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FTSE 100: European stocks rise and US mixed as traders look to UK inflation print

ftse NEW YORK, NEW YORK - MAY 14:  Traders walk the floor during morning trading at the New York Stock Exchange (NYSE) on May 14, 2024 in New York City. The Dow Jones Industrial Average was up slightly in morning trading ahead of the release of new inflation numbers from the U.S. government.  (Photo by Spencer Platt/Getty Images)
The UK's CPI data this week could show the UK has been more effective at cutting its inflation rate than the US. (Spencer Platt via Getty Images)

European markets were higher on Monday in London, with the FTSE boosted by a rally in commodity prices and geopolitical tensions in the Middle East simmering. Data later in the week is expected to show UK inflation cooling at a faster clip than in the US.

  • The FTSE 100 (^FTSE) was 0.1% higher by the end of the session, while the DAX (^GDAXI) was 0.3% up and the CAC (^FCHI) rose almost 0.4%.

  • The pan-European STOXX 600 (^STOXX) was also slightly higher.

  • Across the pond, the S&P 500 (^GSPC) rose 0.4%, while Dow Jones Industrial Average (^DJI) ticked upwards in the wake of the blue-chip benchmark's all-time high. The tech-heavy Nasdaq Composite (^IXIC) stepped up about 0.6%.

  • Stocks have gained as investors become more optimistic that the Federal Reserve will soon cut interest rates, despite words of caution from policymakers. All three major gauges closed at record highs on Friday as appetite for risk rose and Wall Street strategists painted a bullish picture for stocks.

  • Meanwhile commodities and haven assets rose after news of the death of the Iranian president, as people fear escalation of turmoil in the Middle East.

  • "UK CPI data this week is expected to show a decline to 2.1% from 3.2% in March.

  • This "[paves] the way for the Bank of England to cut rates," said Neil Wilson, chief market analyst at Finalto. "I like to be contrarian and say that June is on for a cut but I think they will be cautious and wait until August. The drop in inflation, down largely to a 12% drop in household energy costs, would take the UK way below the rate of inflation in the EU and US and do a lot to help Rishi Sunak…"

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LIVE COVERAGE IS OVER17 updates
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  • Nvidia stock pops

    The chipmaker is up more than 2.3% so far today, regaining ground from losses on Friday.

  • More on chips: Nvidia commentary

    Chris Beauchamp, Chief Market Analyst at online trading platform IG says:

    “The last of the big-name earnings comes through this week, with Nvidia just a short hop away from the remarkable $1000 per share level. The past 20 years have seen the company’s stock pop into the end of May, and a surge to the next big round number would put the seal on an astonishing run for the chipmaker.”

  • Here's what US stocks are doing at the open

  • UK chip sector to get new ombudsman

    The UK government announced today that the semiconductor industry is set to get an independent regulator — an organisation which will bring together politicians, university researchers and the private sector.

    Announcing the changes, the Department for Science, Innovation and Technology (DSIT) said it will look to ensure chip researchers have the tools and infrastructure needed to carry out their work and create market-ready products.

    The increasing global reliance on technology has seen semiconductors become recognised as an area of global strategic significance, with the rise of artificial intelligence already sparking further demand for more powerful chips.

    Reporting from PA

    Currently, production in the sector is dominated by Taiwan, but last year the Government launched a one billion-pound strategy to boost UK innovatio

  • AstraZeneca shares fall

    Shares in the drugmaker were lower in London after it announce an $1.5bn investment in a manufacturing site in Singapore dedicated to the production of antibody drug conjugates, an advanced form of chemotherapy that could replace conventional treatment.

    The pharmaceutical giant said the intended site, which it hopes will emit zero carbon from day one, will begin design and construction later this year and be 'operationally ready' by 2029.

    Chief executive Pascal Soriot said Singapore was a top global venue for investment with a reputation for excellence in complex manufacturing.

    ADCs are engineered antibodies that bind to tumour cells and then release cell-killing chemicals.

    The complex multi-step ADC manufacturing process includes antibody production, synthesis of the chemotherapy drug and linker, drug-linker conjugation, and filling of the completed ADC substance.

  • Bank of England official says rate cut 'possible' this summer

    Ben Broadbent, the Bank of England's deputy governor for monetary policy said in a speech at the CCBS:

    There is a range of views across the Committee on this point. In view of the rarity of events like this over the past, and the associated uncertainty about the future, that’s entirely understandable. Whatever the priors of its individual members the MPC will continue to learn from the incoming data and, if things continue to evolve with its forecasts – forecasts that suggest policy will have to become less restrictive at some point – then it’s possible Bank Rate could be cut some time over the summer.

  • What to watch for in the UK CPI

    Some more detail on what to expect from the CPI print from Roman Ziruk, senior market analyst at financial services firm Ebury:

    “The May meeting of the Monetary Policy Committee essentially left the question on whether to cut in June open.

    “It will depend on the two months' worth of data between now and the meeting, particularly inflation, of course.

    “The first such data point comes out this week. The consensus is for another large, though base-effect driven, drop in the annual data both on the headline and the core indices, which would open the way for a June move. This data will be followed on the next day by the advance PMI indices of activity for May.

    “The number is expected to be strong but should have less impact on sterling trading.”

  • Stocks to watch at the US open: Nvidia

    Pedro Goncalves has the latest:

    The darling of AI and technology investors was higher in pre-market trading as the company is set to report results from its first quarter of fiscal year 2025 on 22 May.

    Wall Street is betting on a blowout quarterly report from Nvidia on Wednesday, with its stock near record highs as investors look for evidence that the AI chipmaker can maintain its explosive growth and stay ahead of rivals.

