FTSE 100 Live: Stocks flat as weak GDP data dents festive mood

Proactive Investors -

• FTSE 100 closes up 3 points at 7,698
• UK GDP falls 0.1% in third quarter, retail sales rise
• JD Sports hit by downbeat Nike (NYSE:NKE) outlook

1:00pm: Merry Christmas from everyone at Proactive

That is all from the market report today, a huge thank you for reading today, and every day.

On behalf of everyone at Proactive we wish you a happy and healthy Christmas.

Keep an eye out over the coming days for our reviews of the year, top stories from 2023 and also check out what our ‘stock experts’ have tipped for 2024.

Proactive’s own stock guru Billy Farrington plugged Nvidia this time last year, up 242% year-to-date, so it’s well worth a read.

12:45pm: FTSE 100 fails to join the festive mood

The FTSE 100 has ended little changed in the shortened pre-Christmas trading session.

At the close, London's blue-chip index was 2.78 points at 7,697.51 while the FTSE 250 climbed 59.98 points, 0.3%, at 19,630.95.

It's been a quiet session but moves of note included JD Sports Fashion , down 5.3%, after the downbeat update from Nike and Harbour Energy (LON:HBR), up 5.5% afer the positive reaction to its $11.2 billion acquisition.

The mixed economic news seems to have been shrugged aside with the dip in GDP a marginal change from before while the jump in retail sales needs to be put in context of huge volatility in these numbers.

12:05pm: US stock futures lower ahead of US inflation data

The FTSE 100 is trading just in the green, in the shortened session and volumes are light.

Traders will be wary of taking large positions ahead of a key inflation report in the US which will likely dictate the path of US stocks today.

In pre-market trading, futures for the Dow Jones Industrial Average were down 0.3%, while those for the S&P 500 were 0.1% lower and contracts for the Nasdaq 100 futures declined 0.2%.

Joshua Mahony at Scope Markets said markets will be firmly focused on the latest core PCE price index data with mixed messages from the Federal Reserve bringing the need for greater clarity over the direction of US inflation.

“The incessant push for Federal Reserve members to rein in expectations over the pace of 2023 rate cuts does pose a risk for markets given the lofty expectations of 150 basis points worth of downside to the Fed funds rate,” he suggested.

The Fed's favoured inflation gauge is expected to tick lower from the October 3.5% reading, he said, but “bulls will hope to see price pressures abate at a faster clip to the benefit of risk assets.”

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“Nonetheless, it is abundantly clear that we will not see this gauge fall back to target by the time markets expect to see the Fed cut rates, highlighting the strong chance that current market pricing is somewhat unrealistic.”

On a busy day of economic news, figures for durable goods orders, consumer sentiment and housing will also be released.

Nike is out of favour, down 11% in pre-market trading after it warned of a softer revenue outlook in its second half and that it planned to cut $2bn in costs over the next three years.

11:40am: Rail fares to rise nearly 5% in March

Regulated rail fares in England will rise by nearly 5% in March, the Department for Transport (DfT) said.

The DfT has set a cap of 4.9% for increases to most fares regulated by the Government, which include season tickets on most commuter journeys, some off-peak return tickets on long distance routes and flexible tickets for travel around major cities.

July's RPI measure of inflation, which is traditionally used to determine annual fare rises, was 9.0%.

The previous cap on increases in regulated fares was 5.9%.

Transport Secretary Mark Harper said: "Having met our target of halving inflation across the economy, this is a significant intervention by the Government to cap the increase in rail fares below last year's rise.

Fares will rise on March 3.

11:07am: Prospects brighter for 2024 despite third quarter GDP dip

Martin Beck chief economic advisor to the EY ITEM Club said October's decline in GDP, the growing drag from past rises in interest rates, and industrial action holding back activity “mean the economy in Q4 is likely to flatline at best, with a technical recession a serious possibility.”

But he added prospects for 2024 are improving.

“Inflation is falling faster than had been expected and declines in wholesale gas prices point to a cut in energy bills in the spring, implying a better consumer outlook,” he noted.

Stronger disinflationary pressures are likely to see the Bank of England retreat from its hawkish rhetoric, meaning interest rates could be cut earlier and more significantly than many had been anticipating, he pointed out.

“So, a worse-than-expected performance this year should be balanced by a better outlook for 2024 and 2025,” he reasoned.

Back to the quarter three figures. As The Sun's Business Editor Askey Armstrong pointed out when an economy is chugging along recession is always a possibility.

Simon French at Panmure Gordon said "it's squeaky bum time" as to whether the UK avoids a technical recession or not.

Time will tell.

UK GDP is now estimated to have shown no growth in the second quarter (April to June), revised down from a previously estimated increase of 0.2%, while growth in the first quarter was unrevised.

In output terms, there was a 0.2% fall in the services sector in the third quarter, which offset a 0.4% increase in construction output and a 0.1% increase in the production sector.

7:00am: FTSE 100 seen lower ahead of UK GDP and US inflation

The FTSE 100 is expected to open lower on Friday, despite some festive cheer on Wall Street, as investors look ahead to a key US inflation reading and UK GDP and retail sales data.

Spread betting companies are calling London's lead index down by around 16 points after closing down 20.95 points at 7,694.73 on Thursday.

In the US on Thursday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.9%, the S&P 500 up 1.0% and the Nasdaq Composite up 1.3%.

After the London close, investors will be keeping an eye on a key US personal consumption expenditures price index print which is the Federal Reserve's preferred metric of inflation.

Stocks to watch include JD Sports Fashion after a downbeat outlook from Nike.

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