FTSE 100 LIVE: London and European markets mixed as Powell warns against rate cuts
02/05/2024 16:34
Powell says Fed can be 'prudent' in weighing rate cuts.
The FTSE and European stocks were a mixed bag on Monday, after the chairman of the US Federal Reserve pushed back on hopes of interest rate cuts in March during a US television interview.
The FTSE 100 (^FTSE) was 0.17% higher in early trade.
Germany's DAX (^GDAXI) was hovering above the flatline and the CAC (^FCHI) in Paris was also muted.
The pan-European STOXX 600 (^STOXX) was up 0.1% in early trade.
Vodafone (VOD.L) said it is in talks to sell its Italian business days after it emerged it had rejected an offer by billionaire telecoms tycoon Xavier Niel to merge their Italian operations in a €10.5bn (£9bn) deal.
Wall Street is set to open higher as S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were all in the red ahead of the opening bell across the pond.
Key companies reporting this week include Caterpillar (CAT), McDonald's (MCD), Spotify (SPOT), BP (BP.L), UBS (UBS), Paypal (PYPL) and Disney (DIS).
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Powell warns against moving too soon on rate cuts
US Fed chairman Jerome Powell (Reuters / Reuters) Federal Reserve Chair Jerome Powell said Americans may have to wait beyond March for the central bank to cut interest rates as officials look for more economic data to confirm that inflation is headed down to 2%.
Powell told CBS’s 60 Minutes that the Fed was alert to the danger of moving too soon and cutting rates before inflation was fully tamed.
He warned:
The danger of moving too soon is that the job’s not quite done, and that the really good readings we’ve had for the last six months somehow turn out not to be a true indicator of where inflation’s heading.
We don’t think that’s the case. But the prudent thing to do is to, is to just give it some time and see that the data continue to confirm that inflation is moving down to 2% in a sustainable way.
Vodafone at the bottom of FTSE 100 after earnings report
Vodafone (VOD.L) has said it is in talks to sell its Italian business days after it emerged it had rejected an offer by billionaire telecoms tycoon Xavier Niel to merge their Italian operations in a €10.5bn (£9bn) deal.
Chief executive Margherita Della Valle said the company is “in active discussions in Italy” after last week shunning Niel’s Iliad Group, which had tabled a proposal to combine their Italian businesses.
In a trading update, Vodafone revealed revenues slipped by 2.3% in the third quarter to €11.3bn (£9.7bn), although organic service revenue grew 4.7%, ahead of analyst estimates of 4.3%.
It said it remains on track for an underlying annual profit of €13.3bn (£11.4bn).
Matt Britzman, equity analyst at Hargreaves Lansdown, said:
“Vodafone’s third quarter had some pockets of optimism for investors to cling to. Growth was in line with the second quarter, arguably a better result than some had feared.The key German market managed to scrape its way into growth territory but saw a slowdown. Comparisons to the second quarter were always going to be tough, with some non-recurring revenue streams not repeating.Regulatory changes in Germany are set to kick in this year, adding a layer of uncertainty to operations in the region.
Shares in Vodafone have dropped over 1% at the start of trading, to the bottom of the FTSE 100 leaderboard.
CBI settles case against former boss
The Confederation of British Industry said it has settled a legal case brought by its former director-general, Tony Danker, after he was dismissed last year following complaints about his behaviour.
Asda opens 110 new convenience stores as part of goal to reach 1,000 UK sites
Asda in expansion drive across the UK (ASSOCIATED PRESS) Supermarket chain Asda plans to open 110 stores in the UK in February as part of its goal to reach 1,000 shops across the country.
Asda, previously owned by Walmart, will convert 109 Co-op and EG Group convenience sites to Asda Express stores as part of a multimillion-pound investment. The business said it wants to become the second largest grocery retailer in the UK.
Asda plans to turn all 470 convenience sites acquired from the Co-op and EG Group into Express stores by the end of March.
Wall Street overnight
In Wall Street, US stocks closed the week with a warm embrace after a good January jobs report and a series of positive market-moving earnings.
The Dow Jones (^DJI) rose 0.35% to 38,654 points. The S&P 500 (^GSPC) climbed 1.07% to 4,958 points and the tech-heavy NASDAQ (^IXIC), gained 1.74% to 15,628.
Asia overnight
China markets are struggling. (REUTERS / Reuters) China stocks slumped for a sixth straight session, with small-cap companies leading the plunge, as investor pessimism worsened on the lack of a clear signal for policy support. the Shanghai Composite (000001.SS) lost over 1% to 2,702 points.
The Hong Kong market remained relatively stable, with The Hang Seng (^HSI) only down by 0.15%.
Tokyo stocks (^N225) closed 0.54% higher as Japanese exporters benefited from a weaker yen.
Millionth pure battery electric new car registered in the UK
The millionth pure battery electric new car has been registered in the UK, industry figures show.
This milestone was reached in January, the Society of Motor Manufacturers and Traders (SMMT) said.
Only around 674,000 pure battery electric cars were licensed for use in the UK by the end of 2022.
The SMMT expects pure battery electrics to account for more than one in five new cars registered this year.
Preliminary SMMT figures show the total number of new cars registered last month was around 8% more than in January 2023.
CMC to axe 200 jobs amid cost-cutting drive
Online trading platform CMC Markets has said it plans to cut 200 jobs worldwide as part of aims to slash costs by £21m a year.
The London-headquartered company founded by Tory peer Peter Cruddas said it was cutting its workforce by about 17%.
It comes after a slump in deals last year, which has prompted investment banks to cut jobs and sparked a consolidation among City brokerages.
CMC said: "Cost reductions have been primarily achieved by merging support functions across multiple business lines, streamlining reporting lines and automating processes.
"The group will continue to seek opportunities to drive efficiencies and control costs while remaining committed to investing in growth opportunities and ensuring its technology remains market leading. "
UK jobless rate lower than first thought but inactivity jumps
Britain’s rate of unemployment was lower than first thought in the three months to November, according to official figures.
The Office for National Statistics (ONS) said changes to the way that it gathers information on the UK labour force has seen it revise the unemployment rate down to 3.9% for the quarter, from the 4.2% previous estimate.
It has also revised up the inactivity rate to 21.9% in the three months to November, from the 20.8% recorded previously.
The changes follow an overhaul to the ONS labour force survey after low responses meant the data was too unreliable.
Watch: Federal Reserve's Powell, on '60 Minutes,' signals March rate cut unlikely
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