Global stock markets at record high ahead of crunch US inflation report – business live

From 1h ago

Introduction: All eyes on US inflation report

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Hopes that America’s economy will achieve a ‘soft landing’ will be tested today by the latest US inflation data.

Investors across the globe are poised for April’s US CPI report, hoping to see signs that inflationary pressures are easing. But there’s also anxiety that price pressures are sticky, making it harder for the US Federal Reserve to lower interest rates soon.

Economists predict the annual US inflation rate will dip to 3.4% for April, after jumping unexpectedly to 3.5% in March.

On a monthly basis, prices are expected to have risen by 0.3%, a slowdown on March’s 0.4%.

Yesterday, Fed chair Jerome Powell pointed out that inflation has been falling more slowly than expected, despite US interest rates being raised to their highest in over two decades.

Powell told a conference in Amsterdam:

“We did not expect this to be a smooth road. But these [inflation readings] were higher than I think anybody expected.

“What that has told us is that we’ll need to be patient and let restrictive policy do its work.”

Investors are keenly awaiting the inflation data to gain a clearer understanding of when and to what extent the Fed might adjust interest rates, explains Fawad Razaqzada, market analyst at City Index and FOREX.com.

Razaqzada adds:

Persistent inflation in the first quarter, coupled with hawkish sentiments expressed by Fed officials advocating for prolonged high interest rates, have bolstered the US dollar.

However, recent developments such as weaker-than-anticipated US non-farm payrolls and an increase in jobless claims have fuelled speculation that the Fed might initiate interest rate cuts as early as September.

Core inflation, a key measure of underlying price trends, is forecast to slow to 3.6% per year, down from 3.8%.

Yesterday, we learned that US producers raised the prices by 0.5% in April, a faster increase than expected – but Wall Street shrugged that off, seemingly hopeful that today’s Consumer Price Inflation report will show prices easing.

The dollar has dropped to a one-month low against the euro this morning, ahead of the CPI data.

The agenda

  • 10am BST: Second estimate of eurozone GDP in Q1 2024

  • 10am BST: European Commission to release its spring economic forecasts

  • 1.30pm BST: US inflation report for April

  • 1.30pm BST: US retail sales report for April

  • 3pm BST: UK Treasury Committee questions former Federal Reserve chair Ben Bernanke about the Bank of England’s forecasting

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Updated at 07.42 BST

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It’s done it again!

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The UK’s blue-chip share index has climbed to a new record high in early trading.

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The FTSE 100 index jumped around 0.5% to a new intraday high of 8474 points, as investors hope that US inflation will fall today.

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Experian, the credit data firm, are the top riser – up over 8% after it reported growth at “the top end of our expectations” for the last financial year.

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In the City, profits at Burberry have dropped by 40% as the luxury goods market continues to struggle.

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Burberry’s profits fell to £383m in the 12 months to the end of March, down from £634m a year earlier.

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Revenues fell 4%, while profit margins also shrank.

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Burberry reports that men’s and women’s ready-to-wear clothes sales were below average, but outerwear – such as its Heritage raincoats – were strong, while there was a double-digit increase in sales of scarves.

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Jonathan Akeroyd, Burberry’s CEO, says that “executing our plan against a backdrop of slowing luxury demand has been challenging”, adding:

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\n

While our FY24 financial results underperformed our original expectations, we have made good progress refocusing our brand image, evolving our product and strengthening distribution while delivering operational improvements.

\n

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Back in January, Burberry issued a profit warning after weak Christmas trading.

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And looking ahead today, Burberry cautions that the first half of the current financial year is expected to “remain challenging”.

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It reports that sales in the Americas fell 12% last year. Sales in mainland China fell by 19% in the last quarter, but were up 2% over the year.

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Sarah Riding, retail &amp; supply chain partner at law firm Gowling WLG, says the retail market in general is “under the kosh at the moment”, adding:

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“While Burberry’s results highlight a significant global reduction in sales and the subsequent fragility of the luxury market at present, there are still plenty of opportunities for those that have the supply chain ingenuity and ability to deliver against specific customer requirements in this space.

\n

“Burberry has a proven track where this dynamic is concerned, given its aptitude in splitting its offering to suit key demographics that span demand for more obvious Burberry-led branding applies, while providing more subtle focused designs within its other lines – for example Thomas Burberry – thus, helping meet the need for quality and less obvious brand association at the same time

\n

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Global stock markets have climbed to a new record high today, ahead of the US inflation data due at 1.30pm UK time.

