Business
Stocks end down as Fed policy meeting begins
Stock prices in London closed mostly lower on Tuesday as expectations of a rate cut from the US Federal Reserve continue to dominate.
It follows the release of industrial and retail data in the US.
The Fed started its two-day key policy meeting on Tuesday, AFP reported, hours after Stephen Miran narrowly won confirmation to join the central bank.
Stephen Miran, who has been a key advisor to US President Donald Trump, took the oath of office as a Fed governor on Tuesday after narrowly winning a senate vote on Monday night to become one of the FOMC’s 12 voting members.
It remains to be seen if he will push for larger rate cuts as the US president has repeatedly demanded, with markets widely expecting a 25 basis points cut at the end of discussions on Wednesday.
The FTSE 100 index closed down 81.37 points, 0.9%, at 9,195.66.
The FTSE 250 ended down 154.72 points, 0.7%, at 21,491.87, and the AIM All-Share closed up 0.48 points, 0.1%, at 767.87.
“A barrage of US companies are expected to announce big investments in the UK to coincide with Donald Trump’s state visit,” said AJ Bell’s Russ Mould.
“Google-owner Alphabet is the latest name in the frame, with news it will spend £5 billion in the UK on AI-related infrastructure investments and scientific research… (but) the expected wave of US investment wasn’t enough to lift the UK stock market.
“The FTSE 100 gets more than two-thirds of its earnings from overseas, so even policies that can potentially boost growth domestically may not have the impact on the constituents of the UK’s leading stock market index that some might expect.”
Anglo American, on the FTSE 100, gained 0.6%.
The miner has formally completed its copper tie-up with the Chilean state-owned mining company Codelco.
It comes after the two companies back in February this year signed a memorandum of understanding for a framework to implement a joint mine plan for their adjacent copper mines of Los Bronces and Andina in Chile.
Student accommodation provider Unite Group lost 1.7%.
The UK Competition & Markets Authority has invited comments on Unite’s proposed acquisition of Empiric Student Property, in the first step ahead of a potential formal investigation into the deal.
Empiric, whose shareholders are set to own 10% of the combined firm if the deal goes ahead, was down 1.1% on the FTSE 250.
Also on the FTSE 250, Pollen Street Group closed 3.0% higher.
The London-based asset manager said it was encouraged by growing demand for mid-market alternatives and asset-based lending, as it announced first-half pre-tax profit growing 28% annually to £29.6 million while total income climbed 17% to £63.8 million.
Pollen Street also declared an interim dividend of 27.0 pence, up 1.9%.
Chief financial officer Crispin Goldsmith said the firm “is trading in line with expectations”, adding: “The group remains in a strong position and is strategically well placed and well resourced for further growth through H2 2025 and beyond.”
On AIM, Focusrite closed 15% higher.
The music and audio products hailed a “resilient performance” in the face of tough market conditions, with revenue rising to £87 million for the six months to August 31 and to £168 million for the 12 months.
Focusrite has changed its year-end to February 28 from the end of August.
It expects adjusted Ebitda for the 12 months to August to be within the market forecast range, which it puts at £24.5 million to £26.0 million.
Stocks in New York were lower.
The Dow Jones Industrial Average was down 0.4%, the S&P 500 index down 0.2%, and the Nasdaq Composite down 0.1%.
The yield on the US 10-year Treasury was quoted at 4.05%, widening from 4.04%.
The yield on the US 30-year Treasury was quoted at 4.66%, widening from 4.65%.
US industrial production rose 0.1% on-month in August after a downwardly revised fall of 0.4% in July, the Fed reported.
It outperformed the FXStreet-cited consensus of a 0.1% decline in August.
Also, according to the Census Bureau, US retail sales rose 0.6% in August from July, unchanged on-month but beating the FXStreet cited consensus of a 0.2% rise.
Separate data showed that the export price index rose 0.3% in August from July, though it had been expected to be flat.
The import price index advanced 0.3%, beating consensus of a 0.1% fall.
