move which could wipe out thousands of jobs.

  • The report said Body Shop has lined up FRP Advisory to handle the insolvency process, adding that sources said the insolvency process was focused on UK operation as opposed to its global franchise partners. Yahoo contacted The Body Shop for comment but didn't hear back before publication.

  • Radio 5 had the former CEO, David Boynton speaking, who said: "There are people speculating that the potential administration might be a means of removing some of the obligations in closing less profitable markets."

Follow along for live updates throughout the day:

  • Signing off

    That's all from me for today, thanks for reading!

  • US stocks still muted

    US stocks trading a little higher now after a flat open

  • FTSE rallies

    The FTSE 100 has suddenly rallied a bit, having traded lower for most of the day. Rally seems to be being driven by retail stocks like Burberry and Frasers Group. Data from Hargreaves Lansdown:

    Top FTSE 100 stocks on Monday
    Top FTSE 100 stocks on Monday
  • One-in-three families in Britain have less than £1,000 in savings

    From the Yahoo Finance UK desk today we have this:

    Over 11 million people in Britain don’t have basic ‘rainy day’ savings of at least £1,000, as households with low savings are more likely to rely on credit cards, overdrafts, or borrowed money to meet daily expenses.

    A report by the Resolution Foundation said that one-in-three working age families (11.2 million) don’t have basic level ‘rainy day’ savings of at least £1,000. This increases to almost half of low-income families as the cost of living crisis makes it even harder to save money for emergencies.

    Some 12% revealed they had less than £100 and 5% did not have any savings at all.

    Families with low savings were more than twice as likely to have used credit cards, overdrafts, or borrowed money from formal lenders in order to meet daily expenses compared to those with more than £1,000 of savings.

    Read more: One-in-three families in Britain have less than £1,000 in savings 

  • NatWest lagging

    NatWest is among the biggest fallers in the FTSE 100 today ahead of its earnings release on Friday. It fell about 2% in morning trade in London as news broke that it is preparing to pay out about £350m in staff bonuses, according to Sky News.

    The bank is predicted to report a pre-tax profit of £6bn for the year on Friday, with an income totalling £14.6bn, according to analysts' consensus from November.

    The report comes after market jitters in October when the bank lowered its forecast net interest margin (NIM) for the year, causing its share price to drop.

  • FTSE falls slightly

    The FTSE has fallen slightly in early trade. Here are the stocks weighing it down:

    Screen grab from Hargreaves Lansdown
    Screen grab from Hargreaves Lansdown
  • Rate cuts still in focus

    Here's Neil Wilson from Finalto on what markets will be looking at this week:

    Markets remain focused on when central banks will start to cut rates. That puts a lot of emphasis on Tuesday’s inflation data from the US. In December the CPI outstripped forecasts at 3.4% vs 3.2% anticipated, whilst the stickiness of core inflation remained evident as this came in at 3.9%, down marginally from 4.0% in November.

    The data is key to the Fed’s decision on when to cut rates – last week’s services PMI prices index pointed to the resilience of inflation and the problems of the ‘Last Mile’; markets have been dialling back expectations for a March cut and it is possible the Fed could wait even longer.

  • Some sectors are hiring urgently

    Also from CIPD, despite the tightness mentioned in the report some sectors are struggling to recruit:

    As in previous Labour Market Outlook reports, healthcare (39%), education (34%), and public administration and other public sector (31%) are all anticipating significant problems in filling vacancies in the next six months at the highest rate.

  • Smaller pay rises on the horizon in 2024

    Central bankers might be breathing a sigh of relief at a new report from Chartered Institute of Personnel and Development (CIPD) which shows UK employers planning meagre pay rises in 2024 — the lowest increases since the start of the pandemic.

    Tightness in the labour market appears to have eased, and with that competition for staff has reduced meaning workers' case in pay negotiations is weaker. Employers are also choosing the shoulder the burden of higher wages in different ways.

    Pay increases, which is one of the factors the Bank of England looks at when deciding how to set interest rates, have held at 5% for more than a year, but are expected to slip to 4% in 2024. The difference is evident across both the public and private sector, the report said.

    Chart: CIPD
    Chart: CIPD
  • Overnight in Asia

    Chinese stocks have had a confusing run-up to the year of the dragon, with the Hang Seng (^HSI) having rallied and then tanked last week on news of government intervention in markets and a subsequent poor data release.

    The Hang Seng finished 0.8% lower on Friday and has slipped 7.6% so far this calendar year on prolonged worries about China's stalling growth. Chinese markets were shut today for the Lunar new year holiday.

    The Nikkei (^N225) in Japan rose a cautious 0.1%.

  • Good morning!

    Hello from London! Seems to have been a mixed day of trade in Asia, and as Europe wakes up the FTSE is having a sleepy start to the week too. First up we have the low down on the potential administration of The Body Shop, the bath bomb kings of the high street. Let's get to it.

Watch: What is inflation and why is it important?

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