(Alliance News) - Stocks were higher on Thursday morning ahead of GDP and other key US data, and despite a lukewarm-at-best UK consumer confidence reading.
The economic calendar has a slew of US releases due out today, including comments from Federal Reserve Chair Jerome Powell; initial jobless claims; and of course GDP.
"The US economy is expected to have grown by 3% in Q2 – and Atlanta Fed's GDPNow Forecast now suggests that growth may have remained robust near that level in Q3," commented Swissquote's Ipek Ozkardeskaya. "A robust growth data is good for those who bet that the Federal Reserve will achieve the soft-landing that it dreams of.
"But it will also make investors think twice about their expectation for the next Fed meetings. Activity on Fed funds futures currently assesses more than a 60% chance for a second 50bp cut from the Fed in November… and there is nothing – in the economic data – that would justify such move besides greed."
The Federal Reserve's preferred inflation measure, the core personal consumption expenditures price index, will be released on Friday.
In company news, Schroders named its next chief financial officer, and Halma said it expects to report good organic revenue growth and "modestly higher" earnings.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: opened 0.7% higher at 8,322.62
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Hang Seng: up 3.2% at 19,734.35
Nikkei 225: closed up 2.8% at 38,925.63
S&P/ASX 200: closed up 1.0% at 8,203.70
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DJIA: closed down 293.47 points, 0.7% at 41,914.75
S&P 500: closed down 0.2% to 5,722.26
Nasdaq Composite: closed marginally higher at 18,082.20
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EUR: flat at USD1.1154 (USD1.1155)
GBP: lower at USD1.3346 (USD1.3351)
USD: higher at JPY144.77 (JPY144.44)
Gold: up at USD2,661.23 per ounce (USD2,656.90)
(Brent): down at USD71.40 a barrel (USD74.38)
(changes since previous London equities close)
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ECONOMICS
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Thursday's key economic events still to come:
09:00 BST eurozone money supply
14:30 BST eurozone European Central Bank President Christine Lagarde speaks
15:15 BST eurozone European Central Bank Vice-President Luis de Guindos speaks
09:00 BST Italy consumer confidence
08:30 BST Switzerland interest rate decision
13:30 BST US GDP
13:30 BST US initial jobless claims
13:30 BST US durable goods orders
13:30 BST US quarterly personal consumption expenditures
14:20 BST US Federal Reserve Chair Jerome Powell speaks
15:00 BST US pending home sales
15:30 BST US EIA natural gas stocks
16:00 BST US Kansas City Fed manufacturing activity
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China's leadership, including President Xi Jinping, admitted Thursday that the country's economy was facing new "problems", according to state media. "Some new situations and problems have emerged in the current running of the economy," Xinhua reported after a meeting of the Politburo of the ruling Chinese Communist Party. Leaders also stressed the need to improve the "effectiveness" of economic policy, as the country faces headwinds from a crisis in the housing market to local government debt, and vowed to make sweeping changes to the property sector after listening to "concerns" from the public. "We must respond to the people's concerns, adjust housing purchase restriction policies, lower interest rates on existing mortgage loans... and promote the construction of a new model for real estate development," Xinhua said.
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UK consumer confidence declined in September, setting the stage for a possibly "turbulent few months" for retailers. According to the British Retail Consortium's consumer sentiment monitor, expectations for personal finances, saving, personal spending and the state of the economy for the next three months declined. The personal financial situation tracker fell to negative 6 points in September from positive 1 point in August. The personal saving index fell to negative 9 from August's negative 4. The index tracking the assessment on the state of the economy fell "significantly" to minus 21 this month from minus 8 in August. The "personal spending overall" tracker fell marginally to positive 10 points in September from 11 in August, though the "personal spending on retail" index improved slightly to negative 8 from negative 9.
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The UK has joined the US, France and a host of allies in calling for an immediate temporary ceasefire in Lebanon, warning the escalating violence between Israel and Hezbollah is "intolerable". In a joint statement, the 12-strong bloc calls for a 21-day ceasefire "to provide space for diplomacy towards the conclusion of a diplomatic settlement", as well as a ceasefire in Gaza. The statement says: "The situation between Lebanon and Israel since October 8th, 2023 is intolerable and presents an unacceptable risk of a broader regional escalation...It is time to conclude a diplomatic settlement that enables civilians on both sides of the border to return to their homes in safety."
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UK Foreign Minister David Lammy has expressed London's intention to expand cooperation in the defence sector with Germany and the other European partners in view of the threat from Russia. "I think we should be very concerned about the hard power war that is going on, and that means us doing more in terms of Europe's industrial military capability," Lammy told dpa on the sidelines of the UN General Assembly in New York. "When you think about European defence, I think that the partnership between the UK and Germany is central, alongside, of course, our French colleagues and also the Baltic states." He added that "we should be very concerned about the cyberwarfare that's been undertaken at the moment", stressing that disinformation was "undermining our democracies".
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BROKER RATING CHANGES
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RBC raises Experian to 'sector perform' (underperform) - price target 4,200 (2,500) pence
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Goldman cuts BP price target to 580 (600) pence - 'buy'
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UBS raises Trainline price target to 410 (450) pence - 'buy'
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COMPANIES - FTSE 100
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Schroders moves Chief Operating Officer Meagen Burnett to chief financial officer, effective from January 1. She replaces Richard Oldfield, who was promoted to chief executive earlier this month. Schroders also elevated Chief Investment Officer Johanna Kyrklund, who has been with the firm since 2007, to the board also from January 1. Burnett joined as COO in January 2023. Kyrklund was named CIO in 2019.
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Halma, which will release its first-half results on November 21, said its financial 2025 guidance of "good organic constant currency revenue growth", and an adjusted Ebit margin around 21%, is unchanged. Halma expects to report good organic constant currency revenue growth for the first half ending on September 30, with an adjusted Ebit margin "modestly higher" than the prior year's. Order intake in the year so far, it added, is "ahead of both revenue and the comparable period last year". It also maintains "a healthy acquisition pipeline across all three sectors".
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COMPANIES - FTSE 250
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JPMorgan Emerging Markets Investment Trust said its net asset value per share was 122.1 pence at June 30, up from 115.6p one year prior. For the year to June 30, it reported an NAV total return of 7.2%, underperforming against 13.2% from the MSCI Emerging Markets index. It declared a final dividend of 1.30p per share, up from 1.07p, increasing the total to 1.90p from 1.65p. It said the year has been challenging for emerging markets as a whole, with China as the biggest drag on overall asset classes. However, it said that in other countries the outlook is improving ; that interest rates should come down; and that economic growth should accelerate.
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OTHER COMPANIES
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Marlowe PLC spin-off Optima Health PLC has started trading on AIM in London, following its initial public offering. On admission, Optima - Marlowe's former occupational health division - said it will have around 88.8 million ordinary shares in issue. It suggested a price of GBP2.14 per share on Monday, when publishing its admission document, with an anticipated market capitalisation of around GBP190 million. Optima's IPO is led by Panmure Liberum as Nomad and broker.
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By Emma Curzon, Alliance News reporter
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