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| FTSE 100 closes at another record high after US data boosts dollar - business live | FTSE 100 closes at another record high after US data boosts dollar - business live |
| (35 minutes later) | |
| 5.43pm GMT | |
| 17:43 | |
| European markets end higher | |
| As the FTSE 100 hit yet new highs, European markets also ended the week on a high note. | |
| Positive updates from JP Morgan and Bank of America helped the European banking sector, including the beleaguered Italian banks. So the final scores in Europe showed: | |
| Germany’s Dax jumped 0.94% to 11,629.18 | |
| France’s Cac closed up 1.2% at 4922.49 | |
| Italy’s FTSE MIB finished up 1.87% at 19,514.54 | |
| Spain’s Ibex ended 1.11% better at 9511.6 | |
| But in Greece, the Athens market dropped 2.03% to 651.70 | |
| In the US the Dow Jones Industrial Average - which came within a whisker of breaching the 20,000 barrier a week ago - is currently down around 10 points 19,881 after losing its early gains. | |
| 5.26pm GMT | |
| 17:26 | |
| Not everyone is convinced the market’s record breaking run can be sustained. | |
| Top fund manager Neil Woodford has just compared the current market euphoria with the dotcom bubble, with share prices rises out of sync with proper valuations. | |
| More here: | |
| 4.40pm GMT | 4.40pm GMT |
| 16:40 | 16:40 |
| On the continuing rise in the UK market, Connor Campbell, financial analyst at Spreadex, said: | On the continuing rise in the UK market, Connor Campbell, financial analyst at Spreadex, said: |
| Some decent data out of the US helped lift the dollar this afternoon, in the process clearing the way for the FTSE to hit a fresh high. | Some decent data out of the US helped lift the dollar this afternoon, in the process clearing the way for the FTSE to hit a fresh high. |
| Though both the retail sales and consumer sentiment figures, at 0.6% and 98.1 respectively, were a tad lower than expected, they still provided enough fuel for the dollar to overturn its earlier losses. Against the pound it went from half a percent down to 0.1% up, pushing sterling back under $1.22 in the process, while taking another 0.2% off the euro. The Dow Jones also reacted positively to the figures, rising around 15 points after the bell; that only just put the index over 19900, however, a level it has repeatedly struggled to escape since before Christmas. | Though both the retail sales and consumer sentiment figures, at 0.6% and 98.1 respectively, were a tad lower than expected, they still provided enough fuel for the dollar to overturn its earlier losses. Against the pound it went from half a percent down to 0.1% up, pushing sterling back under $1.22 in the process, while taking another 0.2% off the euro. The Dow Jones also reacted positively to the figures, rising around 15 points after the bell; that only just put the index over 19900, however, a level it has repeatedly struggled to escape since before Christmas. |
| 4.36pm GMT | 4.36pm GMT |
| 16:36 | 16:36 |
| FTSE 100 closes at another record high | FTSE 100 closes at another record high |
| For the 12th consecutive day the FTSE 100 has closed at another record high. | For the 12th consecutive day the FTSE 100 has closed at another record high. |
| After drifting for the early part of the day, the leading index was boosted during the afternoon as US retail sales and confidence figures lifted the dollar and weakening the pound. As has been the case since June’s Brexit vote, the fall in sterling gave a lift the to overseas earners which make up a large part of the FTSE 100. | After drifting for the early part of the day, the leading index was boosted during the afternoon as US retail sales and confidence figures lifted the dollar and weakening the pound. As has been the case since June’s Brexit vote, the fall in sterling gave a lift the to overseas earners which make up a large part of the FTSE 100. |
| So the index finished up 45.44 points at 7337.81. | So the index finished up 45.44 points at 7337.81. |
| This is the fourteenth day of rises, and also marks the sixth week of gains, the first time this has happened since June/July 2012. | This is the fourteenth day of rises, and also marks the sixth week of gains, the first time this has happened since June/July 2012. |
| Updated | Updated |
| at 4.54pm GMT | at 4.54pm GMT |
| 4.23pm GMT | 4.23pm GMT |
| 16:23 | 16:23 |
