FTSE and Wall Street higher as traders enter their last full week of trading. (Erik Pendzich)
The FTSE bounced back while European stocks closed in the red as investors gear up for more global economic data this week including the latest UK inflation figures on Wednesday.
The FTSE 100 (^FTSE) rose 0.5% to close at 7,610 points, while the CAC 40 (^FCHI) in Paris lost 0.5% to 7,551 points. In Germany, the DAX (^GDAXI) retreated 0.7% to 16,663.
Europe’s Stoxx 600 (^STOXX) finished in the red after closing out a fifth straight winning week on Friday.
Data due this week includes UK, euro zone, and US inflation readings, along with GDP estimates from Britain and the United States.
Across the pond, US stocks edged higher to start the last full trading week of the year, with the Dow riding toward another record even as Federal Reserve officials tried to rein in high expectations for interest rate cuts.
The Dow Jones (^DJI) rose 0.2% to 37,382 points after closing Friday at a fresh all-time high. The S&P 500 (^GSPC) climbed 0.4% to 4,739 points and the tech-heavy NASDAQ (^IXIC) rose 0.3% to 14,861.
The US Federal Reserve now sees 75 basis points of rate cuts coming in 2024, which accounts for one more rate cut than had been projected in September. That helped drive a rally in US stocks with the Dow reaching a record and the major indexes posting a seventh-straight winning week.
In Asia, Tokyo’s Nikkei 225 (^N225) lost 0.6% to 32,758 points, while the Hang Seng (^HSI) in Hong Kong retreated 1% to 16,629. The Shanghai Composite (000001.SS) fell 0.4% to 2,930 points.
The pound (GBPUSD=X) was slightly lower against the dollar, with sterling trading at $1.2659.
Sterling (GBPEUR=X) was also lower against the euro, trading at €1.1596.
Meanwhile, Brent crude (BZ=F) pushed higher to hit a two-week high $79.39 per barrel as attacks by the Houthis on ships in the Red Sea raised concerns of oil supply disruption.
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Pedro Goncalves
That is all from us today but do check out our US blog for the latest moving stocks across the pond.
See you all tomorrow,
PHG
Pedro Goncalves
Ben Barringer, technology analyst at Quilter Cheviot, said the cancellation of the Figma deal is a blow to Adobe. He explained:
“Adobe has today ended its proposed acquisition of Figma, having faced significant regulatory scrutiny in relation to the deal and with rulings from the EU Commission and the UK’s Competition and Markets Authority looming. These upcoming decisions had formed a heavy cloud of uncertainty over Adobe, and it has opted to clear the air by terminating the merger.
“The acquisition would have been an expensive move for Adobe, coming in at $20bn due to Figma’s profitability and sales metrics, but the termination will still come as a blow given Figma specialises in collaborative tools for creatives - an area where Adobe already has established but underperforming products. The acquisition could have placed Adobe in a competitive position, but the regulatory pressures appear to have been too much for it to warrant pushing ahead with the deal. Nonetheless, Adobe remains a robust business and the removal of these regulatory challenges alleviates the uncertainties it was due to face.”
Pedro Goncalves
Adobe abandons $20bn acquisition of Figma
Adobe cancels £16bn merger after UK competition probe. (Reuters / Reuters)
Adobe has dropped its plans for a $20bn (£15.8bn) merger with software company Figma after competition investigations by the UK and the EU.
In a statement, the two companies said: “There is no clear path to receive necessary regulatory approvals from the European Commission and the UK Competition and Markets Authority.”
Last month, the CMA warned that the deal would harm competition in product design software by bringing two of the main companies in the sector together.
The European Commission also told Adobe in November that it believed the proposed acquisition of Figma may reduce competition in the global markets.
The US software giant will pay a $1bn termination fee to Figma after the companies said they see “no clear path to receive necessary regulatory approvals”.
“Adobe and Figma strongly disagree with the recent regulatory findings, but we believe it is in our respective best interests to move forward independently,” Shantanu Narayen, CEO of Adobe, wrote in a statement.
“While Adobe and Figma shared a vision to jointly redefine the future of creativity and productivity, we continue to be well positioned to capitalize on our massive market opportunity and mission to change the world through personalized digital experiences.”
