Wall Street mixed as investors parsed corporate earnings and awaited economic data. (NDZ/STAR MAX/IPx, Associated Press)
The FTSE and European stocks were mixed on Tuesday with London losing its earlier boost from lower than expected UK government borrowing figures that fuelled hopes of tax cuts for consumers.
The FTSE 100 (^FTSE) slipped 0.1% to 7,479 points during afternoon trading, while the CAC 40 (^FCHI) in Paris lost 0.5% to 7,376 points. In Germany, the DAX (^GDAXI) fell 0.3% to 16,638. The Stoxx 600 (STOXX) fell 0.3%.
UK public sector borrowing rose by £7.8bn in December, about half the borrowing made in the same month in 2022, according to the Office for National Statistics on Tuesday. It is the lowest for the month borrowing since 2019 and significantly lower than the £14bn expected by the Office for Budget Responsibility.
In Wall Street, US stocks hit pause on a record-setting rally as focus turned to the day's stream of earnings for insight into the health of corporate America and the economy.
The Dow Jones (^DJI) lost 0.2% to 37,923 points. The S&P 500 (^GSPC) climbed 0.1% to 4,854 points and the tech-heavy NASDAQ (^IXIC), gained 0.1% to 15,378.
Hong Kong stocks rebounded Tuesday to lead gains in Asia markets, while Japan’s Nikkei 225 index was slightly lower after the Bank of Japan kept its monetary policy unchanged in its first policy meeting of the year.
The Hang Seng (^HSI) in Hong Kong rose 2.3% to 15,315 while the Shanghai Composite (000001.SS) climbed 0.5% to 2,770 points. Tokyo’s Nikkei 225 (^N225) lost almost 0.1% to close at 36,517 points.
Chinese stocks struggled as speculation of a huge rescue package from Beijing underwhelmed investors worried about the shaky economy.
Meanwhile, oil prices were little changed as traders weighed a host of conflicting supply and demand worries, from rising tensions in the Middle East to cold weather woes disrupting production in the United States.
West Texas Intermediate (CL=F) slipped 0.6% and was trading at $74 per barrel. Brent (BZ=F) crude climbed 0.7% to $79 per barrel.
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Pedro Goncalves
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Pedro Goncalves
Amazon fined in France for ‘excessive’ surveillance of workers
Amazon (AMZN)has been fined €32m £27m) in France for what the country’s data watchdog called “excessive” surveillance of its warehouse workers.
The CNIL has imposed the fine on Amazon France Logistique, which manages the e-commerce giant’s warehouses, over the data recorded by handheld scanners used by staff.
The watchdog said the implementation of the system measured interruptions in activity so precisely that it led workers to have to justify each break or interruption, and was in fact illegal.
The CNIL called the system “excessive” and also raised concerns over Amazon keeping the data collected on workers for 31 days.
In its findings, the watchdog said it did not question the need for Amazon to have some sort of monitoring system in place, given the scale and size of the company and its high performance objectives, but said it considered the retention of all the data in question and resulting statistical indicators to be “disproportionate”.
Pedro Goncalves
Abrdn to cut hundreds of jobs amid cost-cutting drive
Abrdn, the Edinburgh-headquartered fund group, is set to announce roughly 500 job cuts, with the cost-cutting drive first reported by Sky News.
Abdrn is expected to unveil the cuts alongside a trading update by chief executive Steve Bird on Wednesday.
The firm, which held £496bn in assets under management when it last reported in August, has seen continuous pressure to cut costs as its performance has been underwhelming.
Last month, the Financial Times reported that abrdn was cutting employee benefits such as paid parental leave in an effort to exert a firmer grip on costs.
Analysts expect the company - formed from the 2017 merger of Aberdeen Asset Management and Standard Life - to report that it has suffered billions of pounds in additional fund outflows during the second half of 2023.
Pedro Goncalves
Jeremy Hunt meets top UK bank bosses over plans to boost City
Jeremy Hunt has met the UK’s biggest banks as part of efforts among the Government to boost interest in the City.
The chancellor and Bim Afolami, the economic secretary to the Treasury, met with bosses at Barclays, HSBC, Lloyds, NatWest, Santander UK and the London Stock Exchange Group on Tuesday morning.
It follows recent efforts to improve competitiveness in the financial services industry amid a dearth in stock market listings and a slew of listed companies leaving London markets.
The meeting, held in Downing Street, saw the leaders discuss the outlook for the country’s economic and banking sector, the Treasury said.
Top bank bosses, including Barclays’ chief executive CS Venkatakrishnan and Lloyds chief executive Charlie Nunn, gave their views on what they thought the main opportunities for the banking sector were and how to make the UK industry more competitive.
Pedro Goncalves
Gold remains above $2,000 as silver slips
Gold is trading at above $2000. (Reuters / Reuters)
Gold (GC=F)has edged slightly higher despite no major market shifts, according to David Morrison, senior market analyst at Trade Nation.
