Europe higher and US stocks down as data shows inflation ramping up

Lucy Harley-McKeown
Updated
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ftse Chairman of the Federal Reserve Jerome Powell listens during a Senate Banking Committee hearing on
Chairman of the Federal Reserve Jerome Powell. US stocks were mixed on fresh inflation data while the FTSE moved higher. (REUTERS / Reuters)

Stocks in Europe rode out Friday on a positive note, with the FTSE 100 rising as data showed UK shoppers returned to the high street in January. Stocks were lower across the pond on fresh inflation data.

  • By the end of the day, the FTSE 100 (^FTSE) had risen 1.5% led by miners Glencore (GLEN.L), Anglo American (AAL.L) and Antofagasta (ANTO.L).

  • Over in Europe, the DAX (^GDAXI) was 0.3% higher and the CAC (^GDAXI) rose 0.3%.

  • US indices fell on news that US wholesale inflation accelerated in January.

  • The S&P 500 (^GSPC) was slightly lower, the Dow (^DJI) fell 0.1% and the Nasdaq (^IXIC) fell 0.1%, having started the day in the green.

  • The US producer price index rose 0.3% from December to January. It fell 0.1% from November to December. Measured year over year, producer prices rose by a mild 0.9% in January.

  • The moves higher in Europe follow data from the ONS which showed UK retail sales staged a strong recovery in January. It was a particularly strong month for supermarkets, and a fall in gas prices meant stronger sales at the pump.

  • On Thursday, data showed the UK had fallen into a recession — two consecutive quarters of negative growth — in the third quarter. Strong retail sales might suggest the gloomy data on that front will be short-lived.

Follow for live updates throughout the day:

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  • 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

    And here's a chart

  • Lucy Harley-McKeown

    Miners on the up

    Miners are leading the FTSE 100 higher this morning with gains from Glencore (GLEN.L), Anglo American (AAL.L) and Antofagasta (ANTO.L).

    Susannah Streeter from Hargreaves Lansdown has some commentary on this:

    ‘’Copper prices have lifted away from three-month lows after the dollar dipped back. This was prompted by more sluggish retail sales figures indicating interest rate cuts could be closer on the horizon.

    A weaker dollar increases the purchasing power of large consumers of imported commodities likes copper, and that is expected to push up demand, benefitting mining companies with large copper production operations. However, the downbeat outlook for China is limiting gains.’’

  • Lucy Harley-McKeown

    Full take on NatWest

    Here's Yahoo Finance UK's full take on NatWest: NatWest shares jump on biggest profit since 2007

  • Lucy Harley-McKeown

    Natwest beats on profit as it confirms a new CEO

    Natwest (NWG.L) saw its pre-tax profits soar last year, off the back of high interest rates. It also confirmed caretaker CEO Paul Thwaite for the top job.

    Shares were around 2.6% higher by mid-morning as the lender said bumper profits came due to an increased yield from loans and mortgages compared with payouts. The Bank of England has held interest rates at 5.25% as it tries to stabilise the economy. Natwest's net interest income was up 12% to £11bn.

    More on that later...

  • Lucy Harley-McKeown

    In UK politics...

    If you've been keeping an eye on British politics you might have known there were two by-elections yesterday. Results, which came in overnight, spelt bad news for PM Rishi Sunak as both Wellingborough and Kingswood swung to Labour.

    Both by-elections had turnouts of less than 40%.

    Politico's morning newsletter Playbook had an interesting take on Reform UK's polling: "Its 13 percent in Wellingborough and 10.4 percent in Kingswood mark the first time the start-up party’s national poll rating has been made flesh, in a truly ominous sign for the Tories’ electoral prospects."

  • Lucy Harley-McKeown

    US stocks

    Shrugging off the aforementioned retail sales data, there was also a sunny mood among the major US indexes. The S&P 500 (^GSPC) finished Thursday 0.6% higher, the Dow (^DJI) was up 0.9% and the Nasdaq (^IXIC) rose 0.3%.

    Here's our US team's take:

    Stocks have put an early-week rout in the rearview mirror, recouping all of the steep losses booked on Tuesday after a hot inflation print dented hopes for interest rate cuts. Comments from Federal Reserve policymakers playing down the data helped soothe nerves.

    But investors are still wondering whether the rout was a one-off, with some seasonal weakness playing a part, or the start of a bigger pullback. Many Wall Street strategists have pointed out that there were signs of resilience even as stocks tumbled.

  • Lucy Harley-McKeown

    Overnight in Asia

    Asian stocks clocked strong gains overnight on Friday, with Hong Kong's Hang Seng (^HSI) up 2.5% by the close, the SSE Composite (000001.SS) rising 1.3% and Japan's Nikkei (^N225) ending the week 0.9% higher.

    The moves higher came after the retail sales data released in the US revealed shoppers leaving the high street in January. The measure fell by the most in 10 months somewhat alleviating stress caused by the hotter-than-expected inflation report earlier in the week.

  • Lucy Harley-McKeown

    Good morning!

    Hello from London, it's been a big week of news for markets — with the UK slipping into a recession and inflation staying put, and dampened hopes of a rate cut any time soon. I've got a coffee in hand, so let's get to it.

Watch: PM suffers double blow as Labour wins Kingswood and Wellingborough by-elections

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