Wall Street mixed and FTSE rises as US private sector businesses confidence soars

Well that’s all from us today, thanks for following along. Be sure to join us again tomorrow for the last markets live blog of the week. As usual we will be taking a deep dive into what’s moving markets and all that’s happening across the global economy.

Until then… have a good evening!

Read more: Trending tickers: Tesla, Boeing, IBM, Peloton and Unilever

And sticking with news from across the pond…

Sales of new homes in America rose last month, exceeding analyst expectations to reach the highest rate in more than a year.

Sales stood at an annual rate of 738,000, seasonally adjusted, 4.1% up from the revised August figure of 709,000, the US Commerce Department said.

The rate was higher than a consensus of analysts expected thanks to cooler mortgage rates.

The September sales rate was also 6.3% above the figure from September 2023.

US private sector firms were the most optimistic in two years, according to the S&P Global Flash US Composite PMI on Thursday.

Optimism has rebounded sharply this month, hitting a 29-month high, just a month after sinking to a 23-month low.

It comes as money markets predict a 60% chance of victory for Donald Trump in the upcoming presidential election, compared to 39% for Kamala Harris.

The survey showed selling prices increased at the slowest pace in four years, helping the reading of output to rise to 54.3. A reading above 50 indicates growth.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said:

The pound (GBPUSD=X) pushed higher against the dollar on Thursday, rising more than 0.4% to $1.2982, as the governor of the Bank of England appeared to signal a more cautious approach to cutting interest rates.

Speaking in Washington DC, Bailey remarked that “disinflation is happening faster than we expected, but there are still genuine question marks about whether there have been structural changes in the economy.” His comments suggest the central bank may remain cautious about the pace of monetary easing.

Bailey also pointed out that services inflation, at 4.9% year-on-year in September, remains above the Bank’s target, while the labour market is “probably loosening but still tight.” These factors indicate that policymakers may hesitate to move too aggressively on rate cuts.

In response, the odds of a November rate cut have slightly dipped, to 86% according to the latest City pricing, down from 89%.

A record number of millionaires are expected to leave the United Kingdom as the prospect of tax raises under chancellor Rachel Reeves dampens the appeal of what was once considered a prime destination for the rich.

Up to 9,500 individuals with liquid, investable assets of at least $1m could depart the UK in 2024, more than doubling the exodus seen in 2023, according to migration advisers Henley & Partners. This represents a new record outflow for the UK, with London especially hard hit.

The top destinations for millionaires leaving the UK include the likes of Paris, Dubai, Amsterdam, Monaco, Geneva, Sydney, and Singapore, as well as retirement hotspots such as Florida, the Algarve in Portugal, Malta, and the Italian Riviera.

The UK’s high tax rates and concerns about additional tax hikes that could be announced at the end of the month in the Labour party’s first budget in 14 years, are highlighted as being among the main reasons for the wealth exodus.

“It’s clear that next year’s increase in tax for non-domiciled individuals, announced by the previous Conservative government in March, prompted people to start considering leaving, and this had a domino effect on UK nationals when they realised that capital gains and inheritance tax were the last ones remaining that could possibly be changed and make a difference to the budget shortfall,” Stuart Wakeling, head of Henley & Partners’ UK office, said.

UK consumer confidence has fallen, PwC said on Thursday, driven by a decline in optimism amongst older people and poorer households.

In its consumer sentiment survey, the accountancy firm revealed the index dipped to -8, its lowest point this year and the biggest quarterly drop since Spring 2022 – when Russia’s invasion of Ukraine hit confidence.

Optimism fell particularly sharply in the last quarter among the over-65s, who are now the least optimistic age group for the first time since 2016, and among those in the lowest socioeconomic group.

However sentiment increased among younger people, with 18-24 year olds, and 25-34 year olds the only age groups to have seen an improvement in sentiment since July.

PwC said :

As the 5 November US presidential election approaches, Donald Trump has edged ahead of vice president Kamala Harris in some polls. This surge has caught the attention of crypto investors, who believe a Trump victory could lead to a rally in bitcoin (BTC-USD) and other digital assets.