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The MSCI All Country World Index, which tracks equities around the globe, nudged up to a new peak this morning, having closed at a record high last night.

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That suggests optimism that today’s inflation report will show that underlying US inflation moderated last month.

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chart showing the MSCI All Country World Index,","caption":"A chart showing the MSCI All Country World Index,","credit":"Photograph: LSEG"}},{"_type":"model.dotcomrendering.pageElements.TextBlockElement","html":"

Last night, the US tech-focused Nasdaq index closed at a record high; it’s gained around 10% so far this year.

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There was also another flurry of meme stock excitement yesterday, with Gamestop surging 60%.

","elementId":"07160659-5c02-4df4-afc8-1f8eebb74585"},{"_type":"model.dotcomrendering.pageElements.RichLinkBlockElement","prefix":"Related: ","text":"GameStop and AMC shares surge amid volatile market frenzy","elementId":"f815d7c5-9d2c-4594-bc35-31903f7cac28","role":"thumbnail","url":"https://www.theguardian.com/business/article/2024/may/14/gamestop-amc-shares-roaring-kitty"},{"_type":"model.dotcomrendering.pageElements.TextBlockElement","html":"

The UK’s stock market has helped with this rally – with the FTSE 100 hitting a series of record highs in recent weeks. The Footsie is up 9% since the start of January.

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Global equities rose to a record high ahead of a US inflation report that may offer clues on the Federal Reserve’s interest rate path. https://t.co/OihMYYytDF

&mdash; Bloomberg Asia (@BloombergAsia) May 15, 2024

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Jim Reid of Deutsche Bank reports that the markets turned more upbeat yesterday, telling clients:

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The S&amp;P 500 (+0.48%) closing within two tenths of a percent of its all-time high on March 28. Tech stocks outperformed, with the Magnificent 7 (+1.01%) reaching a new all-time high, led by Tesla (+3.29%) and Nvidia (+1.06%). But the equity rally was broad-based, with the small-cap Russell 2000 up +1.14%.

\n

","elementId":"b36fb6fd-1193-4f6e-8c63-b73777ff2959"}],"attributes":{"pinned":false,"keyEvent":true,"summary":false},"blockCreatedOn":1715754413000,"blockCreatedOnDisplay":"07.26 BST","blockLastUpdated":1715754471000,"blockLastUpdatedDisplay":"07.27 BST","blockFirstPublished":1715754472000,"blockFirstPublishedDisplay":"07.27 BST","blockFirstPublishedDisplayNoTimezone":"07.27","title":"World equities climb to record ahead of US inflation report","contributors":[],"primaryDateLine":"Wed 15 May 2024 08.40 BST","secondaryDateLine":"First published on Wed 15 May 2024 07.26 BST"},{"id":"664444518f0818dde2142bc3","elements":[{"_type":"model.dotcomrendering.pageElements.TextBlockElement","html":"

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

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Hopes that America’s economy will achieve a ‘soft landing’ will be tested today by the latest US inflation data.

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Investors across the globe are poised for April’s US CPI report, hoping to see signs that inflationary pressures are easing. But there’s also anxiety that price pressures are sticky, making it harder for the US Federal Reserve to lower interest rates soon.

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Economists predict the annual US inflation rate will dip to 3.4% for April, after jumping unexpectedly to 3.5% in March.

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On a monthly basis, prices are expected to have risen by 0.3%, a slowdown on March’s 0.4%.

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Yesterday, Fed chair Jerome Powell pointed out that inflation has been falling more slowly than expected, despite US interest rates being raised to their highest in over two decades.

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Powell told a conference in Amsterdam:

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“We did not expect this to be a smooth road. But these [inflation readings] were higher than I think anybody expected.

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“What that has told us is that we’ll need to be patient and let restrictive policy do its work.”

\n

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Investors are keenly awaiting the inflation data to gain a clearer understanding of when and to what extent the Fed might adjust interest rates, explains Fawad Razaqzada, market analyst at City Index and FOREX.com.

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Razaqzada adds:

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Persistent inflation in the first quarter, coupled with hawkish sentiments expressed by Fed officials advocating for prolonged high interest rates, have bolstered the US dollar.

