International Monetary Fund managing director Kristalina Georgieva speaks during a news conference at the World Bank/IMF Spring Meetings in Washington. (Jose Luis Magana, Associated Press)
Wall Street took its lead from the FTSE 100 (^FTSE) and European stocks on Thursday despite Kristalina Georgieva, the boss of the International Monetary Fund (IMF), warning governments to prepare for the next shock to their economies with fiscal consolidation.
She said: "In a world of more frequent shocks we know we will be tested again.”
Quoting former British prime minster Winston Churchill, she added: “This is no time for ease and comfort. It is time to dare and endure.”
Her comments come during a press conference in Washington as part of its spring meetings.
London’s benchmark index was 0.4% higher by the end of the day
Germany's DAX (^GDAXI) rose 0.5% and the CAC (^FCHI) in Paris headed 0.7% into the green
Elsewhere, the US jobs market remained tight with the number of Americans filing new claims for unemployment benefits coming in unchanged at 212,000 last week – a historically low level.
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It also came as a string of strong corporate results offset news that sales of electric cars across the European Union tumbled by over 11% last month.
New figures from the European Automobile Manufacturers Association (ACEA) reported this morning that new car registrations fell for the first time this year in March, dropping by 5.2% to around one million units.
Investors cheered news from the likes of easyJet (EZJ.L) which boosted other airline stocks after it cut losses despite taking a £40m hit from the Middle East conflict.
Follow along for live updates throughout the day:
LIVE COVERAGE IS OVER21 updates
LaToya Harding
Blog close and recap
Well that's all from us today, thanks for following along. Be sure to join us again tomorrow for more.
Here's a quick recap of some of the top stories from today:
Electric vehicle sales fall in Europe
IMF boss quotes Churchill and warns of coming shocks
EasyJet narrows losses despite Middle East conflict
Deliveroo sees weak trading in UK and Ireland
US jobless claims remain near lows
TSMC posts first profit growth in a year
Iran oil exports hit six-year high
Bitcoin price falls ahead of halving as ETF inflows slow
Catch you all tomorrow, have a good ev
LaToya Harding
US imposes sanctions on Iranian drone makers
America as unveiled a fresh round of sanctions against Iranian individuals and companies involved in the production of drones after Tehran’s attack on Israel.
The US Treasury said on Thursday it was targeting 16 individuals and two companies that help the production of unmanned aerial vehicles, such as drones.
This is in co-ordination with measures also announced by the UK.
Janet Yellen, US Treasury secretary, said:
“We will continue to deploy our sanctions authority to counter Iran with further actions in the days and weeks ahead.”
LaToya Harding
US home sales fall in March
Sales of existing US homes fell in March as the number of overall transactions was held back by high mortgage rates.
The National Association of Realtors (NAR) said that existing home sales fell 4.3% from February to a seasonally adjusted 4.19 million rate.
Lawrence Yun, NAR chief economist, said: “Though rebounding from cyclical lows, home sales are stuck because interest rates have not made any major moves.”
It added that home sales were down 3.7% from a year ago.
It comes as mortgage rates have risen over the past two years after the Federal Reserve rapidly hiked interest rates to 23-year highs to tackle runaway inflation.
LaToya Harding
US jobless claims remain near lows
The US jobs market has remained tight with the number of Americans filing new claims for unemployment benefits coming in unchanged at 212,000 last week — a historically low.
According to the Labour Department, the four-week average of claims, which softens some of the weekly volatility, was also unchanged at 214,500.
Weekly unemployment claims are considered a proxy for the number of US layoffs in a given week and a sign of where the job market is headed.
IMF boss quotes Churchill and warns of coming shocks
International Monetary Fund Managing Director Kristalina Georgieva speaks during a news conference at the World Bank/IMF Spring Meetings in Washington, Thursday, April 18, 2024. (AP Photo/Jose Luis Magana) (Jose Luis Magana, Associated Press)
Kristalina Georgieva, the boss of the International Monetary Fund (IMF), warned governments to prepare for the next shock to their economies with fiscal consolidation.
