FTSE 100 and Europe close in the red, Wall Street rises as US consumer confidence weakens

Live20 updates

• Tue, 25 June 2024 at 5:33 pm CEST

  Blog close

  Well that’s all from us today, thanks for following along. Be sure to join us again tomorrow when we’ll be back for more of the latest market news and all that’s happening across the global economy.

  Have a good evening all!

• Tue, 25 June 2024 at 5:19 pm CEST

  Microsoft rises despite breaching competition rules

  

  Microsoft stock managed to rise on Tuesday despite the company breaching competition rules with Teams, according to the European Commission (EC).

  The bloc claimed the tech giant violated European Union competition rules with “possibly abusive” practices by tying its Teams messaging and videoconferencing app to its widely used business software.

  The EC said it has informed Microsoft that it believes it has been “restricting competition” by bundling Teams with Microsoft 365, the subscription service that includes Word and Excel.

  The advantage this gives might have been widened by limits on the ability of rival messaging apps to work with Microsoft software, it said.

  Brad Smith, president of Microsoft, said:

  Having unbundled Teams and taken initial interoperability steps, we appreciate the additional clarity provided…and will work to find solutions to address the Commission‘s remaining concerns.

• Tue, 25 June 2024 at 5:04 pm CEST

  Inflation in Canada unexpectedly rises

  Inflation in Canada rose by 2.9% in the year to May, up from 2.7% in April. It comes as the Bank of Canada cut interest rates earlier this month.

  Statistics Canada revealed that the increase was due to higher prices for services, which rose 4.6% in May following a 4.2% increase in April.

  Faster price growth for services was led by cellular services, travel tours, rent and air transportation. Prices for goods (+1.0%) grew at the same rate as in April.

• Tue, 25 June 2024 at 4:49 pm CEST

  US consumer confidence falls

  US consumer confidence dropped in June, according to the latest survey.

  The Conference Board’s index dipped to 100.4 this month, down from 101.3 in May. Economists had expected it would fall more, to exactly 100.

  The decline was due to a deteriorating short-term outlook for income, business, and conditions in the jobs market.

  Dana M. Peterson, chief economist at The Conference Board, said:

  “Confidence pulled back in June but remained within the same narrow range that’s held throughout the past two years, as strength in current labour market views continued to outweigh concerns about the future.

  “However, if material weaknesses in the labour market appear, Confidence could weaken as the year progresses.”

• Tue, 25 June 2024 at 4:20 pm CEST

  SHEIN float would be ‘badge of shame’ for LSE

  SHEIN has reportedly now filed papers with UK’s market regulator ahead of a London flotation.

  It comes after the global ultra-fast fashion giant faced accusations that workers in its supply chain have received less than 4 US cents per garment produced. It has also been accused of using cotton harvested by forced labour.

  Reacting to the prospective flotation of the ultra-fast fashion clothing manufacturer SHEIN on the London Stock Exchange, Dominique Muller, Amnesty International Researcher specialising in the garment industry, said:

  ​“It’s deeply troubling that a company with questionable labour and human rights standards and an unsustainable fast fashion business model could be set to reap hundreds of millions of pounds via a sale of shares and a listing on the London Stock Exchange.

  “Where SHEIN goes, others will try to follow. The UK authorities and the London Stock Exchange should not facilitate SHEIN’s listing until transparent and binding safeguards regarding internationally accepted human rights standards covering its entire supply chain are agreed and applied, and any abuses identified fully remedied.

  “Rewarding SHEIN’s current methods via a flotation would be a badge of shame for the London Stock Exchange, the bankers helping bring it to market, and any investors set to profit from it. It would be an appalling example of a process which delivers for the rich by squeezing the poor. It validates the view that it is acceptable to regard workers and their rights, company products and the environment as expendable – which cheapens us all.

  ​“It is essential the new UK government does not allow a race to the bottom in terms of corporate and human rights standards. It should require companies to prevent serious environmental harms and human rights abuses occurring throughout their entire operations and supply chains. It should enable workers whose rights are abused by company activities anywhere in the world recourse to justice through UK courts.”

• Tue, 25 June 2024 at 3:02 pm CEST

  Tortilla wraps up £3m deal for rival

  Burrito chain Tortilla has acquired its biggest European competitor in a deal worth more than £3m, as it looks to attract new consumers.

  The company is buying 13 restaurants from rival Fresh Burritos, in prime locations in Paris and other cities in France, ahead of the Paris Olympics.

  The deal also includes a network of 19 franchised locations and the rights to the brand.