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However, recent developments such as weaker-than-anticipated US non-farm payrolls and an increase in jobless claims have fuelled speculation that the Fed might initiate interest rate cuts as early as September.

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Core inflation, a key measure of underlying price trends, is forecast to slow to 3.6% per year, down from 3.8%.

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Yesterday, we learned that US producers raised the prices by 0.5% in April, a faster increase than expected – but Wall Street shrugged that off, seemingly hopeful that today’s Consumer Price Inflation report will show prices easing.

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The dollar has dropped to a one-month low against the euro this morning, ahead of the CPI data.

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The agenda

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    \n

  • 10am BST: Second estimate of eurozone GDP in Q1 2024

  • \n

  • 10am BST: European Commission to release its spring economic forecasts

  • \n

  • 1.30pm BST: US inflation report for April

  • \n

  • 1.30pm BST: US retail sales report for April

  • \n

  • 3pm BST: UK Treasury Committee questions former Federal Reserve chair Ben Bernanke about the Bank of England’s forecasting

  • \n

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Key events

Filters BETA

Here’s Victoria Scholar, head of investment at interactive investor, on today’s rallying stock markets:

European markets are trading higher – the FTSE 100 is leading the gains up over 0.5% hitting a fresh record high lifted by Experian which has surged 8% thanks to a strong annual revenue forecast.

Meanwhile weak full-year results from Burberry have dragged the luxury stock to the bottom of the blue-chip index. Anglo American [yesterday] announced plans to demerge its 85% stake in De Beers after it rejected a sweetened takeover offer from rival BHP, saying the £34 billion bid was ‘highly unattractive’ for shareholders. Both stocks are trading higher.

Global equities are on a tear – the MSCI All Country World Index closed at a record high last night and the US tech-heavy Nasdaq also hit a record closing high last night.

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Wall Street's main indexes all advanced and the Nasdaq scored a record closing high as Fed Chair Jerome Powell reassured investors while they digested producer prices data and waited for Wednesday's crucial consumer inflation report.
Read more: https://t.co/EL4AVn9MgI pic.twitter.com/UuKyLg9H6F

&mdash; Reuters Business (@ReutersBiz) May 15, 2024

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Wall Street’s main indexes all advanced and the Nasdaq scored a record closing high as Fed Chair Jerome Powell reassured investors while they digested producer prices data and waited for Wednesday’s crucial consumer inflation report.
Read more: https://t.co/EL4AVn9MgI pic.twitter.com/UuKyLg9H6F

— Reuters Business (@ReutersBiz) May 15, 2024

The pan-European Stoxx 600 index has also hit a record high in early trading.

Germany’s Merck are up 4%, after posting better-than-expected adjusted earnings, helped by strong demand for its pharmaceuticals, and sales growth in its semiconductor materials.

FTSE 100 hits fresh record high

It’s done it again!

The UK’s blue-chip share index has climbed to a new record high in early trading.

The FTSE 100 index jumped around 0.5% to a new intraday high of 8474 points, as investors hope that US inflation will fall today.

Experian, the credit data firm, are the top riser – up over 8% after it reported growth at “the top end of our expectations” for the last financial year.

Profits slide at Burberry as luxury demand slows

In the City, profits at Burberry have dropped by 40% as the luxury goods market continues to struggle.

Burberry’s profits fell to £383m in the 12 months to the end of March, down from £634m a year earlier.

Revenues fell 4%, while profit margins also shrank.

Burberry reports that men’s and women’s ready-to-wear clothes sales were below average, but outerwear – such as its Heritage raincoats – were strong, while there was a double-digit increase in sales of scarves.

Jonathan Akeroyd, Burberry’s CEO, says that “executing our plan against a backdrop of slowing luxury demand has been challenging”, adding:

While our FY24 financial results underperformed our original expectations, we have made good progress refocusing our brand image, evolving our product and strengthening distribution while delivering operational improvements.

Back in January, Burberry issued a profit warning after weak Christmas trading.

And looking ahead today, Burberry cautions that the first half of the current financial year is expected to “remain challenging”.

It reports that sales in the Americas fell 12% last year. Sales in mainland China fell by 19% in the last quarter, but were up 2% over the year.

Sarah Riding, retail & supply chain partner at law firm GowlingWLG, says the retail market in general is “under the kosh at the moment”, adding:

“While Burberry’s results highlight a significant global reduction in sales and the subsequent fragility of the luxury market at present, there are still plenty of opportunities for those that have the supply chain ingenuity and ability to deliver against specific customer requirements in this space.