She said: "In a world of more frequent shocks we know we will be tested again.”
Quoting former British prime minster Winston Churchill, she added: “This is no time for ease and comfort. It is time to dare and endure.”
Her comments come during a press conference in Washington as part of its spring meetings.
LaToya Harding
Wall Street set to open higher
The US stock market is set to open in around a quarter of an hour. Let's have a quick look at how things are shaping up...
Wall Street futures are currently in the green, with tech and chip stocks set to recover from their sell-off yesterday.
It comes as Cleveland Fed President Loretta Mester said she expects price pressures to ease further this year, allowing the central bank to reduce borrowing costs, but only when it is “pretty confident” about inflation hitting the 2% target.
Money market participants see a 46% chance of the Fed cutting interest rates in July, according to the CME FedWatch Tool.
LaToya Harding
UK job adverts decline
The total number of online job adverts decreased by 2% last week compared to the week before, the Office for National Statistics has revealed.
This came in 19% lower than a year ago during the same period.
Figures from @Adzuna show the total number of online job adverts on 12 April 2024 decreased by 2% when compared with the previous week 💻
— Office for National Statistics (ONS) (@ONS) April 18, 2024
LaToya Harding
TSMC posts first profit growth in a year
Taiwan Semiconductor Manufacturing Company (TSM) has revealed a better-than-projected revenue outlook amid rising demand for AI-related products.
The Taiwanese chipmaking company, whose clients include Apple (AAPL) and Nvidia (NVDA), stuck with plans to spend as much as $32bn (£25.66bn) in 2024.
TSMC has gained about $340bn of market value since an October 2022 trough, riding bets it will become a top winner of a global boom in AI development. It posted a better-than-expected rise of 9% in net income to NT$225.5bn ($7bn) for the March quarter.
“Looking at 2024 as a whole, macroeconomic and geopolitical uncertainty persists, potentially weighing on consumer sentiment and end-market demand,” Wei told analysts on a conference call.
Laster this month, TSMC also said it would build a third semiconductor factory in Arizona, raising its total investment in the United States to $65bn.
It already had plans to build two plants in Arizona, and another one in Germany.
Bitcoin price falls ahead of halving as ETF inflows slow
Bitcoin has fallen to its lowest level in over a month as inflows from spot bitcoin exchange-traded funds (ETFs) begin to waver.
The world's largest digital asset by market capitalisation (BTC-USD) decreased by over 3% in the past 24 hours, falling below $62,000 (£49,709). The downturn saw the digital asset hit a monthly low of $60,181 on Wednesday evening UK time, a price not seen since the middle of March.
The downturn comes after a slowing of inflows into spot bitcoin ETFs from fund managers such as Franklin Templeton (BEN), and ahead of Saturday's bitcoin halving event.
Spot bitcoin ETF trading volumes have declined from their early March peak. Since the beginning of this week, many ETF issuers have even recorded zero flows.
Tuesday saw another day of spot ETF net outflows, totalling $58m. This was accelerated by $79.4m and $12.9m outflows from the Grayscale Bitcoin Trust (GBTC) and ARK 21Shares Bitcoin ETF (ARKB), respectively.
However, IBIT, BlackRock's (BLK) iShares Bitcoin Trust ETF, has continued to post daily positive flows, with $25.8 million in inflows recorded on Tuesday.
Moneyfacts has revealed that average borrowing rates are unchanged on Thursday.
The average 2-year fixed residential mortgage rate today is 5.81%. This is unchanged from the previous working day.
The average 5-year fixed residential mortgage rate today is 5.39%. This is unchanged from the previous working day.
Following Wednesday's smaller-than-expected inflation fall, money markets are betting a high chance that there are two cuts to UK interest rates this year, bringing the bank rate down to 4.75% in December from 5.25% today.
LaToya Harding
Foxtons cheers strong start to 2024
London estate agent Foxtons’ has revealed sales revenue growth of 17% to £9.5m in the first quarter of 2024.
The progress meant the group took a larger share of the market.
Lettings revenue rose 5% during the quarter to £24.0m, with Foxtons adding that rental prices have “stabilised” as supply and demand of tenancies have normalised.