Gold is a touch firmer this morning and continues to oscillate in the middle of a trading range between $2,050 and $2,000. Bulls should draw some comfort from the fact that gold held around here yesterday even as silver slumped below $22 to hit its lowest level since mid-November.
That sell-off could have been enough for gold to retest support at $2,000 as it did last Wednesday. Silver subsequently rallied, and is firmer again this morning although there’s not a lot of clear water between $22 and current levels. The Dollar Index is little-changed, despite a rally in the Japanese yen following last night’s Bank of Japan decision to keep rates unchanged at -0.10%, as expected. The 10-year US Treasury note is a tad firmer, but precious metals appear unconcerned for now.
Pedro Goncalves
Crest Nicholson boss leaves as profits plunge
Crest Nicholson completed 2,020 new homes. (Tony Smith)
The boss of housebuilder Crest Nicholson is stepping down after the company revealed a 70% plunge in profits in a year.
Crest Nicholson said that its adjusted pre-tax profit was £41.4m in the year to the end of October, down 70% from £137.8m a year earlier.
Peter Truscott will be replaced as chief executive by Martyn Clark, now chief commercial officer at rival Persimmon (PSN.L), later this year.
Crest Nicholson completed 2,020 new homes, down about a quarter from 2,734 the year before, leading to a 28% drop in revenue to £657.5m
The struggling housebuilder said that it had put aside £13m to cover a legal claim for a 2021 fire in one of its low-rises.
“Crest Nicholson’s results for the year to October 2023 contained no new, nasty surprises as last week’s profit warning had already lowered expectations, so its share price has hardly flinched in the face of a sharp drop in completions, sales and profits,” AJ Bell investment director Russ Mould, said.
Pedro Goncalves
Ryanair launches partnership with online travel agent
Ryanair (RYA.IR)has launched its first partnership with an online travel agent (OTA) despite repeatedly branding the companies “pirates”.
The Dublin-based airline said it has agreed a deal with loveholidays to offer its flights as part of package trips.
Ryanair has previously strongly complained about OTAs selling its flights without permission.
Last week it highlighted companies such as Kiwi.com, Opodo, eDreams and lastminute.com overcharging passengers.
There is also an issue with passengers’ contact details not being passed on, making it difficult to provide travel updates and process refunds.
Ryanair insisted its partnership with loveholidays is “transparent” as travellers will not pay more than if they book direct, and the airline will receive accurate contact details.
Pedro Goncalves
China weighs stock market rescue package backed by $278bn
Beijing wants to revive the country's slumping stock market. (REUTERS / Reuters)
Authorities in China are considering taking steps to stabilise the slumping Chinese stock market, Bloomberg reported.
Policymakers are seeking to mobilise about RMB2trn (£218bn/$278bn), mainly from the offshore accounts of Chinese state-owned enterprises, as part of a stabilisation fund to buy shares onshore through the Hong Kong exchange link.
They have also earmarked at least RMB300bn of local funds to invest in onshore shares through China Securities Finance Corp. or Central Huijin Investment Ltd, citing familiar with the situation said.
Pedro Goncalves
ECB expected to hold interest rates on Thursday
Gabriele Foà, portfolio manager at Algebris Investments, expects the European Central Bank to keep interest rates unchanged this Thursday.
“The ECB will likely hold rates this week, but market focus is on guidance for the timing and magnitude of forthcoming cuts. The meeting offers no new projections, but questions will focus on the committee’s current assessment of recent data, which saw inflation and gas prices falling further. Tuesday’s Bank Lending Survey and Wednesdays’ PMIs will give key insights into the direction of travel the Bank may now take. At this point, markets only see 16% odds for a March cut.”
Pedro Goncalves
UK public debt slows and raises hopes for tax cuts
The UK government borrowed much less than expected last month, fuelling hopes that chancellor Jeremy Hunt will have room for tax cuts in the spring budget.
Public sector borrowing rose by £7.8bn in December, about half the borrowing made in the same month in 2022, according to figures from the Office for National Statistics (ONS).
It is the lowest for the month borrowing since 2019 and significantly lower than the £14bn expected by the Office for Budget Responsibility (OBR).
Primark festive sales rise after warm autumn weather hit
The owner of budget fashion chain Primark posted a rise in sales over its Christmas quarter as higher prices helped it overcome a hit from warm autumn weather.
Associated British Foods (ABF.L) said Primark sales grew 2.1% on a like-for-like basis in the 16 weeks to January 6, with total revenues at the retailer up 7.9%.
In the UK, comparable store sales rose by 3.8% as it said strong growth in the run-up to Christmas helped offset a knock from unusually warm autumn weather at the start of the quarter.
The group said the Primark sales rise was driven by higher average selling prices as well as strong demand for Christmas ranges and lines such as its collection designed in collaboration with singer Rita Ora.
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