In other US news, Mr Trump said that the US and China had reached an agreement over TikTok, which Washington says must pass to US-controlled ownership.
“We have a deal on TikTok, I’ve reached a deal with China, I’m going to speak to President Xi on Friday to confirm everything up,” Mr Trump told reporters as he left the White House for a state visit to the UK.
“Neither side wants to be seen as weak, but there is also a desire to keep trade flowing between the two sides,” Mr Mould said.
“Progress on TikTok’s future in the US and US-China trade agreements more broadly have been slow, and they look set to drag on.
“Finding a middle ground that satisfies both the authorities in the US and China has proved to be difficult to achieve, which makes the prospect of a framework deal on TikTok’s US somewhat curious.
“More information is expected on Friday, and the structure of any potential agreement could provide hints to how future deals are struck more broadly between the US and China.”
In European equities on Tuesday, the CAC 40 in Paris closed down 1.0%, while the DAX 40 in Frankfurt ended down 1.8%.
German industrial major thyssenkrupp was up 4.9% in Frankfurt, after announcing that India’s Jindal Steel International has made a “non-binding, indicative offer” for its steel business Thyssenkrupp Steel Europe.
Thyssenkrupp, which has been looking to split itself into standalone businesses to boost profitability, would “carefully review” the offer and pay “particular attention” to what it would mean for employment at its sites, it added.
The pound was quoted higher at 1.3642 dollars at the time of the London equities close on Tuesday, compared to 1.3597 dollars on Monday.
The euro stood higher at 1.1837 dollars, against 1.1765 dollars.
Against the yen, the dollar was trading lower at 146.65 yen compared to 147.34 yen.
Brent oil was quoted higher at 68.32 dollars a barrel at the time of the London equities close on Tuesday, from 67.37 dollars late on Monday.
Gold was quoted higher at 3,680.32 dollars an ounce against 3,668.27 dollars.
The biggest risers on the FTSE 100 were Fresnillo, up 92.6p at 2,288.6p, J Sainsbury, up 5.0p at 322.8p, Croda International, up 39.0p at 2,556.0p, Glencore, up 3.7p at 310.55p, and Mondi, up 11.1p at 1,007.5p.
The biggest fallers on the FTSE 100 were Haleon, down 17.0p at 339.7p, easyJet, down 15.8p at 457.2p, Barclays, down 9.8p at 374.85p, Coca-Cola HBC, down 92.0p at 3,598.0p, and NatWest, down 13.4p at 524.4p.
On Tuesday’s economic calendar, as well as the Fed rate decision and press conference, look out for UK and eurozone consumer inflation.
On Tuesday’s UK corporate calendar, Barratt Developments releases full-year results; IP Group has half-year results; and Games Workshop holds its annual general meeting.
– Contributed by Alliance News
High home prices, stubbornly high mortgage rates and now less supply are all weighing on potential homebuyers.
Sales of previously owned homes rose just 0.5% in November from October and were 1% lower than November 2024, according to the National Association of Realtors. Sales came in at an annualized rate of 4.13 million units.
This count is based on closings, so it reflects contracts likely signed in September and October, when mortgage rates initially came down slightly but then stayed in a tight range.
Supply, which had been gaining for much of this year, fell in November. There were 1.43 million homes for sale at the end of the month, down 5.9% from October but up 7.5% year over year, according to the association. At the current sales pace, that represents a 4.2-month supply. A six-month supply is considered balanced between buyer and seller.
“Inventory growth is beginning to stall,” Lawrence Yun, chief economist for the Realtors, said in a release. “With distressed property sales at historic lows and housing wealth at an all-time high, homeowners are in no rush to list their properties during the winter months.”
Sellers who were on the market also began to delist their properties at a higher rate than usual. Sellers often take unsold homes off the market heading into winter, but that dynamic was much stronger this year.