| Heading into the close, the FTSE 100 is well on course for another record closing high. The fall in the pound is one factor in the gains, as it has been since the Brexit vote, but there are others. Jasper Lawler, senior market analyst at London Capital Group, said: | Heading into the close, the FTSE 100 is well on course for another record closing high. The fall in the pound is one factor in the gains, as it has been since the Brexit vote, but there are others. Jasper Lawler, senior market analyst at London Capital Group, said: |
| There was a strong rebound in the pharmaceutical shares which sold-off in the wake of Donald Trump’s press conference. Markets have pared bets the President-elect’s hostile attitude to drug pricing would spill over to international markets. | There was a strong rebound in the pharmaceutical shares which sold-off in the wake of Donald Trump’s press conference. Markets have pared bets the President-elect’s hostile attitude to drug pricing would spill over to international markets. |
| Homebuilder Barratt Developments and Kingfisher were top risers whilst disappointing economic data from China and a downturn in the price of gold hurt mining company shares including Randgold Resources. | Homebuilder Barratt Developments and Kingfisher were top risers whilst disappointing economic data from China and a downturn in the price of gold hurt mining company shares including Randgold Resources. |
| Bank of America reported earnings per share ahead of estimates in results that bode well for other money-centre banks....Shares of UK-listed banks including Barclays, RBS and HSBC responded positively to the US results. | Bank of America reported earnings per share ahead of estimates in results that bode well for other money-centre banks....Shares of UK-listed banks including Barclays, RBS and HSBC responded positively to the US results. |
| On the pound, he said: | On the pound, he said: |
| This week the pound dropped to a three-month low against the dollar and a two-month low versus the euro. Next Tuesday Theresa May will set out the long-awaited approach the government will take before triggering article 50. The PM has difficult balancing act of trying to offer some more clarity to the British public, parliament and financial markets without losing the upper hand in negotiations with the EU. | This week the pound dropped to a three-month low against the dollar and a two-month low versus the euro. Next Tuesday Theresa May will set out the long-awaited approach the government will take before triggering article 50. The PM has difficult balancing act of trying to offer some more clarity to the British public, parliament and financial markets without losing the upper hand in negotiations with the EU. |
| If the Prime Minister confirms the UK will leave the single market in a “Hard Brexit”, the British pound could drop below 1.20 against the dollar, and quite possibly into “flash crash” territory soon thereafter. More likely the PM will be a little coyer. The uncertainty of being unspecific is not good for Sterling either, but leaving the door open to staying in the single market should support the pound. | If the Prime Minister confirms the UK will leave the single market in a “Hard Brexit”, the British pound could drop below 1.20 against the dollar, and quite possibly into “flash crash” territory soon thereafter. More likely the PM will be a little coyer. The uncertainty of being unspecific is not good for Sterling either, but leaving the door open to staying in the single market should support the pound. |
| There is a lot of UK economic data on tap next week too, but it will likely play second fiddle to politics. On Tuesday there is inflation data, Wednesday unemployment data and Friday sees the release of retail sales data. | There is a lot of UK economic data on tap next week too, but it will likely play second fiddle to politics. On Tuesday there is inflation data, Wednesday unemployment data and Friday sees the release of retail sales data. |
| Updated | Updated |
| at 4.24pm GMT | at 4.24pm GMT |
| 3.38pm GMT | 3.38pm GMT |
| 15:38 | 15:38 |
| Back with the situation in Greece, and German finance minister Wolfgang Schäuble has suggested the EU might take over the country’s bailout if the International Monetary Fund decided not to get involved. Here is the report from EurActiv via Reuters: | Back with the situation in Greece, and German finance minister Wolfgang Schäuble has suggested the EU might take over the country’s bailout if the International Monetary Fund decided not to get involved. Here is the report from EurActiv via Reuters: |
| Berlin is weighing up the possibility of the EU taking over theGreek bailout in the event that the International Monetary Fund decides to end its role in it, German Minister of Finance Wolfgang Schäuble said on Friday. | Berlin is weighing up the possibility of the EU taking over theGreek bailout in the event that the International Monetary Fund decides to end its role in it, German Minister of Finance Wolfgang Schäuble said on Friday. |