  Andy Naylor, chief executive, said:

  Tortilla’s international ambitions are no secret, and acquiring Fresh Burritos is our gateway to mainland Europe. With Mexican cuisine surging in popularity, these prime French locations give us a solid launchpad.

  The €3.95m (£3.3m) acquisition has been funded through a combination of cash payment and existing debt facilities, Tortilla said.

  The London-based company has 89 stores predominantly in the UK.

• Tue, 25 June 2024 at 2:49 pm CEST

  The most important stock market chart of 2024

  The stock market in 2024 has been defined by one theme: AI.

  And not just because people only want to talk about AI, but the market’s performance has hinged on it too.

  In a weekly note to clients published Monday, strategists at the BlackRock Investment Institute led by Jean Boivin highlighted the following chart, which shows just how much tech has dominated the market’s performance since 2023.

  Since the start of last year, the S&P 500 is up a robust 42%. This return is nothing to scoff at, with the annualized rate of that return standing near 26%, almost triple the index’s average annual gain over time.

  But if we isolate the performance of tech stocks, we see a clearer picture emerge.

  Click here to see more

• Tue, 25 June 2024 at 2:18 pm CEST

  UK home sellers see up to 21% jump in agency fees

  

  The latest data analysis from Open Property Group has revealed that home sellers are now paying up to 21% more in estate agency fees than they were five years ago. It is just one reason why selling a property is getting more and more expensive by the year.

  The data reveals that: –

  • Back in 2019, the UK’s average house price was £230,612*. Meanwhile, the average estate agency fee was 1.53%. As such, the cost of agency fees in 2019 was an estimated £3,528.

  • Fast forward to today and the average UK house price now stands at £280,311. Over those five years, the average estate agency fee has fallen to 1.42%, but due to the increase in house prices, the pounds-and-pence cost of the fee has actually risen to hit £3,980. This is a five-year increase to the seller of 12.8%, or £452.

  • However, due to vast regional variations in average house price, there are some parts of the UK in which sellers have seen the cost of agency fees increase significantly more.

  • In the North West, the average house price has increased from £164,419 in 2019 to £214,592. As such, the average fee has increased from £2,516 to £3,047, This is equivalent to a cost increase of 21.1% for sellers.

  • Hefty cost increases have also occurred in Northern Ireland where fees are up 20% on 2019 levels, followed by Wales (19.4%), Yorkshire & Humber (16.3%), the East Midlands (15.6%), Scotland (14.8%), West Midlands (14.9%), South West (14.4%), and North East (14%).

  • Meanwhile, London is the only place where the cost of agency fees has fallen, having dropped by -0.5% over the five-year period.

• Tue, 25 June 2024 at 1:46 pm CEST

  Bitcoin ETF outflows reach $1.3bn in last two weeks

  Outflows from US Bitcoin (BTC-USD) exchange-traded funds (ETFs) reached $1.3bn over the last two weeks as the price of the cryptocurrency continues to decline.

  Bitcoin is stable above $61,000, after dropping to $59,200 during the early hours of the Asian trading day. The digital asset is now down 11% in June, but remains up 42% for the year-to-date, with the gains largely concentrated around the ETF approval.

  However, according to data from Farside Investors quoted by the cointelegraph, the total outflow for Bitcoin ETFs hit $1.298bn over the last two trading weeks with Grayscale leading outflows at $517.3 million in the same period.

  BlackRock’s Bitcoin ETF has been the only fund to post positive results, raking in $43.1mn worth of inflows over the last two weeks.

  Bitcoin is not only under pressure from cooling demand for its ETFs but there is also growing uncertainty about the US Federal Reserve’s scope to cut interest rates quickly from a two-decade high.

  Crypto analysts are giving a 14% chance of Bitcoin rebounding to $65K by the end of the week.

  See what else is trending here

• Tue, 25 June 2024 at 1:23 pm CEST

  Real pay has grown just £16 a week since 2010

  UK workers have witnessed a prolonged pay squeeze that has left real average wages only £16 a week higher than in 2010, according to new research.

  The Resolution Foundation think tank said that real wage growth has improved notably in recent months, as wider inflation has slowed, but said it came after the significant effects of the financial crisis, Brexit referendum and cost of living crisis.

  The research, which comes less than two weeks before voters go to the polls, found that real wage growth – pay once the rate of inflation is taken into account – is 1.6% higher across the total UK workforce since 2010.

  However, it highlighted that this was significantly larger for the real hourly pay of people in low-paying occupations, such as cleaners, shop assistants and bar staff.

  This was driven by rises in the minimum wage in 2016 by then chancellor George Osborne, as well as recent increases under Prime Minister Rishi Sunak.

