FTSE 100 dips, Europe mixed and Wall Street holds near record high as Labour wins UK general election

Live18 updates

• Fri 5 July 2024 at 4:52 pm CEST

  US stocks hold record highs after jobs data

  US stocks held near all-time highs on Friday as investors weighed the June jobs report, which will play into Federal Reserve rate cut calculations.

  The S&P 500 (^GSPC) slipped just below the flatline, on heels of the report, after notching a record close in a shortened session on Wednesday. The Dow Jones Industrial Average (^DJI) fell 0.2%, while the tech-heavy Nasdaq Composite (^IXIC) gained 0.3%. All three gauges were shuttered on Thursday for the Fourth of July holiday.

  The US economy added 206,000 jobs in June, more than the 190,000 expected on Wall Street. But the unemployment rate unexpectedly rose slightly to 4.1%, its highest level since November 2021, in another signal the jobs market continues to cool.

• Fri 5 July 2024 at 2:38 pm CEST

  Samsung profits to skyrocket amid AI mania

  Samsung Electronics stock rose 3% in Friday’s session in Seoul after it said it expects its profits for the three months to June to see a 15-fold increase compared with last year.

  That’s down to its production and sale of chips used in AI — a boom in AI development has lifted the firm’s forecast for Q2.

  In the first three months of this year, the firm also saw a 10-fold jump in profits.

  In this quarter, it said it is expecting its profit to rise to 10.4tn won ($7.54bn; £5.9bn), from 670bn won last year. Analysts had forecast 8.8tn won, according to LSEG SmartEstimate.

• Fri 5 July 2024 at 2:12 pm CEST

  10 homes geared up for outdoor entertaining

  

  The upside of living in a country with such unreliable weather is that we appreciate sunny days all the more – and for many people that means spending as much time in the garden as possible.

  If you love nothing better than throwing a summer party and are considering a move, finding somewhere with a well-designed outdoor entertaining area is bound to be a priority.

  All these for-sale properties fit the bill perfectly, you could be hosting a housewarming on your new patio sooner than you think.

  Find out where they are here

• Fri 5 July 2024 at 1:51 pm CEST

  Pound trades flat against the euro

  The pound is trading flat against the euro as traders appear unmoved by a landslide Labour victory in the British parliamentary election.

  Pierre Veyret, technical analyst at ActivTrades:

  “This indifference can be attributed to the result being widely anticipated following a series of embarrassments for the outgoing Conservative party.”

  “Moreover, the winners campaigned without adopting a fiscal stance that could potentially unsettle the markets.”

  “With economic prospects improving and the new administration expected to seek closer trading arrangements with the EU, there could be room for further pound gains over the euro.”

  “This is particularly relevant as the ongoing political turmoil in France could further weaken the single currency.”

• Fri 5 July 2024 at 1:30 pm CEST

  What to look forward to next week…

  With the morning now over and stocks still higher this afternoon, let’s take a quick look at what traders will be focusing on next week:

  • The CPI report and Fed Chair Powell’s testimonies to the Senate and House committees will be in focus in the US next week.

  • In Europe, all eyes are on the second round of French elections this Sunday.

  • The monthly GDP report is due in the UK and June CPIs will be out in Scandinavia.

  • Inflation in China and wages in Japan are among the highlights in Asia.

  • Large US banks will kick off the Q2 earnings season on Friday.

• Fri 5 July 2024 at 1:13 pm CEST

  What the new Labour government means for your money

  Now that the dust has settled on the election, and the red confetti swept away, we can take stock of what a Labour win will mean for your money, and how you can prepare.

  Unsurprisingly, for a campaign based on the idea of change, there are plenty of things in the pipeline.

  Read the full article here

• Fri 5 July 2024 at 12:54 pm CEST

  Bitcoin drops after exchange failure

  Bitcoin (BTC-USD) dipped close to 7% on Friday morning in London, dropping below its 200-day moving average to $54,330 (£42,506) as defunct exchange Mt Gox began moving coins around in preparation for repaying creditors.

  The Tokyo-based bitcoin exchange, which collapsed about a decade ago, was responsible for more than 70% of bitcoin transactions at its peak. In 2014 it declared bankruptcy after a ruinous hack, where thousands of bitcoin were stolen.

  Impending repayments — announced in June — include $7.7bn in bitcoin. Traders have since been on edge that those waiting for reimbursements will create a mass selling pressure on the market when they receive the cash.

  At the time of the hack bitcoin was trading at around $600. It’s current price is its lowest point since February.