Guy Gittins, chief executive, said:
We entered the second quarter with the highest value under-offer sales pipeline since the 2016 Brexit vote, giving us optimism for the rest of the year.
LaToya Harding
Bundesbank: Germany likely avoided recession
The German economy may have avoided a recession at the start of the year, according to the Bundesbank.
The comments come despite earlier predictions that Europe’s largest economy saw output shrink for a second consecutive quarter between January and March, while GDP contracted 0.3% in the final quarter of 2023.
It said the first three months of the year may well have seen a “slight increase” in GDP, Bloomberg reported.
In its monthly report, it said:
Germany’s economic situation has brightened somewhat, but it remains weak at its core.
It’s therefore not yet certain that the increase in economic output will continue in the second quarter.
LaToya Harding
Hipgnosis agrees to Alchemy takeover
Justin Bieber performs his song (REUTERS / Reuters)
Hipgnosis has agreed to a $1.4bn (£1.1bn) takeover by Alchemy Copyrights.
The music royalties firm said Alchemy, trading as Concord, struck the deal to buy the business for the equivalent of £0.932 per share.
The fund, which owns the back catalogues for artists including Justin Bieber and Shakira, launched a strategic review last year to assess a potential sale and other options.
Robert Naylor, chairman of Hipgnosis, said:
“The acquisition represents an attractive opportunity for our shareholders to immediately realise their holding at a premium, mitigating the risks we see ahead to achieving a material improvement in the share price.
“At the same time, the board is confident that Concord, one of the world’s leading independent music companies, is the right owner to take on the Hipgnosis catalogue and manage it in the interests of composers and performers.”
LaToya Harding
EasyJet narrows losses despite Middle East conflict
EasyJet (EZJ.L) shares climbed more than 3% on Thursday, to the top of the FTSE 100, as it narrowed its losses despite losing revenue from cancelled flights to Israel and Jordon last winter.
The budget airline took a £40m hit from the Middle East conflict but still managed to trim losses for the six months to the end of March by over £50m, to between £340m and £360m. This was against losses of £411m a year earlier.
It also benefitted from the early timing of Easter this year, which led to more demand for flights during March.
"The importance that consumers place on travel coupled with easyJet’s trusted brand has driven good demand for our flights and holidays. Our growth and focus on productivity have reduced winter losses by more than £50m," Johan Lundgren, CEO of easyJet, said.
“We have further enhanced our network with the launch of new bases in Alicante and Birmingham providing greater choice for consumers across Europe."
Between October and March, passengers numbers rose 8% year-on-year, while average fares paid increased 9%.
LaToya Harding
Best UK mortgage deals of the week
Average mortgage rates are unchanged from the previous week but overall homeowners are still struggling to find a decent mortgage rate.
The average rate on a two-year fixed deal this week stood at 5.74%, while for a five-year deal, rates came in at 5.24%, according to figures from Uswitch.
The market appears to be volatile, as the higher costs providers are paying to fund mortgage lending have pushed many lenders to axe some of the cheaper deals. Still, some lenders such as NatWest and Halifax have slightly improved their offers.
“Again a fairly static week for average rates, lenders both increasing and decreasing their deals have likely maintained this balance. Whereas Santander and TSB have both made reductions on some of their fixed-rate options, the Bank of Ireland have increased some of theirs. Virgin Money, on the other hand, has both reduced some deals and increased others in their range.
"While recent speculation was that the base rate would fall in June, many experts believe it could now be August, or even later when we finally start to see the base rate and mortgage rates fall. This is largely due to the minimal fall in inflation announced yesterday (from 3.4% to 3.2%), which it seems, has already impacted swap rates. This may result in increased mortgage rate volatility in the coming weeks."
European benchmarks have rebounded today, pushed higher by producer manufacturing, consumer durables, and financial stocks.
Pierre Veyret, technical analyst at ActivTrades, said:
“However, the lack of significant geopolitical or monetary improvements makes us believe today’s price action may be a technical correction rather than a bullish reversal.