“Burberry has a proven track where this dynamic is concerned, given its aptitude in splitting its offering to suit key demographics that span demand for more obvious Burberry-led branding applies, while providing more subtle focused designs within its other lines – for example Thomas Burberry – thus, helping meet the need for quality and less obvious brand association at the same time

World equities climb to record ahead of US inflation report

Global stock markets have climbed to a new record high today, ahead of the US inflation data due at 1.30pm UK time.

The MSCI All Country World Index, which tracks equities around the globe, nudged up to a new peak this morning, having closed at a record high last night.

That suggests optimism that today’s inflation report will show that underlying US inflation moderated last month.

A chart showing the MSCI All Country World Index, Photograph: LSEG

Last night, the US tech-focused Nasdaq index closed at a record high; it’s gained around 10% so far this year.

There was also another flurry of meme stock excitement yesterday, with Gamestop surging 60%.

The UK’s stock market has helped with this rally – with the FTSE 100 hitting a series of record highs in recent weeks. The Footsie is up 9% since the start of January.

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Global equities rose to a record high ahead of a US inflation report that may offer clues on the Federal Reserve’s interest rate path. https://t.co/OihMYYytDF

&mdash; Bloomberg Asia (@BloombergAsia) May 15, 2024

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Global equities rose to a record high ahead of a US inflation report that may offer clues on the Federal Reserve’s interest rate path. https://t.co/OihMYYytDF

— Bloomberg Asia (@BloombergAsia) May 15, 2024

Jim Reid of Deutsche Bank reports that the markets turned more upbeat yesterday, telling clients:

The S&P 500 (+0.48%) closing within two tenths of a percent of its all-time high on March 28. Tech stocks outperformed, with the Magnificent 7 (+1.01%) reaching a new all-time high, led by Tesla (+3.29%) and Nvidia (+1.06%). But the equity rally was broad-based, with the small-cap Russell 2000 up +1.14%.

Introduction: All eyes on US inflation report

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Hopes that America’s economy will achieve a ‘soft landing’ will be tested today by the latest US inflation data.

Investors across the globe are poised for April’s US CPI report, hoping to see signs that inflationary pressures are easing. But there’s also anxiety that price pressures are sticky, making it harder for the US Federal Reserve to lower interest rates soon.

Economists predict the annual US inflation rate will dip to 3.4% for April, after jumping unexpectedly to 3.5% in March.

On a monthly basis, prices are expected to have risen by 0.3%, a slowdown on March’s 0.4%.

Yesterday, Fed chair Jerome Powell pointed out that inflation has been falling more slowly than expected, despite US interest rates being raised to their highest in over two decades.

Powell told a conference in Amsterdam:

“We did not expect this to be a smooth road. But these [inflation readings] were higher than I think anybody expected.

“What that has told us is that we’ll need to be patient and let restrictive policy do its work.”

Investors are keenly awaiting the inflation data to gain a clearer understanding of when and to what extent the Fed might adjust interest rates, explains Fawad Razaqzada, market analyst at City Index and FOREX.com.

Razaqzada adds:

Persistent inflation in the first quarter, coupled with hawkish sentiments expressed by Fed officials advocating for prolonged high interest rates, have bolstered the US dollar.

However, recent developments such as weaker-than-anticipated US non-farm payrolls and an increase in jobless claims have fuelled speculation that the Fed might initiate interest rate cuts as early as September.

Core inflation, a key measure of underlying price trends, is forecast to slow to 3.6% per year, down from 3.8%.

Yesterday, we learned that US producers raised the prices by 0.5% in April, a faster increase than expected – but Wall Street shrugged that off, seemingly hopeful that today’s Consumer Price Inflation report will show prices easing.

The dollar has dropped to a one-month low against the euro this morning, ahead of the CPI data.

The agenda

  • 10am BST: Second estimate of eurozone GDP in Q1 2024

  • 10am BST: European Commission to release its spring economic forecasts

  • 1.30pm BST: US inflation report for April

  • 1.30pm BST: US retail sales report for April

  • 3pm BST: UK Treasury Committee questions former Federal Reserve chair Ben Bernanke about the Bank of England’s forecasting

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Updated at 07.42 BST

The Guardian

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