European stock markets pushed higher on Thursday as investors awaited details of the latest inflation figures from the US.
In London, the FTSE 100 (^FTSE) climbed 0.5% higher after opening, as rising metal prices boosted miners, while the CAC (^FCHI) also gained 0.5% in Paris, and the Frankfurt DAX (^GDAXI) surged 0.6%.
The STOXX 600 (^STOXX) was likewise up 0.6%. Industrial metal miners gained the most among the various sectors, with a rise of a much as 1.8%. It came as prices of base metals like copper and nickel rose on a softer dollar, and Chinese government support for the yuan.
The headline inflation rate in the US for November inched down to 3.1% on an annual basis from 3.2%. But core inflation rose – it was up 0.3% during the month, while the year-on-year core rate remained flat at 4%.
Traders will have their eyes on the update this afternoon, which will influence how soon the Federal Reserve can start cutting borrowing costs.
Last night, the S&P 500 (^GSPC) closed 0.6% higher, coming within touching distance of last year’s high, while the tech-heavy Nasdaq (^IXIC) was 0.8% up, its fourth positive day in a row. Meanwhile, the Dow Jones (^DJI) gained 0.5% in New York.
Read more: Bank of England may cut interest rate sooner after surprise inflation forecast
“Today’s December inflation numbers have the potential to either add to the expectation of a move in March, or push it out until later in the year, with expectations of a tick higher to 3.3%, even as lower gasoline prices exert a loosening of financial conditions to the US consumer,” Michael Hewson of CMC Markets said.
“Yesterday, New York Fed President John Williams, who was one of the first Fed officials to pour cold water on the post Powell market reaction, reiterated his view that while policy was tight enough to ensure inflation fell back towards 2%, further cooling would be needed to justify a change of policy stance.
“On core inflation the argument for a cut is harder to make given in November it was double the target rate at 4% and is only expected to slow modestly to 3.8%.”
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M&S staff to receive bumper payout after strong Christmas sales
Liverpool One M&S entrance (Ed Rooney) And sticking with supermarkets, Marks and Spencer’s (MKS.L) has also issued a trading update today. Here’s what they posted this morning…
Marks & Spencer has also revealed solid like-for-like sales growth, up 8.1% across the UK in the last 13 weeks of the year.
Like-for-like sales lifted 9.9% across its food arm, while comparable store sales were 4.8% higher in its clothing and home division in the quarter to December 30. Third quarter UK sales hit £3.57bn, up 8.1% like-for-like.
Stuart Machin, chief executive of M&S, said: “We enter 2024 with a spring in our step, but clear eyed on the near-term challenges.”
The group added a note of caution over the outlook: “As we enter the new year and 2024-25, expectations for economic growth remain uncertain, with consumer and geopolitical risks.
“We also face additional cost increases from higher than anticipated wage and business rates related cost inflation.
“Nevertheless, the strong Christmas trading performance provides confidence that the results for the year will be consistent with market expectations.”
Meanwhile, more than 9,200 staff, most customer service workers, are set to benefit from bumper payouts in February under the company’s share save scheme thanks to its performance on the stock market driven by impressive trading.
An employee saving a typical £150 a month into the scheme will gain more than £10,000, according to the group.
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Tesco raises profit outlook after record Christmas
Shopper walking through the aisle of a Tesco supermarket. (Yui Mok, PA Images) Tesco (TSCO.L) has said it is on track for bigger-than-expected profits this year after record sales over Christmas.
Bosses at the supermarket giant said its growth was boosted by investment to keep prices low, as it has sought to stop shoppers switching to fast-growing German discount rivals Aldi and Lidl.
The retailer said it has cut “nearly 2,700 prices” as part of this strategy to attract customers who have faced a surge in the cost of living.
On Tuesday, Tesco said like-for-like retail sales across the group rose by 6pc over the six weeks to January 2024, compared with the same period a year earlier.
In the UK, sales across it stores grew by 6.8pc over the Christmas period, with the company hailing a sharp rise in demand for its Finest premium range of food and drink products.
It came as the company also reported that like-for-like retail sales grew by 6.6pc over the previous 13 weeks, the quarter to November 25, as it was boosted by strong growth in its UK and Ireland shops.
Tesco said it now expects a retail-adjusted operating profit of £2.75bn for the year, up from a previous range of between £2.6bn and £2.7bn.
Chief executive Ken Murphy said:
As part of our focus on value, we offered a full Christmas dinner for just £2.09 per person, helping to drive record sales in the weeks leading up to Christmas and further market share gains.
We put a strong focus on quality and innovation too, with over 550 new and improved festive products. Over 18 million customers took the opportunity to treat themselves by shopping from our Finest range, which saw sales growth of nearly 17%.
Over the period we cut nearly 2,700 prices, with a further 150 prices cut just this week, cementing our position as the UK’s cheapest full-line grocer.
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