With two weeks to go until the US election, Trump has extended his lead over Harris in both traditional polling and blockchain-based betting markets such as Polymarket. On Polymarket, Trump currently holds a 60.3% chance of winning, compared to Harris’s 39.6%. However, it’s important to note that Polymarket users tend to be more crypto-friendly and may favour Trump.

Traditional polls indicate a tighter race, especially in key swing states such as Michigan and Pennsylvania.

While both candidates are viewed as broadly favourable toward crypto, Trump has taken a more clear and active stance. This year, he attended the Bitcoin 2024 conference and publicly endorsed crypto project World Liberty Financial.

Harris has offered little clarity on her approach to crypto regulation, leaving uncertainty about her position on the industry.

Read the full article here

Oil prices rose on Thursday as the conflict in the Middle East continues. Brent Crude (BZ=F) advanced more than 1% while West Texas Intermediate was up 1.3%

It came as US Secretary of State Antony Blinken held talks with Saudi Crown Prince Mohammed bin Salman in Riyadh in a bid to reach a ceasefire in Gaza and Lebanon.

Israel has vowed to strike back against Tehran for a missile attack earlier this month.

Vandana Hari, founder of Vanda Insights in Singapore, said:

Electric carmaker Tesla (TSLA) soared nearly 12% in pre-market trading on Thursday morning, after the company posted third quarter earnings that beat estimates.

Tesla reported adjusted earnings per share of $0.72 (55p) for the quarter, compared to expectations of $0.60, on adjusted net income of $2.5bn and free cash flow of $2.9bn.

The company’s closely watched gross margin figure came in at 19.8%, much higher than the 16.8% expected.

Third-quarter revenue came in at $25.18bn, which was slightly lower than the $25.4bn anticipated as per Bloomberg consensus.In its earnings deck, the company said: “Preparations remain underway for our offering of new vehicles — including more affordable models — which we will begin launching in the first half of 2025.”

Tesla CEO Elon Musk later added in an earnings call that Tesla’s volume growth could be between 20% and 30% next year.

Well it’s a busy day for corporate news on the London market. Here’s a quick look at what’s been happening in equity markets so far.

• Consumer goods giant Unilever (ULVR.L) rallied as it reported a jump in third-quarter underlying sales, underpinned by its power brands. Underlying sales grew 4.5%, coming in ahead of analysts’ expectations for 4.2% growth, with volume growth up 3.6%.

• Barclays (BARC.L) also gained as it nudged up its net interest income guidance for the full year and said it is on track to deliver against its short and medium-term targets. The bank said it expects 2024 net interest income excluding investment bank and head office activities from around £11bn to be “greater than £11bn”.

• Anglo American (AAL.L) was in the black after a third-quarter production report, while Quilter was boosted by an initiation at ‘buy’ at Jefferies.

• Bloomsbury Publishing (BMY.L), Indivior (INDV.L) and Softcat (SCT.L) also advanced after results.

• On the downside, BAE Systems (BA.L) fell as it traded without entitlement to the dividend.

• Travis Perkins (TPK.L) was under the cosh as it cut its FY24 adjusted operating profit guidance to around £135m from £150m previously.

• Dunelm (DNLM.L) lost ground even as the homeware retailer posted a 3.5% jump in third-quarter sales, driven by volume.

• Abrdn (ABDN.L) also fell after saying it was hit by £3.1bn of outflows in the third quarter.

The International Monetary Fund (IMF) has said that the world economy could contract by the size of the combined French and German economies, if there is a broad-based trade war between the world’s major economies.

She also told the BBC that the UK needs more investment, to catch up with G7 rivals.

It comes as concerns are heightened ahead of the possible re-election of Donald Trump.

Trump has recently sahe plans to introduce a universal tax or tariff of up to 20% on all imports into the US, while the European Union is already planning retaliation if Washington goes ahead with the new levy.

Intel (INTC) won a major legal battle on Thursday when the European Union’s top court ruled that EU antitrust regulators could not reinstate a €1.06bn (£883m/$1.14bn) fine against the company, marking the end of a nearly two-decade-long case.

