- FTSE 100 rises 12 points
- UK services PMI survey reveals fairly gloomy sector views
- Wall Street chip stocks jump on Microsoft spending plans
4.13pm: Good start to the week for stocks
Just a few minutes away from the closing bells in Europe, Monday looks like being a great start to the week on the Continent and a solid if unspectacular one for the London benchmark.
The FTSE 100 index is up just over 0.1% and the FTSE 250 not even quite at that level, while across the Channel, the CAC 40 is up 2.2% in Paris and the DAX has added 1.5% in Frankfurt.
Italy's FTSE MIB is up 1.8% and Spain's IBEX has climbed 1.1%.
The pan-continental Euro Stoxx 600 is up 0.8%, with top risers being semiconductor names ASML, Infineon and STMicroelectronics.
Stocks were lifted earlier by a Washington Post report that Donald Trump's team were working on less strict tariff plans, which the President Elect then claimed was untrue, or maybe that not every word was correct at least.
It was a similar story for US markets, where semiconductor stocks were leading the way.
An update from Microsoft's chairman that the company is "on track" to invest $80 billion into AI-enabled data centres was cited as today's catalyst.
3.46pm: "Fake news" says Trump
The dollar has bounced back after Donald Trump refuted the Washington Post report that his new Trump administration may be more selective in its use of tariffs than first thought.
Fake news, said the President-Elect, in what is likely to be the first of many such zigzag daily trips for the market as the orange one makes his return to the White House.
"As our traders say: welcome to the age of Trump 2.0," said ING.
"If we’ve learned anything over the years, it’s that Trump is unpredictable. He loves shaking up markets, but the final outcomes are often less dramatic than his initial announcements. However, officials and companies shouldn’t get too comfortable. We will only know what’s truly happening once it’s done."
While European stocks backed off after Trump's denial, they are back up again.
The FTSE is up 2 points while France and Germany's benchmarks are up over 1%.
3.22pm: Is AIM relevant?
London's junior market saw the number of companies listed fall to their lowest total since 2021 and the number of companies worth more than £1 billion dropping to its lowest for nine years, according to analysis by AJ Bell.
“A mere six stocks were worth more than £1 billion at the end of 2024 compared with 30 at the end of 2021,” says analyst Dan Coatsworth.
From those 30 companies, seven were taken over, three moved to the main market, and the rest have seen their valuations fall back under £1 billion due to bad news or other negative factors.
The last time there were fewer at the end of a calendar year was 2015, when there were only four qualifying names: ASOS, Abcam, New Europe Property Investments and Hutchison China.
Although AIM has contributed over 120 companies that have moved up to the main market (including Entain, Melrose and Unite), is "needs a reboot if it is to stay relevant for another 30 years," says Coatsworth...read more
2.40pm: Wall Street opens higher
US stocks have opened higher, with the Nasdaq out in front as expected.
The tech-powered Nasdaq Composite has climbed 1.35% in early trades, with the S&P 500 rising 0.8% and the Dow Jones 0.2%.
Gains are being driven by the likes of Nvidia, up 3.6%, and Microsoft, up 1.4%.
"After a shaky start, risk is back on at the start of this week," says market analyst Kathleen Brooks at XTB.
"The market is also reverting to its old favourites," she adds, noting Nvidia being one of the top performers.
Tech stocks are also leading the rally after Microsoft said that it would commit $80 billion in capex to build AI data centres this year.
"The recent sell off in tech stocks has also removed some of the froth in the market that built up last year, which may also entice investors who want a slice of the action at a cheaper price," adds Brooks.
Back in Europe, the FTSE 100 has dropped back into the red, while other markets have had some of the froth knocked off.
The DAX is up 0.6% and the CAC 40 up almost 1% still though.
1.34pm: Pound and euro recover losses versus US dollar
As well as stocks rising, the dollar has dropped sharply on the earlier Trump tariff story.
The pound is up 1% to $1.254, wiping out its recent losses, having last week slumped to eight-month lows.