• Fri 5 July 2024 at 12:33 pm CEST

  UK businesses ‘welcome clear election result’

  Stephen Phipson, chief executive of Make UK, which represents British manufacturers, said:

  “I congratulate Sir Keir Starmer on leading his party to a decisive victory. Business will welcome such a clear result and an end to the political and economic instability of the last few years which is essential for companies to now bring forward much needed investment.

  “Looking ahead, the new Government has a lot in its in-tray to address. First and foremost is the urgent need to kick start the UK’s anaemic growth levels of recent years and, boost investment in our infrastructure, without which we cannot address the many urgent priorities the Country faces at national and regional level.

  “A modern, long-term industrial strategy which tackles the skills crisis in particular will be key to delivering this growth.

  “Manufacturers stand ready to work with the new Government and all stakeholders as a matter of urgency to help deliver this.

• Fri 5 July 2024 at 12:09 pm CEST

  Shell suffers $2bn hit on biofuel project and refinery

  

  Shell (SHEL.L) expects to take a hit of up to $2bn (£1.6bn) after it paused construction work on one of Europe’s largest planned biofuel plants and sold a refinery in Singapore.

  The oil and gas giant said it expects the decision to stop building work on the biofuels plant in Rotterdam in the Netherlands, which it announced earlier this week, to cost up to $1bn.

  Meanwhile, it said the move to sell its Bukom refinery in Singapore will cost between $600m and $800m.

  The company’s share price slipped from 2,917.50p as markets opened on London to 2,897.50p, broadly in line with its trading levels earlier this week.

• Fri 5 July 2024 at 11:51 am CEST

  Gold at nine times its value when Tony Blair won

  Labour’s crushing victory has triggered a jump in the value of gold as investors seek a safe haven.

  An ounce of gold is today worth £1852, up 22% compared to this time last year and up 790% compared to the day of Tony Blair’s 1997 landslide election win.

  The safe-haven asset also gained on expectations that the Federal Reserve will trim interest rates before year-end, with traders looking ahead to US payrolls data for the next batch of clues on the outlook.

  Gold’s push higher this week extends a run of three quarterly gains, with prices hitting a record in May. The rally has been driven by hefty central-bank purchases and geopolitical tensions. Buying in Asia has also helped as local currencies fell, with investors seeking assets that preserved their value.

  Meanwhile the gold savings account TallyMoney has recorded a 20% spike in downloads of its savings app in the UK since Rishi Sunak called the election in late May.

  Cameron Parry, CEO of TallyMoney, said:

  “Britain’s electoral earthquake means big changes are coming, and this goes part of the way to explaining the big jump in demand for gold. In times of change, many people want to save in an asset they feel sure of.

  “Similar things happened when Tony Blair first swept to power in 1997. Then, as now, gold was embraced as a safe haven by investors.

  “Governments come and go, but gold always remains. And over time, the value of gold grows.

  “In fact it has risen by an annual average of 10.56% year after year since the start of the century, and it’s up by 22% since this time last year alone.

  “When you compare that to the miserly rates of interest paid on savings by conventional banks, you can see why Labour aren’t the only winners today – gold savers are too.”

• Fri 5 July 2024 at 11:32 am CEST

  UK housebuilders lead gains after Labour win

  UK housebuilders are leading gains on the FTSE 100 as housing was a key part of the Labour election manifesto.

  Stocks such as Persimmon (PSN.L), Vistry Group (VTY.L), Taylor Wimpey (TW.L) and Barratt Developments (BDEV.L) are among the top risers today after Labour pledged to build 1.5 million new homes over the next five years.

  Analysts at Investec said they expect the new government to restore mandatory housebuilding targets, streamline the planning system and increase the amount of social and affordable housing being built.

  Jefferies analysts led by Glynis Johnson said:

  For UK housebuilders, it’s less about the variation in macro outcome as a result of who wins, but more that a government led by Labour appears more supportive, engaged & focused on delivery of homes.

• Fri 5 July 2024 at 11:19 am CEST

  Goldman Sachs raises UK growth forecasts

  Goldman Sachs (GS) has raised its 2025 and 2026 economic growth forecasts for the UK after Labour’s landslide election victory.

  Goldman Sachs strategists led by Sven Jari Stehn said:

  “Firmer demand is likely to result in marginally higher wage growth and inflation, but the magnitudes involved suggest that the implications for the Bank of England are likely to be limited.”

• Fri 5 July 2024 at 11:07 am CEST

  Where did house prices fall?

  

  In England, the steepest rate of house price inflation was in the north west, up by 3.8% over the last year, to an average property price of £231,351.