  The latest data from the Office for National Statistics (ONS) found that regular earnings growth remained at 6% in the three months to April, and continued to outstrip price rises – up 2.9% when taking Consumer Prices Index (CPI) inflation into account.

• Tue, 25 June 2024 at 12:58 pm CEST

  The decline of gold prices

  Gold prices edged down in early Tuesday trading, finding support above the $2,300 level and remaining close to where they have been over the last two weeks.

  Ricardo Evangelista, senior analyst at ActivTrades said:

  “The bullion price continues to be influenced primarily by US interest rate expectations, and the stability in recent sessions reflects the lack of strong indications regarding the Federal Reserve’s monetary policy for the second half of the year.”

  “May’s inflation reading showed an easing in consumer price increases, but a stronger-than-expected PMI reading highlighted the resilience of the US economy, suggesting that higher interest rates for a longer period are still a possibility for the Fed.”

  “In this context, Friday’s release of PCE data, considered the Fed’s preferred inflation gauge, could shake the markets and potentially cause gold prices to break out of their recent range.”

• Tue, 25 June 2024 at 12:32 pm CEST

  How to save for a good retirement income

  

  “Building up a good retirement income is a huge challenge, but recent research carried out by Hargreaves Lansdown shows that for millions of households the key to helping themselves massively rests in their own bank accounts and ISAs. By making small changes in how we allocate our money we can make an enormous difference to our retirement prospects.

  The HL savings and resilience barometer uses an array of different data to give a six-monthly snapshot of the nation’s financial resilience. When we look at financial resilience in retirement we model that against a household being on track to receive a so-called moderate retirement income.

  This is based on data from the Pensions and Lifetime Savings Association which puts the cost of a moderate income in retirement at about £23,000 per year for a single person and £34,000 for a couple. Achieving this moderate retirement income means you are able to afford things such as a European holiday once a year and to run a small car.

  Read the full article here

• Tue, 25 June 2024 at 12:17 pm CEST

  Morrisons sales rise as it battles discounters

  Morrisons posted a rise in sales in its latest quarter with group like-for-like sales, excluding fuel and VAT, up 4.1%.

  It comes as it battles competition from discount grocers such as Aldi and Lidl.

  The Bradford-based supermarket hailed a “great start” to its Aldi and Lidl Price Match scheme launched in February, although the growth represents a slowdown on the 4.6% increase reported the previous quarter.

  It also reported that it has reduced its debt levels to £4bn from a peak of £6.2bn.

  Jo Goff, chief financial officer, said:

  “This has been another solid quarter of progress with sales and volume improvements right across the business.

  “Our debt has now reduced by over a third and we made further progress on our cost savings programme with £78m delivered in the quarter, taking the total since the start of this year to just over £450m, in line with our £700m three year target.”

  Morrisons was bought by US private equity firm Clayton, Dubilier & Rice in 2022.

• Tue, 25 June 2024 at 11:58 am CEST

  Airbus shares slide after profits warning

  

  Airbus fell almost 10% today as investors digested news that it had cut its profit forecasts.

  The European aerospace giant warned of persistent supply chain disruptions and challenges in its space business last night.

  It now expects to make around 770 commercial jets this year, down from a previous target of 800, and delayed increasing output of the A320 to 2027. It also took a €900m charge at its Space Systems.

  It said:

  In commercial aircraft, Airbus is facing persistent specific supply chain issues mainly in engines, aerostructures and cabin equipment.

• Tue, 25 June 2024 at 11:34 am CEST

  Argentina slumps into recession

  Argentina entered a technical recession in the first quarter of 2024 amid President Javier Milei’s programme of government spending cuts.

  Gross domestic product (GDP) fell 2.6% compared to the end of 2023, new data showed, when the economy contracted by 2.5%. Two consecutive quarters of contraction are considered the definition of a recession.

  It comes amid sharp cuts to pensions, public sector wages and spending on infrastructure projects implemented by the President’s administration.

  Mileo devalued the peso by more than 50 when he took office in December, sending real wages down 17pc from November to March and triggering a 10pc drop in supermarket sales over the same period.

  However, the painful contraction has left the government with five consecutive monthly budget surpluses and a faster-than-expected easing of monthly inflation from 25.5pc in December to 4.2pc in May.

• Tue, 25 June 2024 at 11:13 am CEST

  $550bn wiped off Nvidia’s value

  Nvidia has suffered a sharp slump since its brief stint as the world’s most valuable company, with more than $550bn (£433bn) wiped off its valuation.

  It recently became the third company to achieve a market valuation of more than $3 trillion, but has since retreated from its highs.