And the euro is up almost 1.2% to $1.0428, having dropped to more than two-year lows last week.
1.21pm: How will the UK economy do in 2025?
This year is likely to see a number of important economic events and "will be anything but uneventful", reckons Deutsche Bank UK economist Sanjay Raja as he highlights the themes that are likely to shape 2025.
"It’s not all doom and gloom. Yes, uncertainty is high - but economic tailwinds are still with us. Government spending should be a boon for the economy," he says.
"Household balance sheets remain healthy. And business investment remains on a tear — despite the weaker activity data seen thus far in H2-24.
"The big fly in the ointment will be how the increase in payroll taxes washes through the economy. This will have important ramifications for inflation and the labour market."
A temporary resurgence in inflation is his base case – particularly as energy prices pushed 10% higher in Q4 and are set to rise further – but he does not expect stagflation to emerge and sees the UK economy remaining "steady" despite turbulent headwinds spilling over from last year.
UK growth this year is predicted to reach 1.3%, up from 0.9%, lifted in large part by continued household spending and a sustained increase in house prices, business investment, government spending, and some inventory building.
12.22pm: Stocks boosted by US tariff report
Global stocks, US stock futures are continuing to rise after the Trump tariff report.
While the FTSE 100 is only up 0.1%, the FTSE 250 has surged to a 0.9% gain, while Germany's DAX is up 1.4% and France's CAC 40 has leapt 2.2%.
Looking across the pond, futures for the Nasdaq 100 are pointing to around a 1% gain, while S&P 500 futures were up 0.7% and Dow Jones futures were indicating a 0.3% increase.
everyone is bullish pic.twitter.com/Fj4ncoaO24
— Dario Perkins (@darioperkins) January 6, 2025
For the Footsie, holding the index back are falls for Rolls-Royce (Citi downgrade), WPP Group (UBS reiterated a 'sell' rating) and Unilever PLC (maybe comments from Barclays).
Two others from the top 20, BAT and Compass are also down more than 1%.
11.50am: Stocks climb on Trump's 'more targeted tariffs'
Stocks in Europe and US futures have jumped in recent minutes, with the FTSE 100 climbing into positive territory and France's CAC 40 leaping to a 1.7% gain.
Reports from the Washington Post revealed that President-elect Donald Trump's team are thinking of more targeted tariffs.
Trump's aides are "exploring tariff plans that would be applied to every country but only cover critical imports", the paper reports, which would be a shift from the plans mooted by the returning president in his election campaign.
On the stump, Trump had called for "universal" tariffs of 10% or 20% on all goods imported into the US, which economists and other Republican politician have warned could rock the global economy and lead to more inflation.
11.11am: Surveys are pessimistic, consumers could rescue economy in 2025
The services sector PMI earlier will keep the Bank of England's monetary policy committee on its toes, says Matt Swannell, chief economic advisor to the EY ITEM Club.
He notes that the fourth quarter was the softest quarter of 2024 for the survey.
"The PMI data can be volatile and has recently shown a tenuous link with official estimates of GDP growth," Swannell says.
"The survey can be impacted by business sentiment and does not necessarily reflect the trend in activity."
He says the EY ITEM Club thinks that the recent soft patch is "a blip, rather than a sustained growth slowdown", with consumer spending having performed well recently and "scope for less consumer caution over 2025, there is room for household spending to play a greater role in supporting growth this year".
The services survey's signs of a loosening labour market and signs of inflationary pressure will keep the MPC on its toes but Swannel says the club expects the MPC to cut the base rate gradually over 2025.
10.38am: UK car sales - EVs in focus
Record numbers of electric vehicles were sold in the UK last year, though it was still less than a fifth of all new cars bought.
While total new car sales rose 2.6% to 1.953 million, according to the Society of Motor Manufacturers and Traders (SMMT), industry data revealed on Monday, though growth was entirely down to purchases for corporate car fleets.
Car purchases by households and other private buyers fell 8.7% to 746,276, less than pandemic-hit 2020.
