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World stocks volatile as Wall Street boom fades - business live World stocks volatile as Wall Street boom fades - as it happened
(35 minutes later)
Today was yet another rollercoaster day for global markets, in what has been a volatile month as 2018 draws to a close.
After a huge rally on Wall Street on Boxing Day, when the Dow surged more than 1,000 points or nearly 5%, most European markets opened higher this morning.
But the boost proved short-lived, and the sell-off in Europe gathered pace as the day went on.
In the UK, the FTSE 100 is down 104 points or 1.6% at 6,581.78 - the lowest since July 2016, a month after the Brexit vote. Meanwhile Germany’s DAX and Italy’s FTSE MIB are both down more than 2%.
Over in the US, lower-than-expected jobless claims last week failed to prop up markets after the big gains on Wednesday. The Dow is currently down 293 points or 1.3%, at 22,585.
That’s all for today. Thanks for all the comments and please join us again tomorrow.
US markets are down after the opening bell, as yesterday’s rally runs out of steam:US markets are down after the opening bell, as yesterday’s rally runs out of steam:
Dow Jones: -1.4%Dow Jones: -1.4%
S&P 500: -1.3%S&P 500: -1.3%
Nasdaq: -1.5%Nasdaq: -1.5%
There were 216,000 initial jobless claims in the week ending 22 December according to the US Labor Department.There were 216,000 initial jobless claims in the week ending 22 December according to the US Labor Department.
It was a fall from the 217,000 claims filed a week earlier (revised up from a first estimate of 214,000), and lower than the 217,000 claims predicted by economists.It was a fall from the 217,000 claims filed a week earlier (revised up from a first estimate of 214,000), and lower than the 217,000 claims predicted by economists.
U.S. jobless claims fall to 216,000, hovering near an almost five-decade low that reflects a robust labor market https://t.co/OtSaePLhyoU.S. jobless claims fall to 216,000, hovering near an almost five-decade low that reflects a robust labor market https://t.co/OtSaePLhyo
The UK travel industry is another sector facing considerable pressure in 2019, according to David Madden, analyst at CMC Markets:The UK travel industry is another sector facing considerable pressure in 2019, according to David Madden, analyst at CMC Markets:
The travel sector had a difficult 2018, and given the concerns about global growth, a slight decline in consumer appetites and uncertainty surrounding Brexit, the industry is likely to have a downbeat start to 2019.The travel sector had a difficult 2018, and given the concerns about global growth, a slight decline in consumer appetites and uncertainty surrounding Brexit, the industry is likely to have a downbeat start to 2019.
On the plus side, the oil price has dropped considerably, but that might be irrelevant if firms have locked in their exposure already.On the plus side, the oil price has dropped considerably, but that might be irrelevant if firms have locked in their exposure already.
The drop in the oil market is also a reflection about worries of a slowing economy. The Brexit clock is ticking, and UK consumers are likely to be cautious in the first few months of next year.The drop in the oil market is also a reflection about worries of a slowing economy. The Brexit clock is ticking, and UK consumers are likely to be cautious in the first few months of next year.
Figures out so far suggest many retailers have had a tough Christmas this year, as Brexit-cautious consumers cut back on spending.Figures out so far suggest many retailers have had a tough Christmas this year, as Brexit-cautious consumers cut back on spending.
The struggle to win customers will intensify in 2019, according to a report by KPMG and Ipsos Retail Think Tank.The struggle to win customers will intensify in 2019, according to a report by KPMG and Ipsos Retail Think Tank.
The authors note:The authors note:
It is too easy to point the finger at Brexit as the singular cause of all the woes in the industry. There is in fact a much wider array of forces at play currently. These forces have been gathering momentum for a number of years and are by no means new.It is too easy to point the finger at Brexit as the singular cause of all the woes in the industry. There is in fact a much wider array of forces at play currently. These forces have been gathering momentum for a number of years and are by no means new.