  Many investors are thought to be taking profits after the semiconductor manufacturer’s valuation surged.

  Derren Nathan, equity research analyst at Hargreaves Lansdown, said:

  “Nvidia has had another stumble slipping further away from the position it held briefly as the world’s most valuable company. But contrary to recent noise, markets are about more than just one stock. After several days of declines, yesterday saw the chipmaker’s stock lose over 6%, shedding some $200bn from its market value.

  “But to put things in context, the shares have still gained 190% on a 12-month view, so it’s no surprise some investors are locking in some profits, including CEO Jensen Huang who is reported to have sold around $95mn of stock in recent days.

  “But although NVIDIA has sneezed, the wider market hasn’t caught a cold with a mixture of less extreme movements in both directions for the rest of the magnificent 7.

  “Meanwhile, in other sectors US stocks saw gains in energy, financials and utilities: a vote of confidence by investors in the health of the broader economy.

• Tue, 25 June 2024 at 10:49 am CEST

  Contactless payment transactions to hit $15.7trn globally by 2029

  A new study by Juniper Research has found the value of contactless payment transactions will grow by 113% over the next five years, from $7.4 trillion in 2024.

  The new research, featuring comprehensive market sizing and forecasts for both Contactless Payments and Digital Ticketing, found greater contactless payment availability for smaller businesses with Soft POS (Point-of-Sale) systems, is powering growth.

  As access becomes more widespread, users increasingly expect contactless payments; creating a virtuous cycle of increasing use.

  Research author Nick Maynard said:

  “Current contactless-based open-loop systems are supported by account-based ticketing systems, which facilitate different access tokens and subscriptions.

  This means that cities that have deployed open-loop ticketing are typically well prepared for a future transition to full MaaS (Mobility-as-a-Service offerings). Under MaaS, access to transit will be seamless and multimodal; unlocking a superior user experience across a wider range of transit options.”

• Tue, 25 June 2024 at 10:24 am CEST

  Oil prices steady

  

  Oil prices held steady on Tuesday after rising the previous session thanks to expectations of increased fuel demand over the summer. However, investors remained cautious ahead of US consumer price data.

  Brent Crude (BZ=F) futures for August settlement eased 5 cents to $85.96 a barrel after gaining 0.9% on Monday, while US crude futures were down 3 cents at $81.60 a barrel after climbing 1.1% a day earlier.

  Both benchmarks rose about 3% last week, marking two straight weeks of gains.

  Gasoline demand is rising and oil and fuel stockpiles have declined as the US, the world’s biggest oil consumer, enters the peak summer consumption period.

  Independent market analyst Tina Teng told Reuters:

  “The surge in oil prices was triggered by an optimistic demand outlook and reduced U.S. inventories. With the Northern Hemisphere entering a hot summer and the upcoming hurricane season, demand is expected to continue increasing in the coming months.”

• Tue, 25 June 2024 at 9:55 am CEST

  Asia and US markets

  Stocks in Asia mostly rose overnight after another slide for Wall Street heavyweight Nvidia kept US indexes mixed.

  The Nikkei (^N225) rose 0.95% on the day in Tokyo, after data from the Bank of Japan showed the services producer price index in May was up 2.5% compared to the same period last year. This was a slowdown from the 2.7% increase seen in April.

  Meanwhile the Hang Seng (^HSI) climbed 0.25% in Hong Kong and the Shanghai Composite (000001.SS) was 0.4% down by the end of the session.

  The Japanese yen remained a focus of attention, with exchange rate to the US dollar still trading near its weakest level in approximately 34 years. The yen rose to 159.37 to the dollar in Tuesday morning trading. The dollar closed at 159.59 yen on Monday.

  Across the pond on Wall Street, the Dow Jones (^DJI) hit a one-month high while the Nasdaq (^IXIC) fell more than 1% to 17,496.82.

  The Dow Jones rose 0.7% to 39,411.21, and the S&P 500 (^GSPC) lost 0.3%, to 5,447.87.

  The yield on benchmark 10-year US Treasury bonds feel to 4.23%, from 4.257% late on Friday.

• Tue, 25 June 2024 at 9:40 am CEST

  Coming up…

  Good morning, and welcome back to our markets live blog. As usual we will be keeping you up-to-date with what’s moving markets and happening across the global economy.

  Here’s a quick look at what’s on the agenda for today:

  • 7am: Trading update: Warehouse Reit

  • 9am: PMI Services, Manufacturing, Composite

  • 1.30pm: Chicago Fed National Activity Index for May

  • 1.30pm: Canadian inflation report for May

  • 2pm: US house price index for April

  • 3pm: US consumer confidence report for June