Only one in 10 private buyer chose an EV in 2024, with slightly more (16%) buying a hybrid electric vehicles and six out of 10 buying a petrol-powered car.
Thanks to purchases for corporate fleets, which enjoy better tax-breaksm, out of the total 1.9 million UK car purchases, 381,970 or 19.6% were battery electric vehicles, compared to 16.5% a year earlier.
10.11am: Someone's happy
In a commercial break from our gloomy survey reports, there's a gleeful update from a retailer.
Aldi says it enjoyed its best Christmas ever, thanks to soaring sales of turkeys and customers splashing out on its Specially Selected seasonal range.
Revenues for the German-owned discounter rose 3.4% to more than £1.6 billion in the four weeks to 24 December.
"We dropped hundreds of prices last year as part of our ongoing mission to make outstanding quality, affordable food accessible to everyone," UK chief executive Giles Hurley said.
9.55am: Low confidence in UK's services sector
The UK services PMI reading of 50.4 was unchanged from the 23-month low recorded in November, with many services sector companies reportedly concerned about cutbacks to business and consumer spending, alongside the impact of rising employers' National Insurance contributions.
Looking below the headline reading, the seasonally adjusted business activity index was up slightly from November, signalling a marginal expansion, with subdued sales pipelines continuing to hold back activity growth.
The survey indicated that new orders were "close to stagnation" across the sector, with the lowest reading since October 2023 but still pointing to a fractional increase in new work, with technology services a pocket of strength.
Tim Moore, economics director at S&P Global Market Intelligence, said the post-Budget slump in business optimism persisted in December.
"Concerns about the impact of rising payroll costs, alongside a general unease about the climate for business investment, were reported as the main factors weighing on prospects for growth in 2025," he said.
"Rising input price inflation added to the gloomy nearterm outlook for service providers, with overall cost pressures reaching an eight-month high in December."
Faced with subdued demand and rising employment costs, many service sector companies slowed hiring, with the steepest pace of job shedding for more than 15 years, excluding the pandemic.
9.40am: UK services PMI lower than expected
The UK services sector remained marginally in expansionary mode at the end of last year, according to the closely followed purchasing managers' index (PMI) survey.
A final reading of 50.4 for the services PMI was given for December, flat from the previous month, but down from the 50.5 'flash' reading mid-month.
S&P Global, which carries out the survey, said employment in the sector declined for the third month in a row, while there were marginal increase in business activity and input cost inflation accelerated to an eight-month high.
9.20am: More UK inflation concerns?
A survey by the British Chambers of Commerce has found that just over half of UK companies (55%) expect prices to go up this quarter, following the changes unveiled in the Autumn Budget.
The BCC admitted that concern about inflation remains broadly similar to the previous quarter – 47% compared to 46% in the third quarter of last year, while worry about interest rates has actually fallen slightly to 28% from 29%.
However, business confidence has slipped to its lowest level since the aftermath of the mini-Budget in Autumn 2022.
Only 49% of firms say they expect their turnover to increase in the next twelve months, down from 56%. while 21% of businesses expect turnover to worsen, up from 15%, and 30% expect no change.
Profitability confidence has also been hit, 40% of firms expect profits to increase over the next year (48% in Q3), while 32% of businesses expect them to fall.
9.01am: FTSE on its own in the red
The FTSE 100 being in the red is a bit of an anomaly in European markets this morning.
While the London index is just below flat, the DAX is up 0.3% in Frankfurt and the CAC 40 has gained 0.45% in Paris, while the Euro Stoxx 600 is up 0.25%.
Even the FTSE 250 is higher, up 0.3%.
What's holding the Footsie back is that more than half of the top 20 largest companies are seeing their shares sold this morning, led by a 4% decline from Rolls-Royce Holdings PLC (LSE:RR.).
The engine maker was knocked lower by a downgrade from Citi, which removed its 'buy' rating but upped its price target.
