Wall Street flat but FTSE ticks up as investors await inflation data
Wall Street’s main indexes were muted this afternoon as investors stayed on the fence ahead of key inflation data this week, while tech stocks shrugged off a G7 agreement on a new global corporate tax minimum.
The Dow Jones Industrial Average and S&P 500 dipped 0.46 and 0.26 per cent respectively by early evening trading.
Meanwhile, the tech-heavy Nasdaq ticked up 0.19 per cent.
Over the weekend G7 finance ministers agreed to a 15 per cent minimum global corporate tax rate in a move aimed at targeting tax avoidance by major tech firms.
But Apple, Amazon, Facebook and Google-owner Alphabet were all trading flat or marginally lower — in line with the market’s wider movement.
“What we’re going to see here is a range-bound market as anxiety over inflation data later in the week is probably going to cap stocks,” said Peter Cardillo, chief market economist at Spartan Capital Securities.
London markets
London’s FTSE 100 clawed back gains this afternoon as a jump in housing stocks lifted the index.
The blue-chip index closed up 0.12 per cent after opening lower, as data showed domestic house price growth hit a near seven-year high last month.
Mining stocks fell by one per cent as data showed China’s export growth slowed last month due to Covid-related disruptions at the country’s ports.
After breaking above the 7,000 mark in mid-April, the FTSE 100 is on course to post its fifth straight month of gains as the easing of lockdowns sparks economic optimism.
Meanwhile, the mid-cap FTSE 250 also rose by 0.33 per cent to hover just below record highs.
“There’s been plenty for investors to mull over today,” said Danni Hewson at AJ Bell.
“In London markets made a strong start to the week despite concerns that social distancing measures will continue beyond the 21st June. Housebuilders provided the scaffolding for gains on both the FTSE 100 and 250 after data showed the housing boom shows no sign of popping just yet.
“Indeed, prolonged restrictions will only add to people’s desires to invest in their own four walls and to make what’s inside them as roomy as possible. Supply issues might continue to be a concern as will those rising prices particularly as attention turns once again to the speed of inflation when new figures are released in the US later this week.”
Market movers
The afternoon’s biggest winner was BT, which rose 3.7 per cent, followed by housebuilder Persimmon, up by 2.7 per cent.
Admiral Group and Barratt Developments also rose two per cent and 1.7 per cent respectively.
British Airways owner IAG and Easyjet both made late gains amid speculation that travel between the UK and the US could be reinstated — outweighing the impact of Portugal’s move to the amber list.
Miner Anglo American was the afternoon’s biggest faller, dropping by 3.12 per cent, followed by Polymetal’s two per cent hit.
Meanwhile, Aveva and Fresnillo both dipped by 1.14 per cent and 1.45 per cent respectively.
Around the world
Asian shares turned sluggish today as relief over last week’s modest US jobs report was chilled by caution ahead of key inflation data.
Data out of Beijing showed China’s imports grew at their fastest pace in ten years, leading to Chinese blue chips falling 0.5 per cent.
MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.1 per cent and risked a fourth straight session off losses, while Japan’s Nikkei gained 0.3 per cent.
While last week’s US jobs data missed forecasts it was still a relief after April’s weak report.
“The data was perfect for a goldilocks type outlook for risk: not too hot to bring in fears of a faster Fed taper, and not too cold to worry about the outlook for the recovery,” said NatWest Markets strategist John Briggs.
“This caused a weaker USD, better stocks, reinforced the earlier bid in commodities, and boosted emerging markets.”