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European and US stocks slip into the red as rate cut uncertainty rules

ftse People walk past the New York Stock Exchange (NYSE) on March 28, 2024 in New York City.
The FTSE 100 and European stocks were mixed after the long Easter break and US stocks fell, spelling a shaky start to the second quarter of the year. (Erik Pendzich)

The FTSE 100 and European stocks fell into the red after the long Easter break and US stocks dipped, spelling a shaky start to the second quarter of the year.

  • The FTSE 100 (^FTSE) was flat by the time markets opened in the US, but fell 0.2% by the close. Meanwhile, the DAX (^GDAXI) was 1.1% lower in Germany and Paris' CAC (^FCHI) lost 1%.

  • The pan-European Stoxx 600 (^STOXX) also fell 0.8%.

  • US stocks mostly followed European equities lower, as healthcare insurers tumbled and investors faced up the chances an interest rate cut will come later than hoped.

  • The Dow (^DJI) slipped 1.1%, or over 300 points, setting the blue-chip index back from a bid to reach the key 40,000 level. The S&P 500 (^GSPC) shed 0.9%, while contracts on the tech-heavy Nasdaq 100 (^NDX) was down 1.3%.

  • The moves in the UK came following new data from the British Retail Consortium (BRC) which shows that shop price inflation fell to its lowest level since December 2021 in February. Despite a surge in cocoa prices, supermarkets ramped up chocolate deals, while the price of dairy products fell.

  • “While these figures are good news for consumers, from this month, retailers face significant increased cost pressures that could put progress on bringing down inflation at risk," said Helen Dickinson, BRC CEO. "These costs include a 6.7% business rates rise, ill-thought-out recycling proposals, and new border checks — all at the same time as the largest rise to the National Living Wage on record."

  • Meanwhile, data from Nationwide showed that house prices have edged up in March, rising 1.6% compared with a year ago.

Follow along for live updates:

LIVE COVERAGE IS OVER17 updates
  • Thanks for reading!

    Head over to our US site for more live updates on markets.

  • Commodities watch

    Here's Axel Rudolph, senior market analyst at online trading platform IG on what's moving today:

    "While the gold price hit a new record high on Tuesday, with the silver price playing catch up and nearing its December and March peaks, the oil price remains on track for its fourth straight day of gains amid heightened geopolitical tensions in the Middle East."

  • US stocks at the open

    Here's what the US's major indexes are doing at the opening bell:

  • UK mortgage approvals rise to levels seen before Liz Truss’ mini-budget

    Mortgage approvals rose in February and topped 60,000 for the first time since Liz Truss’s mini-budget crisis sent the lending market into turmoil.

    The number of mortgage approvals made to home buyers increased from 56,100 in January to 60,400 in February, according to Bank of England (BoE) data. Banks raced at the start of the year to offer lower mortgage rates to buyers as markets predicted several interest rate cuts in 2024.

    This represents a month-over-month increase of 7.7% and a 39.8% surge year-over-year compared to February 2023, which recorded 43,207 approvals. This also puts mortgage approvals at their highest level since September 2022, when they reached 65,349.

    Approvals for remortgaging also increased in February, from 30,900 to 37,700, according to the BoE’s Money and Credit report.

    READ MORE

  • US stocks in premarket

    US stocks are wavering in premarket. The opening bell is in about three hours:

  • Stocks to watch Tesla, Shell, UBS, Xiaomi

    Here are our trending tickers for Tuesday: Tesla, Shell, UBS, Xiaomi

    FOTO DE ARCHIVO: Elon Musk, CEO de SpaceX y Tesla y propietario de X, antes conocida como Twitter, asiste a la conferencia Viva Technology dedicada a la innovación y las startups en el centro de exposiciones Porte de Versailles en París, Francia. 16 de junio de 2023. REUTERS/Gonzalo Fuentes/Archivo
    FOTO DE ARCHIVO: Elon Musk, CEO de SpaceX y Tesla y propietario de X, antes conocida como Twitter, asiste a la conferencia Viva Technology dedicada a la innovación y las startups en el centro de exposiciones Porte de Versailles en París, Francia. 16 de junio de 2023. REUTERS/Gonzalo Fuentes/Archivo (Reuters / Reuters)
  • Mining stocks are heading up the FTSE 100. That's partly due to China.

    Mining stocks like Glencore, Fresnillo, Rio Tinto and Anglo American are in the green this morning, pushing the FTSE 100 up.

    Susannah Streeter from Hargreaves Lansdown says this is due to positive news in the Chinese economy:

    "The Caixin. S&P Global PMI numbers came in at 51.1 in March, with above 50 indicating growth," she said. "The reading was the best performance for the sector since February 2023 adding to hopes that China’s sluggish economy is seeing a breath of fresh air. The improved snapshot has increased expectations of higher demand from China’s factories for metals and minerals, and it backs up other official data showing a brighter outlook for the sector."

  • Some more detail on those PMI numbers

  • UK business optimism at 11-month high

    Top lines from the latest PMI manufacturing release from S&P Global have struck a positive tone, with some caveats about supply chains:

    • Manufacturing PMI at 50.3 in March (any score above 50 indicates growth).

    • Business optimism rises to 11-month high.