The European Court of Justice (ECJ) upheld a lower court’s ruling, rejecting an appeal by the European Commission, which had fined Intel in 2009 for allegedly engaging in anticompetitive practices in the market for computer chips.

“The Court of Justice dismisses the Commission’s appeal, thereby upholding the judgment of the General Court,” the ECJ said in its ruling.

The case dates back to accusations that US chipmaker Intel had offered rebates to major computer manufacturers — Dell (DELL), Hewlett-Packard (HPQ), NEC (6701.T), and Lenovo (0992.HK) — on the condition that they primarily purchased Intel’s x86 central processing units (CPUs). Regulators argued that these rebates were intended to block competition from rival Advanced Micro Devices (AMD), a violation of EU antitrust rules.

UK private sector growth fell to its lowest in almost a year, according to S&P Global, the weakest pace since last November.

The flash UK PMI Composite Output Index, which measures activity across the private sector, was down to 51.7 this month, down from September’s 52.6.

Growth across both manufacturing and services weakened, the data revealed.

Companies said that clients were delaying decision-making, due to heightened economic uncertainty in October, ahead of chancellor Rachel Reeves’s first budget, and with conflict in Ukraine and the Middle East continuing.

There were also concerns among clients about near-term domestic economic growth prospects.

Business confidence weakened to the lowest since November last year, leading firms to cut headcounts for the first time this year.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said:

Barclays (BARC.L) posted a forecast-beating rise in profits in the third quarter, with income from its investment bank leading growth.

The bank reported a 23% increase in attributable profits, which is owed to shareholders, to nearly £1.6bn. This beat consensus forecasts of nearly £1.3bn, according to figures provided by the bank.

Meanwhile, profits before tax rose 18% year-on-year in the third quarter to £2.2bn ($2.8bn), also coming in ahead of estimates of £1.97bn.

The company reported a 14% decline in credit impairment charges to £374m, compared to the same period last year.

Barclays said it had delivered a further £300m in cost savings in the quarter, resulting in year-to-date savings of £700m, putting it on track to deliver around £1bn in efficiencies for the year. Barclays announced a structural overhaul of its business back in February, with the aim of cutting costs by £2bn.

C S Venkatakrishnan, group CEO of Barclays, said: “We continue to be focused on disciplined execution of our three year plan and are encouraged with progress to date. Whilst there is more work to do, the Group is on track to achieve its target of greater than 12% RoTE in 2026.”

Barclays shares climbed more than 4% on Thursday morning, with the stock trading at around nine-year highs.

Striking Boeing (BA) workers have rejected a fresh offer of a 35% pay rise over four years.

According to the International Association of Machinists and Aerospace Workers (IAM) union, 64% of its members voted against the deal.

It comes as more than 30,000 employees are on a strike, which started on 13 September.

The governor of the Bank of England (BoE) has said that UK inflation is cooling more rapidly than expected.

Speaking at an event organised by the Institute of International Finance on Wednesday in Washington DC, Andrew Bailey said:

Policymakers have gathered to discuss the state of the global economy. It comes as UK inflation hit a three-and-a-half year low of 1.7% in September, falling below the Bank’s 2% target.

Money markets now predict a 89% chance of a rate cut from 5% to 4.75% in November.

Stocks in Asia mostly retreated overnight after a third straight day of losses on Wall Street as its record-breaking rally continued to lose steam.

The Nikkei (^N225) rose 0.1% on the day in Tokyo as purchasing manager indexes showed worsening conditions in Japan for both manufacturing and services. The overall composite PMI compiled by au Jibun Bank fell to a two-year low.

Meanwhile the Hang Seng (^HSI) fell 1.3% in Hong Kong. The Shanghai Composite (000001.SS) was 0.7% down by the end of the session.

Across the pond on Wall Street, all three main indexes finished lower yesterday. The Dow Jones Industrial Average (^DJI) fell 1% to 42,514.95, the S&P 500 (^GSPC) fell 0.9% to 5,797.42 and the Nasdaq Composite (^IXIC) fell 1.6% to 18,276.65.

In the bond market, the yield of 10-year US Treasury notes rose to 4.243% from 4.231 late on Tuesday.