And that is keeping pressure on home prices. The median price of a home sold in November was $409,200, an increase of 1.2% from November 2024, and the highest November reading on record. The Realtors use a median measurement, which can skew to what end of the market is selling most. The high end is currently doing much better than the low end. Sales of homes priced in the $100,000 to $250,000 range were down nearly 8% from a year ago, while homes priced at more than $1 million were up 1.4%.
“Wage growth is outpacing home price gains, which improves housing affordability. Still, future affordability could be hampered if housing supply fails to keep pace with demand,” Yun said.
Homes are staying on the market longer, at 36 days compared with 32 days last November. First-time homebuyers made up 30% of sales, unchanged from a year ago, but historically they make up about 40%. Investors stepped back into the market, making up 18% of transactions, up from 13% in November 2024.
Business
US monetary policy: Fed’s official sees no urgency for further rate cuts, flags distorted inflation data – The Times of India
A senior US Federal Reserve official has said there is no immediate need to cut interest rates further, cautioning that recent inflation data may have been distorted due to disruptions in data collection during the federal government shutdown, AFP reported.Speaking to CNBC on Friday, New York Federal Reserve President John Williams said inflation readings for recent months were likely affected because government agencies were unable to collect price data in October and the first half of November amid the record-long shutdown.“Because of that, I think the data were distorted in some of the categories, and that pushed down the consumer price index reading probably by a tenth or so,” Williams said, adding that it was difficult to precisely quantify the impact.He said inflation data for December could provide a clearer picture of the extent of the distortion.Williams’ remarks followed the release of a delayed US consumer price index report earlier this week, which showed inflation easing to 2.7 per cent in November from 3 per cent in September. Several economists had warned that the figures may not fully reflect underlying price pressures.Some analysts pointed out that a higher share of price quotes may have been collected during the Black Friday discount period, potentially biasing the data downward — a concern Williams echoed.Asked how the latest data influenced his outlook on interest rates, Williams said the Fed’s policy stance was appropriate for now.“I don’t personally have a sense of urgency to need to act further on monetary policy right now,” he said, adding that the rate cuts already delivered had positioned policymakers well.The Federal Reserve has cut interest rates three times this year as the labour market weakened, but has signalled a higher threshold for additional easing. The central bank’s next policy meeting is scheduled for late January.
Young people will be hit hardest by successive governments’ failure to focus on financial and societal challenges caused by an ageing population, a House of Lords report has suggested.
They will need to plan and prepare to work longer and save more from a much earlier age, the economic affairs committee said.
The report also found that the crisis in adult social care “remains a scandal” which needs to be addressed urgently.
Committee chair Lord Wood of Anfield told the BBC it was a “struggle to find where in government” there was a focus on ageing and the “transformational effects” it was going to have on people.
“Ageing is something that we’re just watching happening”, he told BBC Radio 4’s Today programme, adding: “We know that adaptation is the way forward”.
Policies governments have used to address the impact of declining fertility and rising life expectancy in the UK – raising the state pension age or increasing immigration for example – were not adequate solutions on their own, the report said.
Getting more people in their 50s and 60s to stay in or return to work “is key”, the committee said, and the government must prioritise incentives to do so.
It found that while age discrimination may reduce the number of over 50s working, it heard evidence that its most damaging form may be self-directed, with older workers mistaken about the extent they faced and then limiting their own decisions.
It also said an ageing population will need more care workers, leaving fewer workers for other parts of the economy.
There is “widespread ignorance” of how much it costs to retire, it said, and the government should consider an education campaign – as well as finding out if the UK’s financial services sector is equipped to provide for the population as it ages.
Lord Wood said that the government and financial services industry needs to devise “more innovative ways of getting younger people to think about lives frankly they can’t conceive of at the moment – when they’re in their eighties and early nineties.”
“There’s a long time for them to be financially planning for at a time when we know young people are doing less financial planning,” he added.
“Raising the state pension age, which saves the government money, but increases pensioner poverty as many people have already stopped working by their sixties, is a red herring.
“To successfully confront this challenge, the approach to financial management of today’s and tomorrow’s young people will need to change.”
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