Stocks in Europe made little headway on Thursday, as all eyes remained on the Jackson Hole symposium, where the market will hear from central bankers including US Federal Reserve Chair Jerome Powell.
The FTSE 100 index closed up 4.57 points, 0.1%, at 8,288.00. The FTSE 250 ended down 82.49 points, 0.4%, at 21,104.70, and the AIM All-Share closed down 2.08 points, 0.3%, at 774.73.
The Cboe UK 100 ended flat at 827.62, the Cboe UK 250 closed up 0.1% at 18,551.16, and the Cboe Small Companies ended up 0.5% at 16,984.99.
In Europe on Thursday, the CAC 40 in Paris ended flat, while the DAX 40 rose 0.3% in Frankfurt.
In New York at the time of the London close on Thursday, the DJIA was down 0.3%, the S&P 500 was down 0.4% and the Nasdaq Composite was down 0.8%.
Early gains on Wall Street evaporated as data showed economic activity slowed in August.
The S&P Global US composite purchasing managers’ index eased to a four-month low of 54.1 points in August, from 54.3 in July.
S&P Global noted that growth has become ‘increasingly uneven’, as the services sector continues to strengthen, while the factory downturn accelerates.
The figures added to concerns that the US economy may be slowing, adding further importance to Federal Reserve Chair Powell’s speech on Friday.
Investors will hoping Powell signals an interest rate cut will occur at the Fed’s next meeting in September.
Minutes from the last Fed meeting in July, released on Wednesday, showed the ‘vast majority’ of participants ‘observed that, if the data continued to come in about as expected, it would likely be appropriate to ease policy at the next meeting.’
Ian Shepherdson at Pantheon Macroeconomics said an easing at the Fed’s meeting on September 18 is a ‘certainty’, with the only question whether the US central bank cuts by 25 basis points or 50.
Shepherdson pointed out futures put the chance of 50bp at about 40%, which looks ‘a bit high to us but is not outrageous’.
In the UK, figures showed economic activity remained robust, pushing the pound close to a two-year high.
The latest S&P Global flash UK composite purchasing managers’ index rose to 53.4 points in August, a four-month high, up from 52.8 points in July. According to FXStreet, markets were expecting the figure to edge up to just 52.9.
The headline index has now posted above the 50.0 no-change threshold for ten consecutive months.
‘August is witnessing a welcome combination of stronger economic growth, improved job creation and lower inflation, according to provisional PMI survey data,’ said Chris Williamson, chief business economist at S&P Global Market Intelligence.
Rob Wood at Pantheon Macroeconomics said the data signals ‘faster growth and slower inflation’, and would be consistent with third quarter growth of 0.3% quarter-to-quarter.
The pound was quoted at $1.3091 at the London equities close Thursday, up from $1.3070 at the close on Wednesday. The euro stood at $1.1110, down against $1.1138. Against the yen, the dollar was trading at JP¥146.08, up compared to JP¥145.35
In the FTSE 100, JD Sports Fashion jumped 11% after reporting a pick-up in sales growth in the second quarter.
The Lancashire, England-based sports-fashion retail company said like-for-like sales rose 2.4% in the 13 weeks to August 3, picking up speed from a fall of 0.7% in the first quarter.
On an organic basis, sales climbed 8.3%, with North America sales up 13.7%, and Europe and Asia Pacific up 10.5%. UK organic sales growth lagged, rising just 1.2%.
Chief Executive Regis Schultz said growth was supported by the continued success of its JD store rollout programme.
‘Based on our first-half trading, we remain on track to deliver profit within our full-year guidance,’ Schultz added.
Peel Hunt said the update was ‘somewhere between reassuring to good, with [like-for-like] improving in all areas and material market share gains.’
Unilever rose 1.2% supported by a double upgrade to ’buy’ from Bank of America.
The broker highlighted hopes for stronger underlying growth and touted the benefits of hiving off its Ice Cream business.
The latter will be ‘beneficial for growth, management focus, and valuation,’ BofA commented.
A drop in the gold price from recent record highs dragged gold and silver miner Fresnillo down by 2.2% with gold miner Endeavour Mining losing 1.5%.
Gold was quoted at $2,478.64 an ounce, against $2,507.72 at the close on Wednesday.
In the FTSE 250, Hays recouped early losses to advance 2.5%.
Reflecting tough trading conditions, operating profit fell 47% to £105.1 from £197.0 million. This was in line with a company compiled consensus.
Net fees fell 14% to £1.11 billion from £1.29 billion, or by 12% on a like-for-like basis. Turnover decreased by 8.3% to £6.95 billion from £7.58 billion, or by 6% LFL.
Chief Executive Dirk Hahn explained: ‘We saw increasingly challenging market conditions through [financial 2024] in both perm and temp, with low confidence levels and longer-than-normal ’time-to-hire’, and our profitability was significantly impacted, including our three largest markets of Germany, Australia and the UK.’
Hays said it sees ‘significant scope’ to increase both fees and operating profit as average placement volumes per consultant returns to more normal levels.
But Ithaca Energy fell 5.5% after cutting production guidance for 2024.
First half production was 53,046 barrels oil equivalent per day, down from 75,755 a year ago. This reflected the shut-in of the Pierce field for a large part of the period, coupled with outages at the Erskine, Captain and Schiehallion fields.
Full-year guidance for 2024 combined group production was cut to 76,000 to 81,000 boed, down from previous guidance of 80,000 to 87,000 boed.
Brent oil was quoted at $77.38 a barrel at the London equities close Thursday, up from $77.29 late Wednesday.
Elsewhere, Macfarlane fell 3.8%.
The packaging firm reported revenue of £129.6 million in the first half of the year, down from £141.6 million a year earlier. Pretax profit falls to £9.7 million from £10.0 million.
The firm said that the ‘challenging market conditions’ experienced in the latter part of 2023 have continued in 2024.
Friday’s economic calendar sees a UK consumer confidence reading and Japanese consumer price index data.
At the Jackson Hole economic symposium Federal Chair Jerome Powell and Bank of England Governor Andrew Bailey are due to speak.
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