Changing consumer behaviour, the over-supply of physical stores, high levels of legacy debt, regulatory and compliance costs, macro-economic and geopolitical challenges, and a lack of talent at the top of retail businesses to help deliver much-needed change, were all highlighted as forces that would impact negatively on the industry in 2019 – regardless of the outcome of Brexit.Changing consumer behaviour, the over-supply of physical stores, high levels of legacy debt, regulatory and compliance costs, macro-economic and geopolitical challenges, and a lack of talent at the top of retail businesses to help deliver much-needed change, were all highlighted as forces that would impact negatively on the industry in 2019 – regardless of the outcome of Brexit.
Boxing Day sales draw fewer UK shoppersBoxing Day sales draw fewer UK shoppers
European markets are a sea of red as afternoon trading gets underway... the early boost from Wall Street’s Boxing Day surge has well and truly worn off.European markets are a sea of red as afternoon trading gets underway... the early boost from Wall Street’s Boxing Day surge has well and truly worn off.
Here are the latest scores:Here are the latest scores:
FTSE 100: -1.1% at 6,611FTSE 100: -1.1% at 6,611
Germany’s DAX: -2% at 10,421Germany’s DAX: -2% at 10,421
France’s CAC: -0.4% at 4,610France’s CAC: -0.4% at 4,610
Italy’s FTSE MIB: -1.6% at 18,112Italy’s FTSE MIB: -1.6% at 18,112
Spain’s IBEX: -0.9% at 8,402Spain’s IBEX: -0.9% at 8,402
Europe’s STOXX: -1.1% at 331Europe’s STOXX: -1.1% at 331
The outlook for oil prices is bleak, according to analysts at Cantor Fitzgerald Europe.The outlook for oil prices is bleak, according to analysts at Cantor Fitzgerald Europe.
Ashley Kelty and Jack Allardyce write:Ashley Kelty and Jack Allardyce write:
Crude prices took a battering on Monday as the ‘Santa rout’ continued to hit the markets. With investors spooked by fears over weakening demand and the near term supply glut, prices fell sharply in thin volumes.Crude prices took a battering on Monday as the ‘Santa rout’ continued to hit the markets. With investors spooked by fears over weakening demand and the near term supply glut, prices fell sharply in thin volumes.
The sharp drop even after the impending imposition of new quotas by OPEC+ continues to worry the cartel, with the UAE Energy Minister Suhail al-Mazroueei reportedly claiming that OPEC+ will hold an extraordinary meeting to discuss increasing the cuts and/or extending the period of the new quotas (beyond the four months currently in place).The sharp drop even after the impending imposition of new quotas by OPEC+ continues to worry the cartel, with the UAE Energy Minister Suhail al-Mazroueei reportedly claiming that OPEC+ will hold an extraordinary meeting to discuss increasing the cuts and/or extending the period of the new quotas (beyond the four months currently in place).
The latest attack by President Trump on the leadership of the Federal Reserve led to sharp falls across the board, as investors worry about the potential for a recession in 2019. This latest Twitter outburst (does Trump do anything else?) led to the president of Rosneft to directly blame Trump for the fall in oil prices, and warned that oil prices may remain in the $50-$53 range in 2019.The latest attack by President Trump on the leadership of the Federal Reserve led to sharp falls across the board, as investors worry about the potential for a recession in 2019. This latest Twitter outburst (does Trump do anything else?) led to the president of Rosneft to directly blame Trump for the fall in oil prices, and warned that oil prices may remain in the $50-$53 range in 2019.
Fundamentals in the oil market look bleak, with slowing economic growth and weaker than expected demand pushing the market firmly into bear territory.Fundamentals in the oil market look bleak, with slowing economic growth and weaker than expected demand pushing the market firmly into bear territory.
