FTSE closes up 0.3% after good news on US inflation
The FTSE 100 closed 0.3% higher at 7846, rising in the afternoon after a surprisingly sharp decline in U.S. producer price inflation.
The index was flat for most of the day, remaining within 10 points of the open all afternoon despite disappointing GDP numbers.
However, after the US Bureau of Labor Statistics released its Producer Price Index figures, FTSE earnings rose as it continued to edge back towards 8000.
The biggest gainer of the day was mining company Antofagasta, while the biggest decliner was homebuilder Persimmon, which broke the trend in an otherwise positive day for the construction sector.
The richest man in the world, Bernard Arnault, is enriched by 10 billion euros
The world’s richest man, Bernard Arnault, added another 10 billion euros to his fortune as shares of LVMH surged after reporting stronger-than-expected first-quarter sales.
Revenue rose 17% thanks to the luxury goods business, which owns fashion houses Louis Vuitton and Marc Jacobs, as well as alcohol brands Moet and Hennessy and beauty salon Sephora.
LVMH shares are up 5% today, with results released after the close of trading yesterday.
Arnault owns nearly half of LVMH through a combination of directly held shares and through other companies.
No quick US-UK free trade deal, says Jeremy Hunt
Chancellor Jeremy Hunt said on Thursday a US-UK free trade deal much-vaunted by Brexiteers would not be done ‘imminent’, reducing the likelihood of it happening before the next general election.
He made the admission after US President Joe Biden met Rishi Sunak in Belfast on Wednesday. It is not believed that they discussed such a trade pact.
The opening of the prospect of a quick free trade agreement between the United States and the United Kingdom was one of the arguments made by Brexiteers ahead of the 2016 referendum.
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Fall in US producer price inflation
The producer price index in the United States fell 0.5% month-on-month, while prices rose only 2.7% year-on-year , which could be a key sign that the country is bringing prices back under control.
Alex Kuptsikevich, senior market analyst at FxPro, said the drop shocked experts and added it could make the Federal Reserve more likely to hold off on interest rate hikes,
“A real shock followed yesterday’s slight disappointment in the producer price CPI,” he said. “They fell 0.5% in March and the annual growth rate fell from 4.9% to 2.7%, the lowest since January 2021, but more importantly, it is close to the average of the 20 last years.
“For now, the market is celebrating the sharp divergence between expectations and facts by buying riskier assets and selling the dollar. Interest rate futures forecast a 40% chance that the Fed will leave the rate at current levels in early May This is still not a critical reversal, as a week and a month ago those odds were over 50% (and on March 13 there was an 18% chance of a decrease).
“This issue is slipping into the background and the Fed’s attention can now turn to wages and prices in the services sector. So far, the only solution to this problem is a drastic slowdown in economic growth. This is probably related to the moderate recession expected by the Fed this year. This could signal that the central bank is going to rein in monetary policy, contrary to market expectations.
Technology sector leads market share gains in the United States
Shares of US companies rose after markets opened in New York, with Netflix among the main gainers.
The S&P 500 was up 0.2% to 4102 and the Dow Jones rose 20 points to 33666. The Nasdaq index rose 0.9% to 12038. Among the big gainers on the Nasdaq was Netflix, which is up 3% to $340.64.
London is the UK’s worst city for nepotism with half of workers getting jobs through connections
London has the highest rate of ‘Nepo workers’ in the UK, as half of Londoners have obtained employment through personal connections.
A poll by recruitment software firm Applied of 2,000 working-age adults found the capital beat Liverpool, Belfast and Plymouth to be the UK’s top city for nepotism, with exactly 50% saying that the connections had given them a job.
Of these workers, one in eight said they moved into senior management because of personal ties, while 38% moved into middle management.
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US stocks set to gain despite recession fears
Shares of US companies are expected to rise today, after falling yesterday afternoon amid renewed fears of a recession.
According to the futures markets, the S&P 500 is expected to gain 0.4% to 4135, while the Dow Jones is expected to rise 0.2% to 33890 and the Nasdaq 0.6% to 13031.
US stocks got off to a strong start yesterday, but minutes from the Federal Reserve’s March policy meeting worried investors late in the day, leaving major indexes unchanged.
Glencore’s enhanced mega-merger bid rejected by Teck
Glencore’s improved $22 billion proposal to acquire another mining company, Teck Resources, has been rejected by Teck’s board.
Teck had rejected a previous all-stock offer, which planned to subsequently divest the combined company’s coal operations.
Glencore has returned with a new offer including a cash option for coal operations, giving Teck shareholders the option of a “full exit from coal”.
However, Teck’s board said the new deal still doesn’t increase value for its shareholders.
“Glencore has made two opportunistic and unrealistic proposals that would transfer significant value to Glencore at the expense of Teck shareholders,” said Teck Chairman Sheila Murray. “Teck’s proposed separation creates a significantly broader range of opportunities to maximize value for Teck’s shareholders.
“The Special Committee and the Board continue to recommend that shareholders vote for the proposed separation between Teck Metals and EVR as the best path to fully realize the greatest value.”
HSBC could leave iconic Canary Wharf tower for Fleet Street
HSBC is considering abandoning its Canary Wharf tower in favor of a move to the former Goldman Sachs offices on Fleet Street, according to reports.
Bloomberg reports that the global banking giant is considering “a handful” of new office space in London that would be available when the lease expires in its 200-meter high skyscraper at 8 Canada Square in 2027.
However, the bank may also choose to rearrange its current headquarters and remain there.
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John Lewis looks to the ‘tween’ market as it expands its children’s fashion business
John Lewis has announced an expansion of its children’s fashion business as it seeks a growing share of the lucrative ‘tween’ market.
The department store is launching its first collection of own-brand tweens for ages seven to 12 as part of an expansion of over 2,100 lines alongside 10 new brands.
The children’s clothing market will be worth £7.3 billion by 2027, up from £6.8 billion last year, according to Mintel.
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