8.56pm: London 'needs to reinvent itself'
More data and comments to follow up on the IPO stats for last year, with stats showing the pipeline is maybe not as "robust" as EY suggests.
Financial Conduct Authority data shows that just 40 companies made applications to list on the market in 2024, down 30% from 2023 and 70% down on the 125 companies that applied in 2021.
This data is forward-looking as it shows the number of companies applying to the regulator for permission to list.
Joshua Raymond, managing director of XTB in the UK, says: "Given it can take some months between applications going in and shares starting to trade, the data suggests there is unlikely to be any uptick in activity in the listings market, at least in the first half of 2025."
He says the London Stock Exchange "desperately needs to reinvent itself as a vibrant marketplace for capital and ideas" and "what we really need is not just one or two big names, but a steady supply of new exciting companies, and capital, to drive growth".
8.45am: London listings - a new hope?
Although there was a small flurry of floats in the fourth quarter, last year saw the lowest new listings in London for three decades.
Fresh data from the London Stock Exchange shows there were just 17 true initial public offers in 2024, the smallest number since 1995.
Data has also been compiled by EY, which puts the total at 18, and says this is the lowest since it started counting in 2010.
However, the EY research offers more than a glimmer of hope for the Square Mile, as the £3.4 billion raised by these companies was up 256% on the prior year.
And EY also points to a "robust" pipeline for more IPOs and says an "improved domestic policy environment" and the reform of the UK listings rules is expected to drive a rebound in activity in the first half of 2025.
8.15am: FTSE 100 opens lower
The FTSE 100 has opened in the red, as expected, dropping 11 points to just under 8,213.
Biggest fallers include Rolls-Royce Group PLC, down 2.3%, followed by WPP Group PLC and Marks and Spencer Group PLC (LSE:MKS).
Intermediate Capital Group (LSE:ICP) PLC is the top riser, up 2.3%, followed by Experian PLC (LSE:EXPN).
7.59am: Bezos vs Musk in the UK
Amazon.com Inc (NASDAQ:AMZN) has unveiled plans to offer satellite broadband in the UK in competition with Elon Musk’s Starlink.
A regulatory filing over the weekend said the company founded by Jeff Bezos would look to access local radio frequencies over the next one to two years in order to begin rolling out the service in the UK.
Amazon has plans to place 3,000 small satellites in orbit through its Project Kuiper subsidiary, which could eventually see mobile signal offered in remote locations, as Musk's SpaceX does via its Starlink business.
The first of Amazon’s prototype satellites were launched in 2023, with commercial rollout yet to begin despite plans for last year.
7.51am: St Pancras operator to cut charges
The private equity owners of the rail line from London St Pancras to the Channel Tunnel have been told by the regulator to cut their charges for the next five years.
HS1 Ltd, owned by UK-based InfraRed Capital and Equitix Investment Management since 2017, had in November set out its spending plans in for the period starting in April this year.
But the Office of Rail and Road today told the company that it needs to cut its charges by 3.8% or £5 million per year for renewal of sections of rail and repairs and maintenance to stations, which include Stratford International and Ashford International.
7.40am: Feeling valued?
By midday today, the third working day of the year, the average FTSE 100 chief executive's pay will already have exceeded the annual salary of the average UK worker.
Bosses from the 100 largest listed UK companies receive an average of £4.22 million, according to research by the High Pay Centre, up 2.5% on a year ago.
This is 113 times the median full-time worker’s pay of £37,430, which has increased 7%.
7.18am: FTSE 100 set to slip lower
The FTSE 100 is set to carry over last week's dreary mood into Monday morning, ahead of key services sector data later.
Futures have pencilled in a fall of around 12 points for the open for the London blue-chip index, which fell 36 points the previous session to close the week at just under 8,224.
Asian markets are mostly in the red this morning, with Japan's Nikkei and India's Sensex both down more than 1% and the Hang Seng down 0.5%.
Traders will be looking out for the day's key macroeconomic data, services PMI reports, which are due from several major countries, including the UK at 9.30am.