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FTSE 100 and European stocks in the red and US tepid as AI rally stalls

A look at how markets are performing on Friday

FTSE 100 and US stock markets: Nvidia CEO Jensen Huang speaks at the Computex 2024 exhibition in Taipei, Taiwan
Nvidia CEO Jensen Huang speaks. Nvidia shares were lower on Friday. (ASSOCIATED PRESS)

The FTSE 100 and European markets finished the week lower in London, while US indices were tepid as AI euphoria, led by chipmaker Nvidia, appears to cool.

  • The FTSE 100 (^FTSE) was 0.2% lower, while the CAC (^FCHI) and DAX (^FCHI) also pulled 0.2% and 0.3% downwards respectively.

  • The pan-European STOXX 600 (^STOXX) fell about 0.5%.

  • Across the pond, the Dow (^DJI) opened 0.1% higher, while the S&P 500 (^GSPC) and Nasdaq (^IXIC) were almost flat.

  • Thursday's dip in the S&P 500 and Nasdaq registered as notable mainly because it was an anomaly in recent weeks. The S&P had been flying higher, briefly crossing 5,500 for the first time Thursday. But the Nasdaq snapped a streak of seven straight record closes with its loss in the prior session.

  • The moves come despite a week of broadly positive news for the UK economy. Fresh data showed inflation had hit the Bank of England's target of 2% on Wednesday and the Bank held rates at 5.25%, with split opinions from policymakers about how soon Threadneedle Street should start cutting.

  • On Friday, retail sales data showed a pick up in consumer spending in May. Sales volumes rose by 2.9% in May 2024, following a fall of 1.8% in April 2024 (revised from a fall of 2.3%).

  • According to the ONS, sales volumes rose across most sectors, with clothing retailers and furniture stores rebounding.

  • UK public debt hit £15bn in May, jumping to highest since 1961, ONS data published on Friday showed.

Follow along for live updates:

  • Thanks for reading!

    Head over to our US site for more market moving stories. Happy Friday!

  • Is risk back on? Gold and silver prices dip

    Axel Rudolph, senior market analyst at online trading platform IG, says:

    "The oil price was little changed on the day and but still saw its second straight week of gains of over 10% from its early June low. A stronger US dollar put pressure on precious metals with the gold price dropping by over 1% and the silver price by over 3%."

  • Stocks to watch next week

    Jun 20, 2024; Eugene, OR, USA; Detailed view of Nike Alphafly 3 racing flat at the Nike by Eugene store. Mandatory Credit: Kirby Lee-USA TODAY Sports
    Jun 20, 2024; Eugene, OR, USA; Detailed view of Nike Alphafly 3 racing flat at the Nike by Eugene store. Mandatory Credit: Kirby Lee-USA TODAY Sports (USA TODAY Sports via Reuters Connect / Reuters)

    It's earnings season for fashion brands, with Nike and H&M slated for next week.

    Read more about that here

  • How US stocks are faring at the open

  • Trending tickers

    READ MORE: Click here for our trending tickers of the day

  • Stocks to watch at the open: Nvidia

    Premarket data suggests Nvidia stock is set to continue its downward tilt when markets open on Friday, after a tricky few days for the AI giant, with losses of around 2.5% chalked up for the open. Yesterday, the stock lost 3.5%.

    The blip marks a breather from a staggering rally for the chipmaker, which has seen it dominate the stock market and, at one point, overtake Microsoft as the world's most valuable company. Since 2022 the stock is up more than 1,000% off the back of demand for its chips which are crucial components of computers needed to power AI.

    Some market watchers have questions about whether Nvidia is now overvalued, slightly taking the wind from its sales in the last few days.

  • Bitcoin price slides to lowest in a month

    Here's Stocklytics analyst Neil Roarty's take:

    “Perhaps the most bearish indicator is the on-chain analysis which suggests that some of Bitcoin’s biggest whales are cashing in. By some measures, the largest BTC holders have together sold more than $1 billion worth of the coin over the last couple of weeks. If they know something the rest of the market doesn’t, it won’t be long until others follow the example.

    “On the flip side, bulls will note that we are still only a little more than 10 percent down from Bitcoin’s all-time high price of $73,000 achieved in March. They argue a small regression and period of consolidation is both expected and healthy before Bitcoin targets the $100,000 mark. Depending on which way things break, this feels like a major inflection point for Bitcoin.”

  • The BoE's service inflation problem

    Nomura's take on the latest PMI:

    The BoE is likely to be more concerned by this set of PMIs than the ECB. For the ECB, it may gain comfort in the continued fall in services price indicators and cooling labour market activity, which make last mile inflation risks less challenging.

    However, in the UK stronger service prices will not go unnoticed, though at the same time this index is not yet on a new worrying trend. For both central banks, the signal from these PMIs is relatively weak, as in practice the predictive power is limited. Instead, their focus is likely to be squarely on the actual inflation and growth data. The PMIs should marginally give the ECB more confidence in a quarterly pace of rate cuts to 2.50%, but may give the BoE small pause for thought about whether a quarterly pace is too fast. Whatever the case, yesterday’s dovish BoE sentiments were supportive of our long-held call that the BoE will cut rates at its next meeting on 1 August.

  • Ocado stock up on its final day in the FTSE 100

    Grocery and warehousing tech company Ocado saw its stock rise 3.2% on Friday morning in London, on its final day of trade in the FTSE 100.

