Yahoo Finance LIVE: FTSE and US markets rise as inflation data raises green flags
The FTSE 100 (^FTSE) European, and US markets rose on Friday following a fresh rash of data that showed inflation across the eurozone and US cooling and the UK's economy had grown in Q2.
By the afternoon, London's premier index was up 0.5%, the DAX (^GDAXI) in Germany rose 1.1% and France's CAC (^FCHI) gained 1%.
US equities followed Europe higher at the open, with the S&P 500 (^GSPC) climbing 0.7% in early trade, the Dow (^DJI) rising 0.3% and the tech-heavy Nasdaq (^IXIC) moving 1.3% higher. Top stocks in the Nasdaq on Friday are Datadog (DDOG) and Zscaler (ZS).
The Federal Reserve's preferred inflation measure showed the slowest increase in prices since September 2021 during August, another signal that the era of high central bank interest rates might be slowly coming to an end.
The Personal Consumption Expenditures (PCE) Index grew 3.5% year over year in August, up from 3.4% the month prior and in line with expectations. "Core" PCE, which excludes the volatile food and energy categories, grew 3.9%, down from 4.1% from the month prior and in line with what economists surveyed by Bloomberg had expected.
On a monthly basis, core PCE rose 0.1% in August, down from 0.2% in July.
Elsewhere, year-on-year, eurozone inflation reading for consumer price inflation in September hit 4.3% — lower than the 4.5% that had been slated and down from a previous reading of 5.2%. Meanwhile core inflation was at 4.5% versus an expected 4.8%. This is the lowest level of inflation in two years, since October 2021.
New data also showed that the UK's economy grew 0.2% in the second quarter, with gross domestic product (GDP) growth driven by a 1.2% bump for the production sector due to falling input prices.
These figures met expectations and followed a bump of 0.3% in the first quarter, where growth was revised up from 0.1%.
The more domestically-linked FTSE 250 (^FTMC) jumped around 1.5% by the afternoon and the pound was flat against the dollar (GBPUSD=X) to trade at $1.22. The dollar strengthened after the latest inflation figures.
Read more: UK economy grows by 0.2% in second quarter
“We know that the British economy recovered faster from the pandemic than anyone previously thought and data out today once again proves the doubters wrong," said chancellor Jeremy Hunt.
"We were among the fastest countries in the G7 to recover from the pandemic and since 2020 we have grown faster than France and Germany."
“The best way to continue this growth is to stick to our plan to halve inflation this year, with the IMF [International Monetary Fund] forecasting that we will grow more than Germany, France, and Italy in the longer term," he added.
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