Wall Street and FTSE lower as US inflation falls
A deep dive into what's moving markets across the global economy
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In the US, the S&P 500 (^GSPC) was down 1.6% after the open, while the Nasdaq Composite (^IXIC) fell 1.3% after US inflation figures showed that consumer price increases hit their lowest annual rate since early 2021.
The FTSE (^FTSE) closed slightly lower, following news that UK economic growth flatlined in July for the second consecutive month. Data from the Office for National Statistics (ONS) showed there was no month-on-month growth in gross domestic product (GDP), which defied forecasts.
There were expectations of 0.3% month-on-month growth, according to a research note from Deutsche Bank released on Monday.
London's benchmark index (^FTSE) closed 0.1% lower.
Germany's DAX (DAX) was down 0.1% and the CAC (^FCHI) in Paris was down 0.1%.
The pan-European STOXX 600 (^STOXX) was up .01%.
Brent crude (BZ=F) rose slightly above $70 (£53) per barrel.
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Blog close and recap
That's all for today, folks. Thanks so much for following along!
Here's a recap of some of today's main headlines:
UK economy flatlines for a second month in a row.
Inflation: Consumer prices rise at slowest pace since early 2021.
The latest inflation report keeps the Fed on track for a quarter-point rate cut. Wall Street isn't satisfied.
Apple picks the low-hanging fruit in iPhone unveil.
Going for gold
AJ Bell's investment director Russ Mould has shed more light on AngloGold Ashanti’s (AU) £1.9bn takeover bid for gold miner Centamin (CEY.L).
Mould says:
“Over the summer, global equity markets have been volatile, government bond markets have been firming (as yields have fallen) and currency markets have been all over the place, but gold has remained firm, near record highs, at around $2,500 an ounce.
This is not escaping the attention of gold mining executives, who seem keen to position their firms for further potential upside in the precious metal and do so by acquiring rival producers rather than developing new mines.
“London-listed Shanta Gold received a bid earlier this year, and that transaction followed a lengthy list of larger deals worldwide, notably Barrick Gold (GOLD) swallowing up Randgold Resources and Newmont (NEM) buying GoldCorp in 2019; the merger between Agnico Eagle (AEM) and Kirkland Lake Gold in 2021; Agnico Eagle and Pan American Silver (PAAS) carving up Yamana Gold and Newmont buying Newcrest in 2023; and South Africa’s Gold Fields move on Canada’s Osisko Mining (OSK.TO) in August of this year, just before AngloGold Ashanti joined in with its £1.9bn cash-and-stock approach for Centamin.
“Intriguingly, the valuations implied by both the Osisko and Centamin deals suggest that the remaining gold producers on the London Exchange could yet be nuggets of value (as could some of the gold diggers on the New York and Toronto markets)."
Trump Media shares slump
Trump Media (DJT) shares plummeted by as much as 15% during early trading on Wednesday. It follows former president Donald Trump's debate with vice president Kamala Harris yesterday.
Trump reacted defensively during the debate, criticising Harris's record in several policy areas.
Although we don't have the full picture yet, at least one poll suggested Harris won the debate, however, and investors may be nervy about Trump's performance.
US consumer price increases hit lowest annual rate since early 2021
The long-awaited US inflation figures are out — and they show that consumer price increases ticked lower on an annual basis during August. The data was released by the Bureau of Labor Statistics.
The CPI increased 2.5% over the prior year in August, a deceleration compared to July's 2.9% annual gain in prices and the lowest annual rate since early 2021. The yearly increase was also in line with economist expectations.
You can read the full story here.
Trouble ahead for Premium Bond investors?
The NS&I has cut the rate on two-year, three-year and five-year British Savings Bonds in a move that could impact millions of people.
The two-year growth bond has been cut from 4.6% to 4.25%, the three-year option is down from 4.35% to 4%, and the five-year bond is down from 4.1% to 3.9%.
In response to the news, Mark Hicks, head of Active Savings at Hargreaves Lansdown, said:
“It was always a matter of when these cuts were going to come, rather than if. However, the fact NS&I is cutting rates today demonstrates that it’s not desperately keen to fill its boots, so it isn’t going to be comfortable with paying over the odds. This doesn’t bode well for Premium Bond savers.
These fixed rate cuts mirror the falls that we’ve seen in the rest of the saving market. While rates have headed downhill, the NS&I has shifted gear in order to stay in the middle of the road. Last year, NS&I distorted the market with a market-leading 1 year rate, but these moves imply that NS&I isn’t in any rush to do the same again. It’s not desperate to raise significant funds by paying more than it needs to.
For anyone holding Premium Bonds this isn’t going to be a great sign. There’s every chance NS&I could cut its variable rates sooner rather than later, which could mean the Premium Bond prize rate gets less generous.
Anyone considering an NS&I fixed rate bond at these new rates needs to seriously consider whether it’s the right home for their money." Hicks added that online banks and savings platforms offer much better deals.
Meanwhile, if you're a Premium Bond holder, you can find out here what your true chances of winning are.
Market movers at midday
Here are some of the market movers just after noon:
WHSmith (SMWH.L) was up almost 13% after the retailer’s revenues were boosted by strong sales at transport hubs across the UK.
Gold miner Centamin (CEY.L) gained again today. Its 2.2% boost was a tad more modest than yesterday’s surge of more than 20%, which came after news of a takeover by AngloGold Ashanti (AU).
Walmart (WMT) rose 32.3% to continue its run as one of the best-performing stocks in the S&P 500 this year.
Meanwhile, GSK (GSK) shares are down 0.8% on the news that the drugmaker is abandoning its experimental herpes vaccine. It comes after the failure of an early-stage trial. It’s not all bad for GSK, though, as its shares are still up by about 12% so far this year.
Rentokil (RTO) shares have plummeted 18% after a worse-than-expected performance in North America over the summer sparked a profit warning.
US outlook
US analysts' attention is split between the fallout from Tuesday's combative Trump-Harris presidential debate and the much-anticipated US CPI inflation data report for August, which is due out later today.
The August CPI is expected to rise 0.2%, bringing the year-over-year rate of inflation down to 2.5% from 2.9% in July, according to economists.
The figures come ahead of the equally anticipated Federal Reserve meeting next week.
Rightmove snubs £5.6bn takeover bid
Matt Cardy via Getty Images A move by Rupert Murdoch-backed company REA to acquire property site Rightmove (RMV.L) has been swiftly rebuffed.
A Rightmove spokesperson said: “The board carefully considered the proposal, together with its financial advisers, and concluded that it was wholly opportunistic and fundamentally undervalued Rightmove and its future prospects. “Accordingly, the board unanimously rejected the proposal on September 10 2024."
REA is controlled by Murdoch’s News Corp (NWSA).
FTSE inches 0.1% higher
European stocks rose slightly today, while Wall Street futures slipped. The FTSE (^FTSE) inched 0.1% higher upon opening, with mining stocks leading the charge.
Nasdaq 100 futures (NQ=F) slipped 0.2% ahead of the New York open.
Meanwhile, fears over the impact of Hurricane Francine have caused some European gas prices to fluctuate.
GDP figures disappoint
The UK's GDP figures are out and have once again proved disappointing.
UK economic growth flatlined in July for the second consecutive month. Data from the Office for National Statistics (ONS) showing gross domestic product (GDP) did not see any month-on-month growth. It had also previously flatlined in June.
Good morning!
Hello from London and welcome back to our markets live blog. It's Tola Onanuga here bringing you updates throughout the day.
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