Lower oil prices are weighing on the FTSE, with Brent crude down 1.7% at $53.54 a barrel on renewed fears of a supply glut.Lower oil prices are weighing on the FTSE, with Brent crude down 1.7% at $53.54 a barrel on renewed fears of a supply glut.
The UK's FTSE 100 gave up early gains and sunk to lows not seen since August 2016 as a dip in oil stocks on oversupply concerns overrode initial cheer from Wall Street where strong U.S. data had helped drive a dramatic rebound."Oil stocks sink FTSE 100… https://t.co/AAnZgjY32HThe UK's FTSE 100 gave up early gains and sunk to lows not seen since August 2016 as a dip in oil stocks on oversupply concerns overrode initial cheer from Wall Street where strong U.S. data had helped drive a dramatic rebound."Oil stocks sink FTSE 100… https://t.co/AAnZgjY32H
The FTSE 100 is currently down 36 points or 0.5% at 6,650.44 - the lowest since early August 2016 in the aftermath of the Brexit vote.The FTSE 100 is currently down 36 points or 0.5% at 6,650.44 - the lowest since early August 2016 in the aftermath of the Brexit vote.
Here are the biggest fallers as it stands:Here are the biggest fallers as it stands:
A quick update on the pound, which is roughly flat against the dollar this morning, at $1.2634.A quick update on the pound, which is roughly flat against the dollar this morning, at $1.2634.
Against the euro, sterling is down 0.3% at €1.1091.Against the euro, sterling is down 0.3% at €1.1091.
Russ Mould, investment director at AJ Bell, ponders what history might tell us about current market volatility:Russ Mould, investment director at AJ Bell, ponders what history might tell us about current market volatility:
The FTSE 100 is treating a 5% surge in America’s S&P 500 benchmark with a good degree of caution and it is easy to see why, even if that was the eighteenth biggest single-day gain in the US index since 1970.The FTSE 100 is treating a 5% surge in America’s S&P 500 benchmark with a good degree of caution and it is easy to see why, even if that was the eighteenth biggest single-day gain in the US index since 1970.
Encouragingly, three of the seventeen other 5%-plus daily advances came immediately in the aftermath of the 1987 Crash, when buying did prove a good plan, and two more in March 2009 when the S&P finally hit bottom as the Great Financial Crisis began to abate.Encouragingly, three of the seventeen other 5%-plus daily advances came immediately in the aftermath of the 1987 Crash, when buying did prove a good plan, and two more in March 2009 when the S&P finally hit bottom as the Great Financial Crisis began to abate.
But history also shows eight of the 5%-plus gains came during the bear market of 2007-2009 and three more during the market downturn of 2000-2003, to suggest there is still a risk that this year’s Boxing Day bonanza could be no more than a wicked bear trap set to lure investors into more trouble.But history also shows eight of the 5%-plus gains came during the bear market of 2007-2009 and three more during the market downturn of 2000-2003, to suggest there is still a risk that this year’s Boxing Day bonanza could be no more than a wicked bear trap set to lure investors into more trouble.
That may explain why the FTSE 100 is hardly responding at all and investors and traders alike will be looking out for a couple of further definitive signals before they decide it really is time to buy on the dips following this year’s Christmas sell-off.That may explain why the FTSE 100 is hardly responding at all and investors and traders alike will be looking out for a couple of further definitive signals before they decide it really is time to buy on the dips following this year’s Christmas sell-off.
