On Thursday, global markets largely held their breath as investors braced for potential signals from Federal Reserve Chair Jerome Powell, who is set to speak at the Jackson Hole symposium. London’s FTSE 100 managed a slight increase, closing at 8,288.00, up by 0.1%. The FTSE 250, however, declined by 0.4%, ending the day at 21,104.70, while the AIM All-Share edged down 0.3% to 774.73.
European markets were subdued as well. The CAC 40 in Paris closed flat, and Frankfurt’s DAX 40 rose by 0.3%.
Across the Atlantic, early optimism on Wall Street dissipated, leading to declines in major indices by the time London markets wrapped up. The Dow Jones Industrial Average fell by 0.3%, the S&P 500 by 0.4%, and the Nasdaq Composite by 0.8%. This followed new data showing that economic activity in the US slowed in August, with the S&P Global US Composite PMI dropping to 54.1 from 54.3 in July.
The latest figures suggest uneven growth across sectors, with services continuing to perform well while manufacturing faces increasing challenges. This raised fresh concerns about the US economy’s trajectory, adding weight to Powell’s upcoming speech, where investors hope to glean hints about the Federal Reserve’s next moves.
Recent minutes from the Federal Reserve’s July meeting revealed that most participants believed an interest rate cut could be on the cards if the economic data continued to align with expectations.
In the UK, data indicated a resilient economy, as the S&P Global UK Composite PMI rose to 53.4 in August, its highest level in four months and surpassing market forecasts. This marks ten consecutive months above the 50.0 threshold, signalling ongoing expansion.
Among individual stocks, JD Sports Fashion was a standout performer on the FTSE 100, surging by 11% after reporting a rebound in sales growth for the second quarter. The retailer’s like-for-like sales rose by 2.4% in the 13 weeks leading up to August 3, recovering from a 0.7% decline in the first quarter. The company also reported an 8.3% increase in organic sales, with strong performances in North America, Europe, and Asia Pacific, though UK sales lagged behind with a 1.2% rise.
JD Sports’ CEO, Regis Schultz, credited the success to the company’s ongoing store expansion strategy, expressing confidence that the retailer remains on track to achieve its full-year profit targets.
Unilever also saw a boost, with its shares rising by 1.2% after Bank of America upgraded its rating to ‘buy’. The bank pointed to potential benefits from Unilever’s plan to spin off its Ice Cream business, which could enhance growth and valuation.
However, not all stocks fared well. Fresnillo and Endeavour Mining both declined, by 2.2% and 1.5% respectively, as gold prices retreated from recent highs.
In the FTSE 250, recruitment firm Hays bounced back from early losses to close up 2.5%. Despite reporting a 47% drop in operating profit due to challenging market conditions, the results met the company’s expectations. CEO Dirk Hahn highlighted the difficulties posed by extended hiring times and low confidence, particularly in key markets like Germany, Australia, and the UK. Still, the company sees significant potential to improve as market conditions stabilise.
On the downside, Ithaca Energy saw its shares fall by 5.5% after it revised down its production forecast for 2024. The company’s first-half production figures dropped significantly due to prolonged shutdowns at key sites, prompting the revision.
Macfarlane Group shares fell by 3.8% after the packaging company reported lower revenue and profit for the first half of the year, citing ongoing market challenges.
Looking ahead, Friday’s economic data includes UK consumer confidence figures and the latest Japanese consumer price index. All eyes will be on Jackson Hole, where key speeches from Jerome Powell and Bank of England Governor Andrew Bailey are expected.
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