"Indeed, these positive moves on global stocks come as the sell-off in treasury markets halts and the USD takes a break from its bullish trend, easing some of the pressure on riskier assets.
“These moves may come from profit-taking / short-sell buybacks, which could mean the bearish trend could resume soon for equity markets.
“Even if a lateral consolidation could still take place in the short term, as long as traders are pricing in a “higher for longer” monetary narrative, a bullish trend resurgence won’t be the most likely scenario for stocks.”
LaToya Harding
Iran oil exports hit six-year high
Iran oil exports have hit a six-year high, boosting its economy as it gears up for fresh sanctions after its attack on Israel.
According to new data from Vortexa, Tehran sold an average of 1.56 million barrels a day during the first three months of the year,
Iran’s economy has been boosted by $35bn a year as a result, the Financial Times said, as production reached its highest level since the third quarter of 2018.
Almost all of the exports have been sent to China.
LaToya Harding
Deliveroo sees weak trading in UK and Ireland
Deliveroo posted weaker trading across the UK and Ireland at the start of the year, citing an “uncertain” consumer backdrop.
The takeaway group order numbers in the region came in flat in the first quarter, despite rising 1% in the previous three months.
Sales by gross transaction value (GTV) rose 6%, down from 7% in the fourth quarter of 2023.
Will Shu, chief executives, aid the UK and Ireland consumer environment “remains stable but uncertain”.
However, overall, Deliveroo said it returned to growth in order numbers group-wide in the first quarter, with a 2% increase against a 3% fall over 2023 as a whole.
Group GTV increased 6% due to better performance across France, the United Arab Emirates and Hong Kong.
LaToya Harding
Electric vehicle sales fall in Europe
File photo dated 08/03/22 of a Tesla electric vehicle being charged in Hayes, west London. Households with insulation and clean tech such as heat pumps and electric cars are more (John Walton, PA Images)
Electric vehicle sales tumbled in Europe last month with demand particularly drying up in Germany.
According to the European Automobile Manufacturers’ Association, sales of battery-powered cars dropped 11.3% to 134,397 units, whilst sales in Europe’s largest economy fell 28.9%.
New car registrations fell for the first time this year during the month, dropping by 5.2% to around one million units.
The timing of the Easter holidays negatively impacted sales, ACEA said, with petrol sales down 10.2% and diesel registrations declining by 18.5%.
However, hybrid-electric car registrations rose by 12.6%.
🚨 BREAKING 🚨
📊 🚗 European car sales figures for March are fresh off the press!
📈 Year-on-year new EU car sales decreased by 5.2%. This marks the first decline in car sales of the year
🔋 The #batteryelectric market share slipped to a 13% share from last year’s 13.9%
Stocks in Asia advanced overnight despite a fall in technology stocks on Wall Street.
The Nikkei (^N225) rose 0.3% on the day in Japan, while the Hang Seng (^HSI) rose 1% in Hong Kong. The Shanghai Composite (000001.SS) was 0.1% up by the end of the session.
Across the pond, the S&P 500’s (^GSPC) suffered its worse losing streak since the start of the year, losing 0.6% to 5,022.21.
The Dow Jones (^DJI) fell 0.1% to 37,753.31, and the tech-heavy Nasdaq Composite index (^IXIC) dropped 1.2% to 15,683.37.
Elsewhere, the yield on benchmark 10-year US Treasury bonds dropped to 4.58%, from 4.66% late on Tuesday.
LaToya Harding
Coming up...
Good morning, and welcome to our live markets blog. Be sure to stay tuned to stay updated with what's happening across the global economy, and what's moving markets.
Here's a quick look at what's on the agenda for today.
7am: Trading updates: Nokia, Centamin, Dunelm, AJ Bell, Rentokil
7am: EU car sales for March
8am: EU Current Account
10am: Eurozone construction output for February
1.30pm: US weekly jobless data
Watch: What is a recession and how do we spot one?
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Interest rate hikes would have very little if any, impact on the price of tobacco, petrol, food, alcohol or child care. So why are they deemed the answer?