Pedro Goncalves
BP pauses all transits through Red Sea
BP (BP.L)will temporarily pause all oil tanker transits through the Red Sea in light of attacks by Yemeni militants.
In a statement, BP said:
“The safety and security of our people and those working on our behalf is BP’s priority.“In light of the deteriorating security situation for shipping in the Red Sea, BP has decided to temporarily pause all transits through the Red Sea.”
Pedro Goncalves
Games Workshop closes deal with Amazon to bring Warhammer to screens
Games Workshop (GAW.L)has finalised a deal with Amazon (AMZN)to make films and TV series based on its Warhammer fantasy games.
The Nottingham company, which creates fantasy miniatures for tabletop games, first reached an agreement in principle with Amazon Content Services.
Games Workshop shares jumped by around 16% when the deal was first announced and lifted another 4% on Monday upon confirmation.
The deal will grant Amazon exclusive TV and film rights to the company’s hit franchise Warhammer 40,000.
Amazon also holds an option to license equivalent rights for other productions in the Warhammer Fantasy universe, after the initial release of Warhammer 40,000 titles.
Pedro Goncalves
Uncertainty will keep interest rates higher, says BoE's Broadbent
Deputy Governor, Monetary Policy of the Bank of England Ben Broadbent. (HENRY NICHOLLS via Getty Images)
Uncertainty about the accuracy of the official data and the scale of wage pressures may force the Bank of England to keep interest rates higher for a longer period.
Bank of England deputy governor Ben Broadbent said Threadneedle Street needs to see a deeper slowdown in wage inflation before it can consider cutting interest rates.
In a speech at the London Business School, he said that the uncertainty created by the data means “the reaction of policy is likely to be somewhat more delayed than in a world of perfect and complete information”.
Labor market figures from the Office for National Statistics are being re-examined after a collapse in response rates to its key Labour Force Survey.
Last week, the latest labour force data showed that wage growth including bonuses fell to 7.2% from 8%.
The FTSE 100 (^FTSE) made an indifferent start to the final week of trading before Christmas as, having fired the starting gun on expectations for interest rate cuts at its latest meeting, the Federal Reserve attempted to walk that back at the end of last week, said AJ Bell investment director Russ Mould. He added:
“This leaves markets somewhat in limbo – although GDP and core inflation figures from the US later this week may help give stocks some direction.
“The Bank of England was notably more hawkish on rates than its US counterpart. The latest inflation figures may help determine to what extent investors take that seriously.
“There was a reminder that Rolls-Royce (RR.L) – one of the best performing stocks anywhere this year – has more strings to its bow than making engines for airplanes, amid newspaper reports it is in talks to provide small modular reactor technology to Ukraine as the country looks to build out its nuclear power capacity. The modest move in the share price suggests shareholders are not expecting any near-term impact on profit or cash flow, however.
“Bowling alley operator Hollywood Bowl (BOWL.L)reported a strong set of results, unveiled a £10 million share buyback and struck a confident note on the outlook. Bowling remains an affordable treat which gives people a release from the cares of everyday life and the performance of the nascent Canadian operation will only provide further encouragement for the company to pursue its expansion plans.”
Pedro Goncalves
Trending tickers: IBM | Vodafone | DocuSign | Unilever
IBM was among the tickers trending on Monday. (Reuters / Reuters)
IBM (IBM) - Software multinational IBM said on Monday it is acquiring business units from Software AG in a deal worth €2.13bn (£1.8bn, $2.3bn) in cash.
Vodafone (VOD.L) - Vodafone stock was leading the FTSE 100 (^FTSE) on Monday morning after a joint-venture proposal from telecom firm Iliad in Italy.
Unilever (ULVR.L) - Pharma company Unilever is selling Elida Beauty, a beauty and personal care division of its business, to Yellow Wood Partners.
DocuSign (DOCU) - DocuSign stock headed 12.5% higher on Friday in afternoon trade following a report by the Wall Street Journal that it is exploring a possible sale.
Vodafone jumps to top of FTSE 100 amid Italian merger bid
Vodafone (VOD.L) surged over 6% to the top of the FTSE 100 after Iliad said it had submitted a proposal to the telecom company to merge their Italian businesses, adding this project had the unanimous support of its board of directors.
The French company's move comes as Vodafone also explores a potential deal with Swisscom's Fastweb Italian unit, a source familiar with the matter told Reuters.
