Wall Street retreats as tech loses steam and FTSE closes in red - Yahoo Finance UK
FTSE finished in the red as Wall Street tech rally faded. (Reuters / Reuters)
European markets finished in negative territory on Tuesday, with the FTSE losing early session gains that tracked the tech rally on Wall Street.
The FTSE 100 (^FTSE) lost 0.1% to close at 7,684 point, while the CAC 40 (^FCHI) in Paris lost 0.3% to 7,429 points. In Germany, the DAX (^GDAXI) slipped 0.2% to 16,682. Europe’s Stoxx 600 (^STOXX) retreated 0.2%.
On Wall Street, stocks moved lower as the previous day's tech rally lost steam after a Samsung (005930.KS) profit warning took the shine off the sector.
The Dow Jones (^DJI) lost 0.7% to 37,439 points while the S&P 500 (^GSPC) slipped 0.3% to 4,747 points. The tech-heavy NASDAQ (^IXIC) lost 0.2% to 14,815.
This week sees the release of US inflation figures on Thursday followed the next day by results from banking giants including JPMorgan Chase (JPM) and Citigroup (C).
In Asia, the Hang Seng (^HSI) in Hong Kong finished flat at 16,223 points, while the Shanghai Composite (000001.SS) rose 0.2% to 2,893 points. Tokyo’s Nikkei 225 (^N225) gained over 1.1% to 33,763 points, a 33-year high.
Reports this week are likely to show deflation deepened last month in China, while growth in imports and exports cooled.
The pound (GBPUSD=X) was lower against the dollar, trading at $1.2700. Sterling (GBPEUR=X) was also weaker against the euro, trading at €1.1629.
Meanwhile, Brent crude (BZ=F) rose after sliding in the previous session and was trading at around $77 per barrel as markets weighed Middle East tensions against demand worries and rising OPEC supply.
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Interest rate cut hopes are fading across the pond
Investors are worried that interest rates across the pond may not be cut as quickly as hoped.
Fiona Cincotta, senior financial market analyst at City Index, said:
"Attention remains on inflation data, which is due later this week and will offer further clues about the Federal Reserve’s path for interest rates.Federal Atlanta Fed president Raphael Bostic, a voting member this year, said he sees the first cut in the third quarter and leans towards keeping rates high while inflation is above 2%. His hawkish comments have weighed on stocks and boosted the US dollar."
Chancellor Hunt holds talks with City bosses
Chancellor Jeremy Hunt held talks with some of the City's top business leaders this morning in a bid to inject fresh momentum into London’s flagging market for new company listings.
According to Sky News, the chief executives of asset managers Abrdn and Schroders and their counterpart at HSBC Holdings were among those scheduled to attend a breakfast summit with Hunt.
Revealed: The bosses of Abrdn, HSBC and Schroders met the chancellor this morning to discuss fledgling plans for a UK ISA aimed at bolstering investment in British companies amid concerns about the competitiveness of London’s public equity markets. https://t.co/TcFKHjPvxO
An unexpectedly weak December has forced recruitment specialist Hays (HAS.L) into dishing out a profit warning and has driven its shares back towards a three-year low, according to AJ Bell investment director Russ Mould.
“Company management is unsure as to whether this is just a blip, caused by deferred decision making, or a sign of a more sustained slowdown in the jobs market, but equity investors will be hoping it is the former given how share prices are discounting a soft economic landing rather than a hard one.
“Hays’ chief executive Dirk Hahn, who only took the post on 1 September last year, has flagged a 12% year-on-year drop in net fees in the second quarter of the company’s fiscal year to June 2024. As a result, Mr Hahn now expects first-half operating profit to undershoot expectations and drop to around £60m, from £97m in the equivalent six-month period a year ago.
“The second quarter’s decline is the third consecutive year-on-year drop in net fee income and a further acceleration in the rate of decline.
Workers at Amazon's new Birmingham warehouse to strike
People work at the Amazon warehouse (REUTERS / Reuters)
Workers at Amazon’s new warehouse in Birmingham have voted to join ongoing strike action over pay and working conditions, the GMB trade union said.
Workers at the warehouse will take strike action on 25 January, GMB said.
Today’s average mortgage interest rates
The average rate on a two-year fixed mortgage has fallen again as lenders compete for customers.
Financial information service Uswitch said the two-year fixed-rate mortgage deal rate had fallen to 5.94% and the five-year fix to 5.49%.
