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LIVE: FTSE and US markets rise as inflation data raises green flags

WASHINGTON, DC - SEPTEMBER 28: Federal Reserve Board Chairman Jerome Powell speaks during a teacher town hall meeting at the Federal Reserve on September 28, 2023 in Washington, DC. The Federal Reserve hosted the event with educators from the Richmond Federal Reserve district to discuss the economy. (Photo by Alex Wong/Getty Images)
The FTSE, European and US markets were up on Friday after data showed inflation cooling in both the eurozone and the US. Photo: Alex Wong/Getty Images (Alex Wong via Getty Images)

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.

Follow along for live updates:

Live coverage is over
  • Lucy Harley-mckeown

    After all that data, that's me done for the day. Thanks for reading!

  • Lucy Harley-mckeown

    Here are our trending tickers to watch today:

    Trending tickers: Tesla | AMD | JD Sport | Severn Trent

    Yahoo FinanceTickers we're watching on Friday.

  • Lucy Harley-mckeown

    A new FCA release just dropped on reforming leasehold regs for insurance in the housing market. Here's what they had to say:

    From the new year, insurance firms will be forced to act in leaseholders’ best interests, treat leaseholders as customers when designing products and will be banned from recommending an insurance policy based on commission or remuneration levels.

    Insurers will also be required to ensure that their insurance policies provide fair value to leaseholders and provide important information about their policy and its pricing, including the detail of any commission paid, for leaseholders.

    The FCA’s action follows its review of the multi-occupancy buildings insurance market, which found that leasehold buildings insurance premiums had risen significantly since the Grenfell tragedy, with leaseholders facing substantially higher costs and poor value.

  • Lucy Harley-mckeown

    Here's an update on the pound from our reporter Rabina Khan:

    The pound saw a 0.3% increase against the US dollar on Friday morning, reaching the $1.22 mark. The uptick reflects investor confidence in the UK's economic recovery. Earlier this week it had sunk as low as $1.21 as investors parse an environment where interest rates could stay higher for longer.

    Any upside for the pound will be well received by traders as it has been on the decline since mid-July.

    Against the euro, the sterling stands at €1.2236.

  • Lucy Harley-mckeown

    JD Sports (JD.L) is leading risers in the FTSE this morning, up 5.6%, apparently on the back of stellar results from sports brand Nike, which reported after the closing bell on Thursday.

    Nike's revenue for Q1 was up 2% to $12.9bn from $12.7bn the year prior, but net income of $1.5bn was down 1%.

    JD Sports has been in good favour in recent weeks following a good set of financial results. It posted profit before tax of £375.2m for the 26 weeks to July 29, 2023, up 25.8% year on year from £298.3m in the same period last year. At the time it said it is on track to open over 200 new stores across the world by January 2024.

    JD Sports stock 5-day look,chart: Yahoo Finance UK

  • Lucy Harley-mckeown

    Overnight in the US and Asia

    Friday was a mixed day for Asian stocks, with the Hang Seng (^HSI) being the standout index, rising 2.8% by the closing bell. In contrast, Japan's Nikkei (^N225) fell 0.1% and the SSE composite (000001.SS) rose 0.1%.

    Traders are assessing data from Japan, including Tokyo's inflation rate for September, which rose 2.8% from a year ago. Core inflation, which is generally seen as a better measure because it strips out volatile parts of the economy like fresh food prices, was 2.5%. This was lower than polled by analysts at Reuters who expected a 2.6% increase.

    Indexes closed in the green in the US on Thursday, meanwhile, with the S&P 500 (^GSPC) up 0.6%, the Dow (^DJI) gaining 0.4% and the Nasdaq (^IXIC) rising 0.8%.

    The personal consumption expenditures price index reading is due later today. The PCE reading is the Federal Reserve’s preferred inflation metric.

  • Lucy Harley-mckeown

    Hello! Lucy Harley-McKeown here, starting the day with a coffee-fuelled GDP update. Markets have just opened and it seems to be a green start for UK equities. Let's get to it.

Watch: World Cup drinkers boost UK GDP