FTSE 100 down and US indices mixed as tech stocks lead Nasdaq rally
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European and US stocks were mixed on Friday, as traders digest the latest retail sales data from the Office for National Statistics (ONS). Markets were also looking to key earnings reports, including that of Netflix (NFLX), which beat analysts' expectations.
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The FTSE 100 (^FTSE) fell 0.4% by the closing bell, while Germany's DAX (^GDAXI) was up 0.4% and the CAC 40 (^FCHI) in Paris was 0.4% higher.
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The pan-European STOXX 600 (^STOXX) rose 0.2%.
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The tech-heavy Nasdaq (^IXIC) rose 0.7%, while the Dow (^DJI) was 0.3% lower and the S&P 500 (^GSPC) ticked up 0.2%.
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The ONS said UK retail sales volumes are estimated to have risen by 0.3% in September 2024 — ahead of forecasts. It follows a rise of 1% in August 2024. During the year to September 2024, sales volumes rose by 3.9%, the largest annual rise since February 2022.
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"What September’s retail sales tells us is that, while there is somewhat of a recovery since the bounceback in consumer sentiment directly after the general election, this improvement remains fragile and unbalanced, with uneven performance from one sector of retail to another. Better weather and discounting has helped invigorate sales in some categories, while there is still nervousness around larger household purchases," said Lisa Hooker, leader of industry for consumer markets at PwC UK.
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Head over to our US site for more market moving news. Enjoy the weekend!
CVS stock sinks
Healthcare giant CVS is among the companies making the most dramatic moves in US trading hours today, after a leadership shakeup in which it replaced CEO Karen Lynch with David Joyner.
Meanwhile it issued its outlook for third-quarter earnings, which came in far below analyst estimates.
The stock was more than 7.5% lower by mid-morning.
How stocks are faring at the open in the US
Netflix stock jumps in premarket
Our US team writes:
Netflix (NFLX) stock rose as much as 6% in early trading on Friday after the streaming giant beat third quarter EPS and revenue estimates, and projected sales for the current quarter that came in ahead of Wall Street's expectations.
Revenue beat Bloomberg consensus estimates of $9.78bn to hit $9.83bn in Q3, Netflix reported after the market close on Thursday, an increase of 15% compared to the same period last year.
The growth came as the streamer continued to lean on revenue initiatives like its crackdown on password sharing and ad-supported tier, in addition to last year's price hikes on certain subscription plans.
... and here's the gold chart
Gold surges to new record
Gold prices surged to a record high in early European trading on Friday, driven by safe haven demand as the US presidential election approaches. Additionally, an interest rate cut by the European Central Bank (ECB) provided further support to the precious metal.
At the time of writing, spot gold was trading at $2,705.31 per ounce, reflecting an increase of 0.4%. Meanwhile, US gold futures rose 0.5% to $2,720.
The rise in gold prices comes despite strong US retail sales and labour market data, which have fuelled expectations that US interest rates will decrease at a slower pace in the coming months.
The bullion market has broken out of a tight trading range observed over the past two weeks, hitting new highs as the election draws nearer. Recent polls indicate a closely contested race between vice president Kamala Harris and former president Donald Trump, with less than three weeks left until voters head to the polls.
AmEx at all-time highs ahead of earnings
Pedro Goncalves writes:
American Express shares rose 1.8% to an all-time high of $290.91 in pre-market trading as investors anticipate the company’s upcoming third-quarter earnings report scheduled for this Friday.
Wall Street forecasts earnings per share of $3.80 and revenues of $16.67bn. Over the past year, the stock has surged by 84.29%, with a year-to-date increase of 51.1%.
Driving this year’s rally is American Express’s focus on a more affluent clientele, but the upcoming earnings report will be a critical test of whether this momentum can be sustained. Analysts have expressed some reservations about the company’s revenue growth prospects.
Read more on our Trending tickers story
UK tipped for inheritance tax increase
Reports this morning suggest the upcoming autumn budget will bring an increase in inheritance tax for UK residents.
The BBC reported the intention, adding the government is considering multiple changes to the tax. It is not known what those changes might be, though.
Currently, inheritance tax raises about ￡7bn a year and comes into force on property, possessions and money above the value of ￡325,000, charged at 40%.
The report comes as Labour attempts to plug a ￡40bn hole in public finances, as spending exceeded tax receipts. Labour has blamed the previous Conservative government for this gap.
How US stocks are faring in premarket
Thursday trade in the US
From our US team:
Tech led US stocks higher on Thursday as TSMC's (TSM) upbeat outlook eased worries about artificial intelligence chip demand, helping lift shares of chip heavyweight Nvidia (NVDA) to an intraday all-time high. Strong retail sales data also reinforced overall strength in the US economy.
The tech-heavy Nasdaq Composite (^IXIC) rose just over the flatline, while the S&P 500 (^GSPC) ticked below it, after briefly touching an intraday record. The Dow Jones Industrial Average (^DJI) gained 0.4% to hover near all-time highs.
Contract chipmaker TSMC posted a 54% jump in quarterly profit to beat Wall Street estimates and raised its forecast for 2024 revenue growth amid surging AI demand. The outlook boost from the main chipmaker for Apple (AAPL) and Nvidia reassured a market spooked by ASML's (ASML) downbeat sales forecast, reviving hopes for an AI boom.
TSMC's US-listed shares climbed about 10%, crossing a $1 trillion market valuation. Its forecast helped spur a rally in chip stocks, including Arm (ARM), Broadcom (AVGO), and Nvidia, which all were up more than 2%.
Good morning!
Hello from London. Lucy Harley-McKeown here, hot on the trail of the business and markets news of the day.
This morning we've already had UK retail sales data. Inflation may have fallen below 2% in the latest reading, but that apparently hasn't fed through to people buying more things just yet (more detail on that later).
In terms of quarterly results, we'll be looking at Volvo's (VOL1.SG) Q3 and American Express (AXP).
Let's get to it.