German inflation rose slightly in April due to higher food prices and a smaller drop in energy prices than in previous months, preliminary data from the federal statistics office showed on Monday. German consumer prices, harmonised to compare with other European Union countries, rose 2.4% in April, compared with 2.3% year-on-year in March. "The downward trend in the German inflation rate that has been observed for a year and a half may have come to an end for the time being," Commerzbank economist Ralph Solveen said, adding that the inflation rate is likely to rise again in coming months.
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The Italian government will on Tuesday unveil an economic package focused on temporary tax breaks to firms that hire staff on open-ended contracts and a cash bonus of up to 100 euros ($107) for low earners, officials said. The measures, which could pile further pressure of Italy's creaking public finances, are being proposed about a month before European elections which will test the popularity of Prime Minister Giorgia Meloni's right-wing coalition. Italy in 2023 posted the widest budget deficit in Europe as a proportion of gross domestic product (GDP), and the government says public debt, already the second highest in the euro zone, will rise further through 2026.
China's finance ministry on Monday urged qualified financial institutions to "actively participate" in government bond trading when the country expands its retail-focused OTC market next month, as Beijing prepares to ramp up treasury issuance. All bonds issued by the central and local governments can be traded on the over-the-counter (OTC) market through bank outlets, the Ministry of Finance said in a statement. China's central bank has said that starting on May 1, the OTC market will broaden the type of bonds eligible for trading.
Over the past several years, rising housing prices and mortgage rates have pushed many would-be homebuyers out of the real estate market. Homeownership is unaffordable for many, but the U.S. Treasury...
Inflation showing no recent sign of slowing or narrowing in scope leaves U.S. Federal Reserve policymakers challenged this week over how to characterize their next steps even as the countdown to a contentious U.S. presidential election continues. The Fed is seen holding its benchmark interest rate steady at 5.25%-to-5.5% at its April 30-May 1 meeting, and a key judgment in the current policy statement - that inflation "remains elevated" - may have to remain in place after the pace of price increases accelerated over the first three months of the year after steadily slowing through 2023. Details of the most recent price reports, moreover, showed high inflation lodged across a wide array of goods and services, something current voters on interest rate policy including Atlanta Fed President Raphael Bostic and Richmond Fed President Thomas Barkin have focused on as a reason to be wary of cutting interest rates.
(Reuters) -A bond market anomaly that has reliably predicted a U.S. recession in the past may normalize this year in a highly unusual manner. The market signal, called a yield curve, has been upside down since early July 2022, with investors getting less to lock up their money for longer periods than they are for shorter durations. In the past, yield curves typically become right-side up as an economic slowdown leads the Federal Reserve to cut interest rates, bringing down yields on near-term bonds that are sensitive to policy rates, a phenomenon called bull steepening.
The Federal Open Market Committee (FOMC) decision on interest rates will be announced on Wednesday, adding to a week that also includes highly anticipated Big Tech earnings reports and the closely watched jobs report. To provide insight into what these events could mean for inflation outlooks, 22V Research President Dennis DeBusschere joins Market Domination. DeBusschere believes that the Fed will maintain higher interest rates for an extended period until inflation is "under control." DeBusschere notes that inflation "keeps creeping higher," making it "critical" to rein it in. He notes surprise that yields haven't risen higher given the persistence of hot inflation data. According to DeBusschere, the wage growth metric is "critical" for curbing inflation. While wage growth has moderated, DeBusschere explains that it "stalled," fueling concerns that inflation could remain elevated. This, in turn, could lead to higher unemployment rates and "tighter financial conditions." For more expert insight and the latest market action, click here to watch this full episode of Market Domination. Editor's note: This article was written by Angel Smith
Seth Winnig/Getty The third week of Donald Trump’s criminal trial in New York got off to an aggressive start on Tuesday morning, when the former president was swiftly fined $9,000 by the judge for repeatedly making public comments about jurors and witnesses—ignoring the court’s gag order that sought to stymie an ongoing MAGA intimidation campaign.But when the judge’s order was filed minutes later, it became clear the that Trump is also receiving a final warning: stop the threatening rhetoric or
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