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Europe down and US stocks tepid as markets crunch rate cut odds

Lucy Harley-McKeown
Updated
FILE PHOTO: U.S. Federal Reserve Chair Jerome Powell holds a press conference following a two-day meeting of the Federal Open Market Committee on interest rate policy in Washington, U.S., May 1, 2024. REUTERS/Kevin Lamarque/File Photo
US markets made cautious moves as they look to central bank speakers later on Friday. (Reuters / Reuters)

The mood among European stocks was lukewarm on Friday as a key inflation data point came in as expected. US markets made cautious moves as they look to central bank speakers later in the day.

  • The FTSE 100 (^FTSE) and Germany's DAX (^GDAXI) fell 0.1% and 0.2% respectively, while the CAC (^FCHI) pulled back 0.2%.

  • The pan-European STOXX 600 (^STOXX) was 0.1% lower at the close.

  • US stocks held steady as markets opened, with the S&P 500 (^GSPC), the Dow (^DJI) and the Nasdaq (^IXIC) seeing small gains.

  • Earlier on Friday, Eurozone annual inflation came in at 2.4% for April, charting a flat line from March and bolstering expectations of a rate cut for the bloc before the summer rounds out. The figures met expectations.

  • Core inflation, a reading that strips out volatile indicators, hit 2.7% for April.

  • Elsewhere, it's a quiet day on the macroeconomic calendar, with an update from property development firm Land Securities Group (LAND.L) the main highlight. A write down of the value of its property portfolio and pretax loss £341m knocked the stock 2.7% by the end of the day.

Follow along for live updates:

LIVE COVERAGE IS OVER18 updates
  • Lucy Harley-McKeown

    That's all from me

    Thanks for reading! Head over to our US site for more market moving stories.

  • Lucy Harley-McKeown

    GSK ditches Haleon

    GSK (GSK.L) has raised £1.2bn after offloading its last remaining stake in Sensodyne and Advil maker Haleon (HLN.L), nearly two years after spinning off the consumer healthcare business.

    The pharma giant initially retained a 12.9% stake in Haleon after its IPO and, having now sold its shares, has raised a total of around £3.9bn.

    GSK said in a statement this morning: “GSK's exit of its position in Haleon is consistent with its previous commitments to monetise its holding in a disciplined manner.”

    Haleon was formed in 2019 by the merger of the consumer healthcare businesses of British pharmaceutical group GSK and US rival Pfizer, sitting as a joint venture within GSK.

    It was then spun out of GSK as a standalone business listed on the London Stock Exchange in July 2022.

  • Lucy Harley-McKeown

    Stocks to watch next week

    Our very own Pedro Goncalves has the scoop on the stocks to watch next week. Featuring AI chip star Nvidia (NVDA), Marks and Spencer (MKS.L) and Ryanair (RYA.IR).

    READ MORE HERE

  • Lucy Harley-McKeown

    What US stocks are doing at the open

  • Lucy Harley-McKeown

    Meme stocks in the spotlight in premarket

    Reddit (RDDT) shares jumped as much as 14% in pre-market trading, not far off its highest close of $65.11 hit in March. The social media platform has signed a partnership with OpenAI that will see ChatGPT integrate content from its forums.

    Meanwhile, GameStop (GME) shares fell after the games retailer said it expects first-quarter sales to drop as shoppers shift to online outlets. Shares in the meme stock soared at the start of the week in an echo of the 2021 frenzy, but the rally has turned into a slide in recent days.

  • Lucy Harley-McKeown

    Trending ticker: Tesla

    Tesla faces a climb up “Mount Everest” as it tries to persuade shareholders to approve a relocation to Texas and sign off yet again on a $56bn (£44.26bn) pay deal for Elon Musk, according to the electric car company’s chair.

    Tesla chair Robyn Denholm pointed out the significance of receiving approval from its shareholders, stressing that their decision is "important" for "corporate America as well,” in an interview with the FT.

    The controversial pay deal has already been backed once by shareholders, back in 2018, but was vetoed by a Delaware judge in January.

    Musk has criticised the decision and has asked shareholders to move Tesla out of Delaware, something he has already done with SpaceX. However, Denholm said that Musk remains committed to the EV maker even if he loses the upcoming vote.

    “There is always a risk, but he’s not holding a gun to anybody’s head . . . He hasn’t said one way or another quite frankly. And do I believe he’s committed to Tesla? Absolutely.”

  • Lucy Harley-McKeown

    UK energy price cap forecast to drop over £100 per year

    The Guardian's live blog is reporting that the energy price cap looks set to shrink by 7% over the summer, the equivalent to a more than £100 per year saving.

    Cornwall Insights estimated the bill for a typical dual fuel household would drop to £1,574 per year, down from £1,690 per year.

    UK households had faced a two-pronged squeeze on energy affordability as supplies of oil and gas were restricted both by the war in Ukraine and the conflict in the Middle East.