| In an interview with Süddeutsche Zeitung , Schäuble floated the idea that if the IMF decides to pull out, Europe could figure out its “own solution” within the eurozone. He added, though, that such a solution must guarantee a strict implementation of the bailout’s terms. | In an interview with Süddeutsche Zeitung , Schäuble floated the idea that if the IMF decides to pull out, Europe could figure out its “own solution” within the eurozone. He added, though, that such a solution must guarantee a strict implementation of the bailout’s terms. |
| “If we continue solely then we will have to better guarantee the agreements ... This role could be assigned to the ESM,” he emphasised, saying that if the absence of the IMF brings major changes [to the agreement] then the new conditions will need the approval of the German parliament - which is preparing for elections next autumn. | “If we continue solely then we will have to better guarantee the agreements ... This role could be assigned to the ESM,” he emphasised, saying that if the absence of the IMF brings major changes [to the agreement] then the new conditions will need the approval of the German parliament - which is preparing for elections next autumn. |
| However, Schäuble warned that if the Greek side does not deliver on its commitments, it will be the end of the current programme, and new negotiations will be required. | However, Schäuble warned that if the Greek side does not deliver on its commitments, it will be the end of the current programme, and new negotiations will be required. |
| It is the first time that the Merkel government has proposed a solution to the Greek crisis without the IMF. In Athens, this change of heart is described as unprecedented, because ever since the first bailout, Germany has insisted that the IMF must take part, on account of the European Commission’s supervisory mechanism. | It is the first time that the Merkel government has proposed a solution to the Greek crisis without the IMF. In Athens, this change of heart is described as unprecedented, because ever since the first bailout, Germany has insisted that the IMF must take part, on account of the European Commission’s supervisory mechanism. |
| 3.12pm GMT | 3.12pm GMT |
| 15:12 | 15:12 |
| #US consumer confidence remains high - has surged since Trump's victory. Consumers trust #Trump can in fact "make America great again" pic.twitter.com/wrIFff4BN9 | #US consumer confidence remains high - has surged since Trump's victory. Consumers trust #Trump can in fact "make America great again" pic.twitter.com/wrIFff4BN9 |
| 3.09pm GMT | 3.09pm GMT |
| 15:09 | 15:09 |
| Unsurprisingly, US consumer sentiment was dominated by the political situation given the election of Donald Trump as president. The survey’s chief economist Richard Curtin said: | Unsurprisingly, US consumer sentiment was dominated by the political situation given the election of Donald Trump as president. The survey’s chief economist Richard Curtin said: |
| The post-election surge in optimism was accompanied by an unprecedented degree of both positive and negative concerns about the incoming administration spontaneously mentioned when asked about economic news. The importance of government policies and partisanship has sharply risen over the past half century. From 1960 to 2000, the combined average of positive and negative references to government policies was just 6%; during the past six years, this proportion averaged 20%, and rose to new peaks in early January, with positive and negative references totaling 44%. | The post-election surge in optimism was accompanied by an unprecedented degree of both positive and negative concerns about the incoming administration spontaneously mentioned when asked about economic news. The importance of government policies and partisanship has sharply risen over the past half century. From 1960 to 2000, the combined average of positive and negative references to government policies was just 6%; during the past six years, this proportion averaged 20%, and rose to new peaks in early January, with positive and negative references totaling 44%. |
| This extraordinary level of partisanship has had a dramatic impact on economic expectations. In early January, the partisan divide on the Expectations Index was a stunning 42.7 points (108.9 among those who favorably mentioned government policies, and 66.2 among those who made unfavorable references). | This extraordinary level of partisanship has had a dramatic impact on economic expectations. In early January, the partisan divide on the Expectations Index was a stunning 42.7 points (108.9 among those who favorably mentioned government policies, and 66.2 among those who made unfavorable references). |