US futures are also down, after yesterday’s major rally on Wall Street:US futures are also down, after yesterday’s major rally on Wall Street:
US futures down 1% this morning following yesterday's 5% rally...#DOW 22633 -1.06%#SPX 2442 -1.02%#NASDAQ 6176 -1.34%US futures down 1% this morning following yesterday's 5% rally...#DOW 22633 -1.06%#SPX 2442 -1.02%#NASDAQ 6176 -1.34%
Wall Street’s Boxing Day surge has failed to materialise in Europe, where markets are now mixed:Wall Street’s Boxing Day surge has failed to materialise in Europe, where markets are now mixed:
FTSE 100: -0.4% at 6,662FTSE 100: -0.4% at 6,662
Germany’s DAX: -0.6% at 10,572Germany’s DAX: -0.6% at 10,572
France’s CAC: +0.7% at 4,660France’s CAC: +0.7% at 4,660
Italy’s FTSE MIB: -1% at 18,216Italy’s FTSE MIB: -1% at 18,216
Spain’s IBEX: +0.1% at 8,491Spain’s IBEX: +0.1% at 8,491
Europe’s STOXX 600: -0.1% at 335Europe’s STOXX 600: -0.1% at 335
Gatwick Airport is back in the news today but thankfully it’s not drone-related.Gatwick Airport is back in the news today but thankfully it’s not drone-related.
US investment fund Global Infrastructure Partners (GIP) is selling a majority stake (50.01%) in the UK’s second biggest airport for £2.9bn to France’s Vinci Airports.US investment fund Global Infrastructure Partners (GIP) is selling a majority stake (50.01%) in the UK’s second biggest airport for £2.9bn to France’s Vinci Airports.
Gatwick adds to Vinci’s extensive network of airports, including Lisbon, Porto and Funchal in Portugal, and Lyon-Saint-Exupéry and Nantes Atlantique in France.Gatwick adds to Vinci’s extensive network of airports, including Lisbon, Porto and Funchal in Portugal, and Lyon-Saint-Exupéry and Nantes Atlantique in France.
Nicolas Notebaert, president of Vinci Airports, has his sights set on growth:Nicolas Notebaert, president of Vinci Airports, has his sights set on growth:
As Gatwick’s new industrial partner, Vinci Airports will support and encourage growth of traffic, operational efficiency and leverage its international expertise in the development of commercial activities to further improve passenger satisfaction and experience.As Gatwick’s new industrial partner, Vinci Airports will support and encourage growth of traffic, operational efficiency and leverage its international expertise in the development of commercial activities to further improve passenger satisfaction and experience.
Gatwick airport sold to French groupGatwick airport sold to French group
One man who has tracked the ups and downs of Wall Street more than most is Peter Tuchman – the most famous face on the trading floor of the New York Stock Exchange.One man who has tracked the ups and downs of Wall Street more than most is Peter Tuchman – the most famous face on the trading floor of the New York Stock Exchange.
Headline-grabbing swings in US markets are often accompanied by photos of Tuchman, whose ability to capture the moment in a series of dramatic expressions and poses is second-to-none.Headline-grabbing swings in US markets are often accompanied by photos of Tuchman, whose ability to capture the moment in a series of dramatic expressions and poses is second-to-none.
Dominic Rushe, business editor for Guardian USA, has interviewed the man himself in the must-read piece below:Dominic Rushe, business editor for Guardian USA, has interviewed the man himself in the must-read piece below:
Peter Tuchman: rollercoaster ride is written on Wall St's most famous facePeter Tuchman: rollercoaster ride is written on Wall St's most famous face
The Boxing Day surge on Wall Street was not attributed to any one factor, but was probably helped by a Mastercard report which showed a jump in consumer spending over the holiday season.The Boxing Day surge on Wall Street was not attributed to any one factor, but was probably helped by a Mastercard report which showed a jump in consumer spending over the holiday season.
Stephen Innes, on the Singapore trading desk of currency specialist Oanda, gives his take:Stephen Innes, on the Singapore trading desk of currency specialist Oanda, gives his take:
Thankfully for investors, the relentless selling on the back of risk-off sentiment which prevailed leading up to Xmas has mercifully halted as US stock markets recorded significant gains with the Dow surging over 1,000 points while adding the most significant points gain in history.Thankfully for investors, the relentless selling on the back of risk-off sentiment which prevailed leading up to Xmas has mercifully halted as US stock markets recorded significant gains with the Dow surging over 1,000 points while adding the most significant points gain in history.