    "Potential blockers remain such as continued weak export performance and supply chain stresses, with the neighbouring EU market the main drag on overseas demand and the Red Sea crisis still impacting supply chains," said Rob Dobson, director at S&P Global Market Intelligence. "Signs from the survey that the impact of both of these factors is easing is therefore welcome news.”

  • UK net consumer credit numbers coming through

    The Bank of England's data on consumer credit flows are reported in net terms — new credit extended less the amount repaid on existing credit but excluding write-offs, revaluations or other changes in the stock.

  • UBS to launch $2bn buyback

    UBS (UBS) stock regained ground in premarket trade on Tuesday, after losses on Monday, as it announced a new share buyback programme of up to $2bn.

    The scheme will begin on Wednesday 3 April, and builds on a $5.2bn buyback undertaken in 2022.

    "As previously communicated, in 2024 we expect to repurchase up to $1bn of our shares, commencing after the completion of the merger of UBS AG and Credit Suisse AG which is expected to occur by the end of the second quarter," the bank said in a statement.

    "Our ambition is for share repurchases to exceed our pre-acquisition level by 2026."

  • UK house prices fall for first time in three months

    Here's our reporter Pedro Goncalves' take

    Surprise house price fall suggests a pause in UK housing market recovery. (Empics Entertainment)
    Surprise house price fall suggests a pause in UK housing market recovery. (Empics Entertainment)

    UK house prices fell for the first time in three months as high mortgage rates continued to hit the market, according to Nationwide.

    Property values fell by 0.2% between February and March, the Nationwide house price index showed, although they were up 1.6% compared to the same month last year.

    The average home was worth £261,142 as buyers were hit with the impact of interest rates which have stood at 5.25% since August last year.

    Robert Gardner, Nationwide’s chief economist, said: “Activity has picked up from the weak levels prevailing towards the end of 2023 but remain relatively subdued by historic standards.

    Read more: UK house prices fall for first time in three months

  • House prices see monthly dip, but still in annual growth

    Herethe top lines from Nationwide's data release:

    • UK house prices fell by 0.2% in March, after taking account of seasonal effects. Nevertheless, the annual rate of house price growth edged higher to 1.6% in March, from 1.2% in February.

    • Northern Ireland was the best performing region, with prices up 4.6%.

    • South West was the weakest performing region, with prices down 1.7% over the year.

    "Higher mortgage rates do remain a concern for many buyers and will continue to influence the price they are able to pay to a degree," said Foxtons CEO, Guy Gittins. "However, with interest rates expected to fall this year, market confidence is high and we’re continuing to see buyers move forward with their plans to purchase undeterred.”

  • Some more data from that BRC shop price release

    As food price inflation has slowed the data from February also showed:

    • Shop price annual inflation eased to 1.3% in March, down from 2.5% in February. This is below the three-month average rate of 2.2%.

    • Non-food inflation fell to 0.2% in March, down from 1.3% in the preceding month. This is below the three-month average rate of 0.9%. Inflation is its lowest since January 2022.

    • Food inflation decelerated to 3.7% in March, down from 5.0% in February. This is below the three-month average rate of 4.8% and is the tenth consecutive deceleration in the food category. Inflation is its lowest since April 2022.

    • Fresh food inflation slowed further in March, to 2.6%, down from 3.4% in February. This is below the three-month average rate of 3.6%. Inflation is its lowest since November 2021.

    • Ambient food inflation decelerated to 5.2% in March, down from 7.2% in February. This is below the three-month average rate of 6.6% and is the lowest since June 2022.

  • US stocks: Monday's day of trade

    Our US team writes:

    US stocks finished mixed to kick off 2024's second quarter as US treasury yields rose.

    The S&P 500 (^GSPC) fell 0.2%, while the Dow Jones Industrial Average (^DJI) fell 0.6%. The tech-heavy Nasdaq Composite (^IXIC) closed slightly higher, though off its earlier session highs.

    US bonds sold off as the benchmark 10-year Treasury (^TNX) yield rose 12 basis points to 4.32%, inching toward its highest level of the year.

    Data released on Monday showed the US manufacturing sector is in its strongest position since 2022, raising questions over whether the economy is accelerating and its impact on the Federal Reserve's path on interest rates.

    As Yahoo Finance's Josh Schafer reported, the Institute for Supply Management's manufacturing PMI indicated the manufacturing sector moved into expansion for the first time since September 2022. Meanwhile, a measure from S&P Global showed production hit a 22-month high last month as the US economy continues to impress.

  • Overnight in Asia

    Asian stocks saw a mixed day of trade overnight, with notable gains from the Hang Seng (^HSI) in Hong Kong, which was supported by a surge in Xiaomi Corporation's shares following the launch of its SU7 electric vehicle. The index rose 2% while the car company was up 9% on the day.

    Meanwhile the Nikkei (^N225) in Japan rose 0.1%, gliding just shy of the symbolic 40,000 mark.

  • Good morning!

    Hello from London, where markets are about to get going after the long weekend. FTSE 100 is looking at a positive open, as is the pan-European Stoxx 600. Let's get to it.

Watch: Fed will have a problem marketing rate cuts thanks to 'sticky' inflation: Joe LaVorgna

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