Stocks in London were higher on Friday, as the market eagerly awaited a critical US inflation print.
The FTSE 100 index was up 27.47 points, or 0.3%, at 8,407.11. The FTSE 250 was up 59.36 points, or 0.3%, at 21,090.44, and the AIM All-Share was virtually unchanged at 772.41.
The Cboe UK 100 was up 0.3% at 840.52, the Cboe UK 250 was up 0.2% at 18,563.70, and the Cboe Small Companies was down 0.1% at 16,897.59.
The latest core PCE index, which is the US Federal Reserve’s preferred gauge of inflation, is due later. It follows US GDP, which came out on Thursday.
According to the Bureau of Economic Analysis, real US GDP increased at an annual rate of 3.0% in the second quarter of 2024, beating the first estimate of 2.8%. In the first quarter, real GDP increased 1.4%.
‘The increase in real GDP primarily reflected increases in consumer spending, private inventory investment, and non-residential fixed investment,’ BEA explained.
Looking ahead to the PCE print, analysts at ING noted that the US Federal Reserve has ‘shifted the focus towards the employment side of its mandate on the back of greater disinflation confidence’. Their view was that both PCE and CPI data ‘will keep building that confidence’.
ING added: ‘That said, the dollar does not appear in a position to trade much lower in the very near term. The market’s conviction on a Fed easing led to its own dovish tilt in communication by many weeks, and the largest chuck of the dollar decline has probably already happened. We have seen this as a consolidation week for FX, and the proximity to Monday‘s Labour Day holiday in the US may favour range-bound trading today despite the PCE risk event.’
In European equities on Friday, the CAC 40 in Paris was up 0.5%, while the DAX 40 in Frankfurt was up 0.1%.
Inflation in the eurozone slowed to a three-year low in August, according to an official flash estimate on Friday.
According to Eurostat, consumer prices in the single currency bloc rose 2.2% annually in August, in line with FXStreet-cited consensus. This was slower than the 2.6% rise in July, and the lowest rate since July 2021.
Services inflation picked up to 4.2% in August from 4.0% in July. Month-on-month, consumer prices rose 0.2% in August from July, having been unchanged in July from June.
Core consumer prices - stripping out energy, food, alcohol & tobacco - rose 2.2% annually in August, cooling from 2.6% in July. This was also in line with market expectations.
Both the core and headline rates remain above the European Central Bank’s 2% target.
Meanwhile, separate figures from Eurostat showed that the unemployment rate in July fell to 6.4% in the eurozone. Market consensus had expected no change from 6.5% in June.
The pound was quoted at $1.3180 at midday on Friday in London, compared to $1.3164 at the equities close on Thursday. The euro stood at $1.1077, against $1.1077. Against the yen, the dollar was trading at JP¥145.10, down compared to JP¥145.23.
In the FTSE 250, Computacenter was up 0.4%.
The firm has named Adam Walker as the newest independent non-executive director on the board, as well as chair of the audit committee, and member of the nomination and remuneration committees, with immediate effect.
On September 30, Walker - who is currently a non-executive director at Currys, will also become senior independent director of the company. He has previously held executive roles at IHS Holding, GKN, and National Express Group.
Elsewhere, Permanent TSB Group gained 2.7%, after announcing on Thursday that CFO Nicola O’Brien is to step down. In accordance with the bank’s existing governance arrangements, O’Brien will step down from the board with immediate effect.
Chief Executive Officer Eamonn Crowley said: ‘Nicola has played an important role in supporting the bank on its journey to grow and diversify its business. I wish to acknowledge the commitment she has shown to the bank throughout her tenure and wish her every success in her future career.’
On AIM, Vela Technologies lost 5.9%.
The early stage-focused technology investor said that for the quarter ended June 30, the value of its total assets decline to £2.8 million from £5.5 million in the previous quarter.
It explained that this decrease was ‘entirely attributable’ to the collapse in value of Conduit Pharmaceuticals Inc, and the subsequent unrealised loss of £2.8 million. Of the rest of the listed portfolio, a profit of £8,000 was realised on investments valued at £78,000 at March 31, and there was an unrealised gain of £137,000 on the remaining £1.7 million of listed investments brought forward. No acquisitions were made during the quarter.
Stocks in New York were called higher. The Dow Jones Industrial Average was called up 0.2%, the S&P 500 index up 0.4%, and the Nasdaq Composite up 0.7%.
Kamala Harris said Americans are ready to turn the page on Donald Trump, as she reached out to centrist voters in her first interview since her nomination as the Democratic Party’s presidential candidate.
Meanwhile, former president Donald Trump asked a federal court late on Thursday to intervene in his New York hush money criminal case, seeking a pathway to overturn his felony conviction and indefinitely delay his sentencing next month.
Lawyers for the current Republican nominee asked the federal court in Manhattan to seize the case from the state court where it was tried, arguing that the historic prosecution violated his constitutional rights and ran afoul of the US Supreme Court’s recent presidential immunity ruling.
Brent oil was quoted at $78.83 a barrel at midday in London on Friday from $78.74 late Thursday.
Gold was quoted at $2,522.70 an ounce against $2,519.68.
Still to come on Friday’s economic calendar, there are several releases from the US, including personal consumption expenditures, Chicago PMI, and the Michigan consumer sentiment index.
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