Trending tickers: Apple | Samsung | GSK | Jupiter
The latest investor updates on stocks that are trending on Tuesday. (ASSOCIATED PRESS)
Apple (AAPL) - Apple will release the new Vision Pro headset in the US on Feb. 2, with pre-orders opening on 19 January, in what CEO Tim Cook has described as the dawn of spatial computing.
Samsung (005930.KS) - Samsung posted its sixth consecutive quarter of falling operating profit amid a slowdown in demand for consumer electronics.
GSK (GSK.L) - GSK said it has bought Aiolos Bio for an upfront consideration of $1bn, with the potential for an additional $400m.
Jupiter (JUP.L) - Shares in the UK-based asset manager plunged 17% after the fund house warned it is anticipating worse outflows than previously expected in 2023.
Unemployment in the eurozone has fallen unexpectedly to a joint record low, suggesting Europe’s jobs market remains strong despite the weak growth in the region.
The seasonally-adjusted jobless rate in the Euro Area hit 6.4% in November, with the number of unemployed individuals falling by 99,000 month-on-month to 10.97 million. Meanwhile, the youth unemployment rate, reflecting those under 25 seeking employment, fell to 14.5% from 14.8%.
In the wider European Union, the unemployment rate slipped to 5.9% in November 2023, from 6% in October.
UK Christmas sales disappoint
Retailers suffered a disappointing festive period that failed to make up for a challenging year of sluggish sales growth, figures show.
Weak consumer confidence continued to hold back spending, with total UK retail sales up by just 1.7% in December against growth of 6.9% a year earlier, according to the British Retail Consortium (BRC)-KPMG Retail Sales Monitor.
The post-Christmas sales were unsuccessful in enticing spending in areas such as furniture and homewares, with households remaining cautious about making larger purchases.
Sales saw a slight increase in the week leading up to Christmas as consumers scrambled to purchase last-minute gifts – particularly online – due to the wet weather.
Shares in Hays plummet as recruiter warns of hit to profits
Shares in recruitment group Hays (HAS.L) plunged by almost 13% after it warned that its half-year profits were likely to come in below expectations.
The company is looking for “cost reduction and efficiency programmes” to steer it through a tough macro-economic environment.
Hays said its group consultant numbers were 5% lower during the final three months of 2023 and were down 12% year-on-year, while it also axed non-consultant roles, with a 3% reduction in those teams during the quarter.
The FTSE 250 (^FTMC)company said group fees slumped 15% last month and were 10% lower overall in the quarter.
It now expects first-half underlying operating profits of around £60m.
Investors buying tech dip
Richard Hunter, head of markets at Interactive Investor, said falling Treasury yields tempted investors to buy technology shares on the dip, as each of the main US indices all but recovered their early year losses.
"Indeed, the S&P500 (^GSPC), which added 1.4% in the trading session, now stands just 0.7% from its record closing high. The index saw broad gains with the exception of the energy sector, which fell following weakness in the oil price due to fairly weak demand, price cuts by Saudi Arabia and a rise in output from the OPEC countries.
"Having rallied strongly last year, technology stocks largely shook off a stumbling start to 2024 with gains propelled by notable buying of the 'Magnificent Seven'. Nvidia (NVDA) was a particular highlight, rising by more than 6% after announcing three new AI chips, while Apple (AAPL) recouped some of its losses from last week, adding 2.4%. The likes of Alphabet (GOOG), Amazon (AMZN) and Microsoft (MSFT) also saw renewed buying interest amid the ongoing debate surrounding the timing and levels of interest rate cuts, which are expected to kick in later this year should inflation finally be tamed."
B&M’s Christmas sales grow
Discount retailer B&M (BME.L)has reported a rise in sales over the key festive quarter although it witnessed a slowdown in growth.
It came as the chain said it is on track to have opened 45 stores this financial year, with plans for a similar number of new sites next year.
The B&M European Value Retail group, which also runs the Heron frozen foods chain, revealed that revenues increased by 5% to £1.65bn over the 13 weeks to December 23.
It said this means revenues grew by 8.1%, on a constant currency basis, over the first nine months of the current financial year, after growth eased back.
B&M UK, which has 717 shops, saw sales grow by 3.7% to £1.35bn over the quarter leading up to Christmas.
Watch: Samsung warns on profits as it announces AI push
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