    "There is a lot riding on Nvidia's earnings. It is the most important stock in the sector," Will Rhind, founder and CEO of GraniteShares, which runs an ETF that invests in the chip firm, told Reuters.

    For the second quarter, analysts project earnings growth of more than 120% and nearly 100% revenue growth.

    "We see enough room for NVDA to post FQ1E (April) revenue potentially as high as $26B (data centre ~$22-23B) and potentially guide to ~$27-28B in total revenue (data centre ~$25-26B) — both good enough to keep the stock biased higher, in our view," UBS analyst Timothy Arcuri wrote in a note to clients

    The stock is up more than 86% in 2024 and more than 200% over the past year.

    READ MORE IN TRENDING TICKERS

  • Here's what US stocks are doing in premarket

  • Oil fluctuates following news of Iranian president death

    • The Iranian president Ebrahim Raisi has died in a helicopter crash alongside foreign minister Hossein Amir-abdollahian, Iranian state media reported on Monday. The crash happened in foggy conditions in the mountains near to the border with Azerbaijan.

    • The incident leaves the country without two of its most influential figures at a time of geopolitical tension across the Middle East.

    • Raisi oversaw the country at a time of protests, economic upheaval and through a long shadow war with Israel.

    • Oil prices are typically sensitive to volatility in the region. Earlier in the day, brent crude (BZ=F) prices rose 0.4% to $84.35 (£66.45) a barrel before dipping 0.1%, while crude oil (CL=F) was 0.4%, reaching around $80.35 on Monday morning before heading 0.2% lower.

  • UK house prices hit record high in May

    Our reporter Pedro Goncalves has the latest on the topsy turvy UK housing market:

    The price of homes being put up for sale reached a record high of £375,131 in May, according to Rightmove. Across the country, the price of a property coming to market rose 0.8%, or £2,807, month-on-month.

    It is the fifth month in a row in which asking prices have risen, according to Rightmove's index.

    However, that only leaves average asking prices 0.6% higher than a year ago.

    Pent-up demand from would-be buyers who paused their plans last year is a key driver behind increased home mover activity despite mortgage rates remaining elevated for longer than anticipated, the property site said.

    Sales agreed have also risen 17% in the first four full months of this year compared to last, despite the Bank of England maintaining interest rates at 5.25% since last August.

    READ MORE HERE

  • Gold hits fresh all-time highs

    Neil Wilson from Finalto has some analysis of the haven asset:

    Gold hit a fresh all-time high and silver jumped to $32, its highest in 11 years. Expectations the Fed will cut rates soon is helping but real rates are nothing like as low as they once were.

    There is a clear geopolitical premium since October 7th and the death of the Iranian president may have driven some news-flow-based trade – bound to be some of that involved overnight. More importantly perhaps China has been a big buyer as the PBOC cuts Treasury holdings in favour of gold. Silver – I wondered last week if the meme stock resurfacing would prompt a move as it did in 2021 – cannot discount it, or at least shorts closing out in fear. It’s also because of the move in gold and closing the gap in the gold silver ratio.

  • Ryanair reaps rewards from fare bump

    Ryanair posted bumper full-year results on Monday off the back of raising fares more than a fifth, with a year-on-year increase in profit of 34% to €1.92bn (£1.64bn).

    The jump comes despite a rise in fuel prices and unreliable plane deliveries. The company said it would be short of 23 Boeing 737s this summer, that were due to be delivered by the end of July.

    If the planes are delivered on time, the budget airline expects to carry 200 million customers this financial year, but scrutiny over Boeing's manufacturing has caused knock-on issues following several incidents.

    Ryanair stock fell in early trade following the results.

  • US stocks on Friday: Dow breaks 40,000

    Here's how things ended last week:

    US stocks ticked upward Friday as the Dow Jones Industrial Average (^DJI) closed at 40,000 for the first time ever.

    The Dow rose 0.3% to score its record high. The S&P 500 (^GSPC) ticked up 0.1%, while the tech-heavy Nasdaq Composite (^IXIC) slipped 0.1%, but all the gauges notched weekly wins.

    Investor enthusiasm for interest rate cuts rose this week in light of April's encouraging inflation data. The run-up in stocks then hit a bump on Thursday in the wake of warnings from Fed officials that rates are likely to stay at historic highs for a while. While Fedspeak rattled bets on the likelihood of a September cut, it wasn't enough to stop the indexes from rising higher on Friday.

    That put the spotlight on appearances by Fed officials. On Friday, US Federal Reserve Governor Michelle Bowman reiterated her view that the central bank has not made progress this year on curbing inflation, she said in a speech in Nashville, Tennessee. Bowman said she is willing to raise rates again at a future meeting if incoming data shows further stalling.

    Fed Chair Jerome Powell was scheduled to deliver remarks at Georgetown University’s Law School graduation this Sunday, but he will now be speaking through a pre-recorded video, after he tested positive for COVID-19, a central bank spokesperson said on Friday.

  • This morning in Asia

    It was a broadly positive story across Asian indexes on Monday, with Japan's Nikkei (^N225) closing 0.7% higher and the Hang Seng in Hong Kong (^HSI) up 0.5%.

    The US inflation report last week has led markets to price in rate cuts in the States as early as September.

  • Good morning!

    Hello from London. We're going into the week with sunshine here, and FTSE 100 futures point to a higher open. We've also had Rightmove's latest house price update and results from Ryanair.

    Let's get to it.

Watch: New numbers show inflation cooling

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