Under the proposal, Iliad would pay Vodafone €6.5bn in cash plus an additional €2bn in a shareholder loan “to ensure long-term alignment”, the company said in a statement on Monday.
Iliad Italia and Vodafone Italia would each own 50%.
Pedro Goncalves
UK economy ‘limping’ as high interest rates bite
The UK economy is “limping with a sprained ankle” at at time when global growth is being held back by high interest rates and policy uncertainty.
Britain’s growth in 2024 will be modest according to KPMG, with UK GDP expected to rise by 0.5% in 2024, the same as in 2023, picking up to 1% in 2025.
The report said that “around a half of the direct impact of monetary policy on mortgage holders is still to come, which would put downward pressure on housing activity and consumption”.
Yael Selfin, chief economist at KPMG UK, said: “While the UK economy is resilient, it needs to get its mojo back.
“We expect monetary and fiscal policies to act as a headwind to growth over the next two years, and a sudden revival in productivity is not likely to come to the rescue.
“This means that even the expected continuation of positive growth should not be celebrated prematurely, as the outlook is dominated by downside risks.”
Pedro Goncalves
Job vacancies fall below 1 million
The number of job vacancies has fallen below 1 million for the first time in over two years, new research suggests.
Advertised vacancies dropped by 2.7% to 998,562 between October and November, the lowest since May 2021, according to jobs site Adzuna.
The report said falling vacancies suggested a stalling in the jobs market.
Adzuna added that its study also found that advertised salaries increased for the first time since June, up by 0.74% to £37,221.
Social work saw the biggest annual increase in advertised salaries, up by over 10% to £33,767 compared to a year ago, followed by jobs in energy, oil and gas (up by 8.95% to £44,210) and manufacturing (up 8.11% to £29,160), said Adzuna.
Advertised salaries had fallen in human resources and recruitment, according to the study.
Pedro Goncalves
Surge in Netflix subscriptions after password-sharing crackdown
Netflix has cracked down on password-sharing. (Nanci Santos via Getty Images)
Netflix (NFLX) subscriptions spiked after the streaming platform cracked down on password-sharing, while the Barbie and Oppenheimer film releases saw cinema trips surge more than three-fold, new data from digital bank Monzo has shown.
Monzo’s yearly spending data sheds a light on the shopping habits of its more than eight million customers in Britain.
Spending on Netflix increased by nearly a quarter after the platform moved to squash password sharing in May, compared with the first few months of the year.
The global company introduced a cost for users who wanted to add an extra member outside of the household to their account, leading to a rise in the number of people paying for the service.
Pedro Goncalves
UK set to launch carbon levy on imported goods in 2027
Britain is set to charge a carbon levy on imported goods under plans announced by the Treasury to help prevent UK firms being undercut by overseas manufacturers.
The Treasury said the proposed new tax will come into effect in 2027, ensuring that imports of products such as iron, steel, aluminium, ceramics and cement from overseas will face a comparable so-called carbon price to those manufactured in Britain.
A carbon price is used by governments to help reduce emissions by charging a fee on carbon pollution to encourage industries to cut their greenhouse gases.
There have been mounting calls for the UK Government to tackle “carbon leakage” over concerns that UK companies are being undercut by cheaper, but higher carbon, imports from countries where they charge a lower or no carbon price.
The Treasury said the plans will help level the playing field and boost UK industry investment in cutting greenhouse gas emissions.
Pedro Goncalves
FTSE bosses earning 57 times average salaries
FTSE chief executives now typically earn 57 times more than their employees, as pay inequalities at the country’s biggest companies have remained constant this year despite the cost-of-living crisis, according to a new report.
The difference in median pay between chief executives and other employees in the FTSE 350 was 57:1 last year, slightly up from 56:1 in 2021, latest figures showed.
Across the larger FTSE 100 companies, the gaps were wider, with a median chief executive/employee pay ratio of 80:1, said the High Pay Centre.
The think tank said its previous research found that 76% of people think top earners should not be paid more than 20 times their low and middle-earning colleagues.
The High Pay Centre urged companies to provide more detailed information on how many jobs they provide at different pay levels, and that outsourced workers, who often carry out low-paid work should be included in the pay ratio calculations
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