It didn’t take much to persuade the bargain hunters into action as early retailer reports are all pointing to a strong holiday season while investors took comfort in Kevin Hassett’s, chairman of the White House Council of Economic Advisers, affirmation that Jerome Powell’s job is “100 per cent” safe.It didn’t take much to persuade the bargain hunters into action as early retailer reports are all pointing to a strong holiday season while investors took comfort in Kevin Hassett’s, chairman of the White House Council of Economic Advisers, affirmation that Jerome Powell’s job is “100 per cent” safe.
The surge in online purchases over the holiday season should be a reminder for the markets never to underestimate the purchasing power of the US consumer, as Mastercard payments tracking between November 1 and Christmas Eve leapt 5.1% from a year ago.The surge in online purchases over the holiday season should be a reminder for the markets never to underestimate the purchasing power of the US consumer, as Mastercard payments tracking between November 1 and Christmas Eve leapt 5.1% from a year ago.
This data comes at the perfect time and will provide a huge relief for investors who had to watch with sheer horror the Christmas Eve plunge. There was a good buzz to buy the dip given the US underlying data suggested the latest rout was far too extreme and unwarranted.This data comes at the perfect time and will provide a huge relief for investors who had to watch with sheer horror the Christmas Eve plunge. There was a good buzz to buy the dip given the US underlying data suggested the latest rout was far too extreme and unwarranted.
And we’re off...And we’re off...
Most major European markets opened higher but Germany’s DAX and Italy’s FTSE MIB are lacking in festive cheer:Most major European markets opened higher but Germany’s DAX and Italy’s FTSE MIB are lacking in festive cheer:
FTSE 100: +0.5%FTSE 100: +0.5%
Germany’s DAX: -0.3%Germany’s DAX: -0.3%
France’s CAC: +0.3%France’s CAC: +0.3%
Italy’s FTSE MIB: -0.3%Italy’s FTSE MIB: -0.3%
Spain’s IBEX: +0.6%Spain’s IBEX: +0.6%
Europe’s STOXX 600: +0.5%Europe’s STOXX 600: +0.5%
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
European markets are reopening today after the Christmas break and investors will be hoping to see some of the festive cheer seen in the US on Boxing Day spreading to this side of the Atlantic.European markets are reopening today after the Christmas break and investors will be hoping to see some of the festive cheer seen in the US on Boxing Day spreading to this side of the Atlantic.
Wall Street had a major post-Christmas rebound on Wednesday, with the Dow Jones rising more than 1,000 points or nearly 5%, in the biggest ever one-day gain.Wall Street had a major post-Christmas rebound on Wednesday, with the Dow Jones rising more than 1,000 points or nearly 5%, in the biggest ever one-day gain.
Full story here:Full story here:
Dow up more than 1,000 points in biggest one-day gain everDow up more than 1,000 points in biggest one-day gain ever
Asian markets followed Wall Street higher, with the Nikkei in Tokyo rising 3.9% on Thursday, taking it out of the bear market it entered on Christmas Day with a 5% drop.Asian markets followed Wall Street higher, with the Nikkei in Tokyo rising 3.9% on Thursday, taking it out of the bear market it entered on Christmas Day with a 5% drop.
The post-Christmas rally in the US followed the worst-ever performance on Christmas Eve.The post-Christmas rally in the US followed the worst-ever performance on Christmas Eve.
When UK markets were last open on the 24th, the FTSE 100 hit its lowest close since September 2016, down 35 points or 0.5% at 6,685.When UK markets were last open on the 24th, the FTSE 100 hit its lowest close since September 2016, down 35 points or 0.5% at 6,685.
There isn’t much data due today, but we do have US weekly jobless claims figures at 1.30pm UK time.There isn’t much data due today, but we do have US weekly jobless claims figures at 1.30pm UK time.