US, FTSE 100 and European markets rise as investors digest inflation data

In the US, Wall Street pushed higher on Wednesday after key inflation data showed a smaller-than expected rise in prices for March.

The Dow Jones (^DJI) rose 0.10% to 33,718.31 points, while the S&P 500 (^GSPC) climbed 0.57% to 4,132.50 points. The tech-heavy NASDAQ (^IXIC) also gained – by 0.82% to 12,130.15.

FTSE 100 and European markets

Across the pond, European markets and the FTSE 100 edged mostly higher as investors also turned their attention to the latest inflation data.

The FTSE 100 (^FTSE) rose 0.38% to close at 7,814, while the CAC 40 (^FCHI) in Paris finished flat at 7,387 – and in Germany, the DAX (^GDAXI) gained 0.20% to 15,686.

Stocks at the top

The top FTSE 100 risers were Frasers Group (FRAS.L), up 1.66%; Unite Group (UTG.L), up 1.24%; Weir Group (WEIR.L), up 1.21% – and Burberry (BRBY.L), up 1.21%.

In contrast, Anglo American (AAL.L) and Ocado Group (OCDO.L) were at the bottom of the basket with their shares down 1.16% and 1.15% respectively.

Asia financial markets

In Asia, Tokyo’s Nikkei 225 (^N225) rose 0.68% to 28,113 points, while the Hang Seng (^HSI) in Hong Kong fell 0.58% to 20,366. In mainland China, the Shanghai Composite (000001.SS) gained 0.24% to 3,321.67 points.

Economic data

In the US, new data showed that inflation cooled in March as the Federal Reserve’s interest rate increases showed more impact, the Labor Department reported on Wednesday.

The Consumer Price Index (CPI), a measure of the costs for goods and services, rose 0.1% for the month.The general expectation was that the CPI would have increased by 0.2% in March, as compared to a gain of 0.4% in February.

Excluding food and energy, core CPI increased 0.4%, meeting the median estimate of 0.4%.

Meanwhile, Deutsche Bank Research said in a note to clients on Wednesday that the prospect of another Fed hike was given some support by various Federal Open Market Committee speakers yesterday.

“Early in the session, New York Fed President Williams said that the Fed’s median forecast for a further rate hike was a “reasonable starting place”. And later in the session, Philadelphia Fed president Harker said that he wanted to “get rates above 5 and then sit there for a while”, which would imply at least one more 25bp move.

However, Chicago Fed president Goolsbee struck a notably more dovish tone relative to some recent speakers, saying that the Fed should “be careful about raising rates too aggressively until we see how much work the headwinds are doing for us in getting down inflation.”

Read more: Trending tickers – De La Rue | SSE | Ocado | Centrica

Bank earnings

It’s also a big earnings week for banks, including JPMorgan (JPM), Wells Fargo (WFC), and Citi (C) – with all three due to report their first-quarter results on Friday.

The three banks were part of a consortium last month that injected some $30bn in deposits into First Republic to shore up the struggling lender.

Tina Teng, market analyst at CMC Markets, said: “Higher interest income is expected for the banks specialising in lending, such as JPMorgan Chase and Wells Fargo. However, the outlook may stay gloomy due to the bank crisis in early March. The risks will be upon reduction in deposits, increase in loan loss provisions, and decline in the capital markets.”

Read more: Bank stocks to watch ahead of earnings reports

Oil prices

Meanwhile, US crude oil, or West Texas Intermediate (CL=F), gained 0.12% to $81.63 a barrel, while Brent crude (BZ=F) also went up – by 0.15% to $85.74 a barrel.

British pound

In currency news, the British pound fell slightly against the US dollar (GBPUSD=X) – down 0.01% to 1.24, meaning £1 will get you $1.24. Against the Euro, the British pound (GBPEUR=X) also fell – by 0.04% to 1.13.

De La Rue shares

Meanwhile, De La Rue (DLAR) shares plunged on Wednesday by over 30%, bringing its one-year loss to around 68% and its 5-year share price decline to more than 92%.

It comes after the company issued a profit warning with full-year earnings for fiscal 2023 expected to fall short of market estimates.

Victoria Scholar, head of investment at Interactive Investor, said: “2023 adjusted operating profit is now seen coming in at a mid-single digit percentage and for fiscal 2024 De La Rue forecasts a figure in the low £20m range.

“The British currency and passport maker has been suffering from weak demand for banknotes which is languishing at a 20-year low. Activist investor Crystal Amber Funds recently said the group’s turnaround plan announced three years ago is failing ‘by every measure’ and the company is ‘failing to control’ various fees paid out. The activist has also been trying to remove Kev Loosemore as Chairman but he survived a vote in December.”

Scholar also highlighted how, in recent years, De La Rue has struggled with the major loss of its British passport contract after Brexit, increased costs, supply chain woes, and a structural decline in demand for physical cash amid the rise of contactless payments and digital banking.

LVMH results

Investors will also be monitoring Luxury goods company LVMH (MC.PA). Europe’s most valuable company, which is home to brands such as Tiffany & Co, Christian Dior, Fendi, Givenchy, Marc Jacobs, Stella McCartney, Sephora and Bulgari, is due to report its first-quarter sales after markets close.

Rightmove UK home sales

In other news, Rightmove (RMV.L) said the number of agreed home sales in March was just 1% below pre-pandemic levels from March 2019 but is down 18% year-on-year. A pickup in buyer demand resulted in a 10% increase in agreed sales from 2019 versus an 11% drop at the start of the year.

Victoria Scholar commented: “The market has been recovering since the turmoil around the mini-budget last year which sent mortgage rates temporarily sharply higher. Reduced asking prices have helped to generate a pickup in sales, with particular strength in the British capital thanks to strong demand from workers and overseas buyers for London apartments.

“With the housing market likely to cool further this year, and the Bank of England nearing the peak of the rate hiking cycle, we could see more buyers return to the market, as the recent headwinds which have stymied transactional activity subside.”

Watch: Tips to tackle grocery and gas prices amid inflation

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Matt Earle

Matthew Earle is the Founder of MiningFeeds. In 2005, Matt founded to provide data and information to the mining investment community. This site was merged with Highgrade Review to form MiningFeeds. Matt has a B.Sc. degree with a minor in geology from the University of Toronto.

By Matt Earle

Matthew Earle is the Founder of MiningFeeds. In 2005, Matt founded to provide data and information to the mining investment community. This site was merged with Highgrade Review to form MiningFeeds. Matt has a B.Sc. degree with a minor in geology from the University of Toronto.

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