  House prices in Scotland also rose, with a typical property now costing £204,663 — 1.6% more than the year before.

  In Wales, house prices grew annually by 2.7% to reach £220,197.

  Eastern England was the only region or nation across the UK to register a decline in house prices over the last year, where they now average £328,747, down 0.9% in June on an annual basis.

  London continues to have the most expensive prices in the UK, now averaging £536,306, up 0.9% year on year.

• Fri 5 July 2024 at 10:44 am CEST

  UK house prices fall slightly in June

  UK house prices fell slightly month-on-month in June, dipping 0.2% as the market held its breath amid general election campaigning and high interest rates. The fall was equivalent to less than £500 in cash terms.

  The average house price last month was £288,455 (compared with £288,931 in May), according to Halifax’s monthly monitor, with Northern Ireland recording the strongest annual house price growth in the UK.

  On an annual basis, house prices posted a seventh consecutive month of year-on-year growth — prices are 1.6% higher than the same point last year.

  “This continued stability in house prices — rising by just +0.4% so far this year — reflects a market that remains subdued, though overall activity has been recovering,” said Amanda Bryden, head of mortgages at Halifax. “For now it’s the shortage of available properties, rather than demand from buyers, that continues to underpin higher prices.”

  Mortgage affordability is still the biggest challenge facing both homebuyers and those coming to the end of fixed-term deals, she added.

• Fri 5 July 2024 at 10:23 am CEST

  Sterling best-performing currency against dollar this year

  Sterling has risen since Rishi Sunak called the election in late May, and is the strongest-performing major currency against the dollar this year, with a gain of 1.2%.

  Laura Foll, portfolio manager at Janus Henderson Investors, said:

  “It’s a breath of fresh air to be running equities in a market where the election is seen as a non-event.

  “I’m hoping we’re going back to an era where boring is good and politics treads lighter in people’s lives. It will be a more gradual lifting [of confidence].”

  Government borrowing costs were little changed on Friday, with the yield on the 10-year gilt rising by six basis points.

• Fri 5 July 2024 at 10:06 am CEST

  Pound rises after Labour’s landslide victory

  

  The pound ticked up slightly against the euro (GBPEUR=X) and dollar (GBPUSD=X) on Friday morning in London, as Keir Starmer’s Labour party were elected to government.

  Sterling was trading at $1.27, up around 0.1% before the opening bell in London. It was almost flat against the euro, trading at almost 1.18.

  As results continued to trickle in, Labour won 410 seats to the incumbent Conservative government’s 119. Prime minister Rishi Sunak has now conceded defeat.

  Labour’s election victory has been anticipated for weeks, as the party pulled more than 20 points ahead in some polls during campaigning. The muted reaction of sterling reflects the fact that there were few big surprises as counts trickled in on Thursday night, going into Friday.

  The pound has risen since the election was called, and is the strongest-performing major currency agains the dollar this year — gaining 0.3%, according to Reuters.

  Naeem Aslam, chief investment officer at Zaye Capital Markets, said:

  “The change in leadership from the Conservative party to the Labour party after a decade has made investors optimistic that finally we will have someone who can actually heal some of the self-inflicting injuries like Brexit and bring the economy back on track.”

  “This is due to the fact that the Conservative party primarily enriched the wealthy, while the rest of the nation saw their disposable income rapidly diminishing.”

• Fri 5 July 2024 at 9:45 am CEST

  Asia and US stocks overnight

  Asian shares were mostly lower overnight after solid gains in Europe, while the FTSE moved higher after Labour’s landslide election victory.

  The Nikkei (^N225) ended flat on the day in Japan, while the Hang Seng (^HSI) fell 0.9% in Hong Kong.

  The Shanghai Composite (000001.SS) was 0.3% down by the end of the session, hovering near its lowest levels since February.

  It came as the Japanese government reported that higher prices dented consumer sentiment more than expected in May, with household spending falling 1.8%.

  Across the pond on Wall Street, US markets were closed on Thursday due to the Independence Day holiday.

• Fri 5 July 2024 at 9:22 am CEST

  Coming up…

  Good morning, and welcome back to our markets live blog — as usual we will be bringing you all the latest news of what’s moving markets, and happening across the global economy.

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

  • 7am: Halifax house price index for June

  • 7am: German industrial production for May

  • 7.45am: France trade and industrial production for May

  • 10am: Eurozone retail sales for May

  • 1.30pm: US non-farm payrolls for June

  • 1.30pm: US unemployment rate