  • Lucy Harley-McKeown

    Full story: Eurozone figures

    FILE PHOTO: European Central Bank (ECB) president Christine Lagarde speaks during a press conference following the Governing Council's monetary policy meeting, in Frankfurt, Germany April 11, 2024. REUTERS/Kai Pfaffenbach/File Photo
    FILE PHOTO: European Central Bank (ECB) president Christine Lagarde speaks during a press conference following the Governing Council's monetary policy meeting, in Frankfurt, Germany April 11, 2024. REUTERS/Kai Pfaffenbach/File Photo (REUTERS / Reuters)

    READ MORE HERE

  • Lucy Harley-McKeown

    Company insolvencies on the up

    New data highlights an increase in company insolvencies in Wales and England, as high interest rates continue to put pressure on businesses.

    The insolvency service reported that company insolvencies jumped by 18% in April to 2,177, including 300 compulsory liquidations, 1,715 creditors’ voluntary liquidations (CVLs), 144 administrations and 18 company voluntary arrangements (CVAs).

  • Lucy Harley-McKeown

    ... And the top fallers

    Data: Hargreaves Lansdown
    Data: Hargreaves Lansdown
  • Lucy Harley-McKeown

    Here are the top risers in the FTSE this morning

    Data: Hargreaves lansdown
    Data: Hargreaves lansdown
  • Lucy Harley-McKeown

    Pound rises against Euro, European stocks lower

    Markets seem lately unfazed by the Eurozone CPI print, with a slight move lower for the Euro against the pound.

    European markets started the morning lower and are trending slightly higher after the data release.

  • Lucy Harley-McKeown

    Eurozone inflation hits 2.4% in April

    Here's the latest from the bloc:

    The euro area annual inflation rate was 2.4% in April 2024, stable compared to March 2024. A year earlier, the rate was 7.0%. In the EU, the annual inflation was 2.6% in April 2024, stable compared to March 2024. A year earlier, the rate was 8.1%. These figures are published by Eurostat, the statistical office of the European Union.

  • Lucy Harley-McKeown

    Hunt to pledge lower taxation

    PA has the lines from Hunt's speech:

    “Labour like to criticise tax rises this parliament thinking people don’t know why they have gone up – the furlough scheme, the energy price guarantee and billions of pounds of cost-of-living support, policies Labour themselves supported.

    “Which is why it is playground politics to use those tax rises to distract debate from the biggest divide in British politics – which is what happens next.

    “Conservatives recognise that whilst those tax rises may have been necessary, they should not be permanent. Labour do not.”

    He will say that “the lower-taxed economies of North America and Asia generally grow faster than the higher-taxed economies of Europe”.

    The Conservative are “prepared to do the hard work” to bring down taxes “because we know doing so will lead to more growth”.

    Mr Hunt will stress that the Tories’ “ultimate aim” is to continue cutting national insurance until it is eliminated, but only “when it is affordable to do so”.

    “But with no plans to pay for their spending pledges, taxes will go up under any future Labour government as sure as night follows day,” Mr Hunt will say.

    “And taxes will go down under a Conservative government because we will do the hard work necessary to keep our economy competitive.”

    Shadow Treasury financial secretary James Murray said: “There is nothing Jeremy Hunt can say or do to hide the fact that working people are worse off after 14 years of economic failure under the Conservatives.

    “The tax burden is at a 70-year high and the average household is forecast to be £870 worse off under Rishi Sunak’s tax plan.

    “Now Jeremy Hunt is desperately trying to distract from reality with his reckless £46 billion unfunded tax plan to abolish national insurance.

    “It is time for change. Labour will deliver economic stability with tough spending rules, so we can grow our economy and keep taxes, inflation, and mortgages as low as possible.”

  • Lucy Harley-McKeown

    Overnight in Asia

    It was a mixed day of trade in Asia, with Japan's Nikkei (^N225) 0.3% lower and stocks across China on the up.

    The Hang Seng (^HSI) rose 0.8% and the SSE Composite (000001.SS) rallied nearly 1%, despite warnings from central bank officials in the US throwing earlier hopes of rate cuts into doubt.

    New data out of China showed that growth in industrial production was stronger than expected in April pointing to a recovery in manufacturing. Meanwhile, sales data missed expectations alongside fixed asset investment.

  • Lucy Harley-McKeown

    And here's what US futures look like

    Stocks are tepid in pre-hours trading across the pond

  • Lucy Harley-McKeown

    Overnight in the US

    Here's the dispatch from our US team:

    US stocks could not reach new records on Thursday, despite the Dow Jones Industrial Average (^DJI) touching 40,000 for the first time ever.

    The Dow finished the day down 0.1%, closing at 39,869 after briefly surpassing its new price milestone earlier in the session. The tech-heavy Nasdaq Composite (^IXIC) fell about 0.3%, while the S&P 500 (^GSPC) dropped around 0.2%. The S&P closed just below 5,300 after eclipsing that number for the first time on Wednesday.

    Earlier on Thursday, three Fed officials — Cleveland Fed President Loretta Mester, New York Fed President John Williams and Richmond Fed President Thomas Barkin — warned of higher-for-longer interest rates while speaking at separate events. That commentary appeared to take the wind out of stocks' recent rally.

  • Lucy Harley-McKeown

    Good morning!

    Hello from London. Lucy Harley-McKeown here, ready to take you into the weekend with the latest market news. On the slate today:

    • Speech by Bank of England's MPC member Catherine Mann

    • European CPIs

    • Various Federal Reserve updates in the US

    Let's get to it.

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