    The equity is set to drop down to the FTSE 250 on Monday after six years in the index, swapping for LondonMetric Property.

    Ocado heads down to the mid-cap index, which is typically a better gauge of the British economy than the FTSE 100. It moves alongside St. James’s Place and electronic-components maker RS Group.

  • Not-so-frothy start for Calsberg

    Carlsberg stock fell more than 7.5% on Friday after Britvic (BVIC.L) rejected a £3bn takeover bid from the drinks giant.

    Britvic said on Friday it had rejected the takeover bid, which it claimed "significantly undervalued" the business. Stock in the British drinksmaker surged in London on Friday, up 10.5% by mid-morning.

    It's the latest example of foreign businesses swooping for London-headquartered or listed firms, as international buyers eye undervalued stocks.

  • Standard Chartered to push into crypto trading: Bloomberg

    Standard Chartered is set to push into spot crypto trading, with a desk focused on Bitcoin and Ether, according to a Bloomberg report citing people familiar with the matter.

    The desk will be part of the bank's FX trading unit in London, according to the report.

    “We have been working closely with our regulators to support demand from our institutional clients to trade Bitcoin and Ethereum, in line with our strategy to support clients across the wider digital asset ecosystem, from access and custody to tokenization and interoperability,” the bank told Bloomberg.

    The moves come following a surge in regulatory progress for cryptoassets. Earlier this year, spot bitcoin ETFs were given the nod for the first time by the Securities and Exchange Commission in the US, with Blackrock and Fidelity pushing to offer the assets.

  • Private sector activity growth slows to seven-month low

    Here are the top lines from the latest UK PMI:

    • Flash UK PMI Composite Output Index(1) at 51.7 (May: 53.0). 7-month low.

    • Flash UK Services PMI Business Activity Index(2) at 51.2 (May: 52.9). 7-month low.

    • Flash UK Manufacturing Output Index(3) at 54.2 (May: 53.4). 26-month high.

    • Flash UK Manufacturing PMI(4) at 51.4 (May: 51.2). 23-month high.

    Despite strength in manufacturing, the PMI was overall held back by service sector growth.

    Inflationary pressures were back on the rise during June, as companies widely reported a steep increase in transport costs linked to global shipping bottlenecks.

    Notably, manufacturing input prices recorded the sharpest uptick for 17 months, with firms also commenting on higher prices for items such as metals and paper. Wages remained the main driver of services cost inflation, although shipping and software costs were also widely cited by respondents.

  • What's happening in US premarket

  • Languid summer markets

    Neil Wilson from Finalto says:

    O Fortuna! There is a summer feel to markets, bringing with it a languid anticipation. Elections in France and the UK create a lingering sense of something is about to change but we don’t know what the change will look like. The Euros are providing some distraction – it’s nice to see England playing like Scotland.

  • Retail sales: Commentary

    Lisa Hooker, leader of industry for consumer markets, PwC UK says:

    "In line with other industry reports, the picture is less rosy compared with May 2023. With an extra trading day in 2024 compared to 2023, when there was an additional Bank Holiday for the King’s Coronation - and the first full month benefit of higher National Living Wage and lower National Insurance - we would have expected a larger improvement in sales volumes.

    “In the event, grocery sales volumes declined by -1.2% (with 1.2% more pounds in the till due to inflation), while non-food sales volumes only grew by 1.5%. The continued unseasonal weather particularly hit fashion sales, which fell by 2.6% in volume terms compared with last year. This month has already seen several fashion retailers begin their summer sales early in order to help clear excess seasonal stock.

    “Not surprisingly, the thunder and rain also drove more shoppers to buy online with penetration rising to 27.2%, almost as high as it was during the last bout of wet summer weather last July.

    “With improving weather and the start of a summer of sport in June, retailers will be hoping that May’s recovery sustains during the coming months, and finally sees year-on-year growth turn into positive territory.

    “However, it may take a few more months for lower inflation and the prospect of lower interest rates in August to coax consumers to hit the shops with their hard-earned cash. But will the tide turn in time for the all important run-up to Christmas?”

  • Friday trade in Asia

    Stocks fell overnight in Asia following a mixed day in the US as investors fretted about a pullback by Nvidia and tech stocks. Asian markets are watching closely for further rate cut signals across the board.

    The Nikkei (^N225) was down 0.1%, while the Hang Seng (^HSI) dropped 1.5%, pulled down by tech stocks and real estate.

  • Thursday trade in the US

    Two of the major stock indexes declined on Thursday after touching record highs earlier in the session. Nvidia's (NVDA) record-breaking surge — which catapulted it to the title of world's most valuable public company — also took a breather.

    The S&P 500 (^GSPC) lost around 0.2% after briefly crossing 5,500 for the first time, as the index couldn't build on a 31st record close of the year. The tech-heavy Nasdaq Composite (^IXIC) touched new highs earlier in the session but closed sharply down, almost 0.8%. The Dow Jones Industrial Average (^DJI) rose roughly 0.7%, or about 300 points.

    After a holiday break on Wednesday, Wall Street struggled to continue its winning ways in 2024. Stocks' growth story this year has been largely driven by the excitement around AI's potential, and no company has captured the collective attention like Nvidia. For a while, it seemed like the AI party would continue.

  • Good morning!

    Hello from London. It's a beautiful day here after a busy week of economic data.

    This morning we've already had an update on UK retail sales. Next up is UK PMI readings and US manufacturing data.

    Let's get to it.