| Needless to say, these extreme differences would imply either strong growth or a recession. Since neither is likely, one would anticipate that both extreme views will be tempered in the months ahead. Nonetheless, it should be noted that among the majority of consumers who referred to neither positive nor negative views on government, the Expectations Index was a strong 90.9, supporting a real consumption growth of 2.7% in 2017. | Needless to say, these extreme differences would imply either strong growth or a recession. Since neither is likely, one would anticipate that both extreme views will be tempered in the months ahead. Nonetheless, it should be noted that among the majority of consumers who referred to neither positive nor negative views on government, the Expectations Index was a strong 90.9, supporting a real consumption growth of 2.7% in 2017. |
| 3.06pm GMT | 3.06pm GMT |
| 15:06 | 15:06 |
| US consumer confidence marginally disappoints but still high | US consumer confidence marginally disappoints but still high |
| After slightly disappointing US retail sales figures come some slightly disappointing confidence figures, although the figures remain high. | After slightly disappointing US retail sales figures come some slightly disappointing confidence figures, although the figures remain high. |
| The preliminary University of Michigan survey of consumer sentiment came in at 98.1 in January, down from 98.2 in December and below expections of a figure of 98.5. | The preliminary University of Michigan survey of consumer sentiment came in at 98.1 in January, down from 98.2 in December and below expections of a figure of 98.5. |
| Updated | Updated |
| at 3.11pm GMT | at 3.11pm GMT |
| 3.00pm GMT | 3.00pm GMT |
| 15:00 | 15:00 |
| Pound falls and helps push FTSE 100 higher | Pound falls and helps push FTSE 100 higher |
| Continuing worries about Brexit, reinforced after Thursday’s news that UK prime minister Theresa May will make a speech on the subject on Tuesday, have put more pressure on the pound. | Continuing worries about Brexit, reinforced after Thursday’s news that UK prime minister Theresa May will make a speech on the subject on Tuesday, have put more pressure on the pound. |
| It it on course for its fifth week of falls in the last six against the dollar, and is currently down 0.21% at $1.2137. | It it on course for its fifth week of falls in the last six against the dollar, and is currently down 0.21% at $1.2137. |
| Against the euro it has fallen 0.16% to €1.1437. If it closes at this level it will be the lowest since 9 November. | Against the euro it has fallen 0.16% to €1.1437. If it closes at this level it will be the lowest since 9 November. |
| The weak pound of course has boosted the prospects for the overseas earners which make up a large proportion of the FTSE 100, lifting the index 0.46% to 7325 and on course for yet another record closing high. | The weak pound of course has boosted the prospects for the overseas earners which make up a large proportion of the FTSE 100, lifting the index 0.46% to 7325 and on course for yet another record closing high. |
| Meanwhile the Dow Jones Industrial Average is edging closer to the elusive 20,000 barrier, up 0.14% to 19,918. | Meanwhile the Dow Jones Industrial Average is edging closer to the elusive 20,000 barrier, up 0.14% to 19,918. |
| 2.47pm GMT | 2.47pm GMT |
| 14:47 | 14:47 |
| In case you missed it, there is more controversy in the confectionary world following the decision by the makers of Toblerone to cut costs by widening the gaps between the chocolate peaks. | In case you missed it, there is more controversy in the confectionary world following the decision by the makers of Toblerone to cut costs by widening the gaps between the chocolate peaks. |
| US food manufacturing giant Mondelēz, which makes Toblerone, has further angered consumers by announcing plans to hike the price of its Cadbury’s Freddo bars from 25p to 30p in the spring. | US food manufacturing giant Mondelēz, which makes Toblerone, has further angered consumers by announcing plans to hike the price of its Cadbury’s Freddo bars from 25p to 30p in the spring. |
| Mondelēz said it was selectively increasing prices as a “last resort”. Read our full story: | Mondelēz said it was selectively increasing prices as a “last resort”. Read our full story: |
| 2.36pm GMT | 2.36pm GMT |
| 14:36 | 14:36 |
| US markets open higher | US markets open higher |
| US markets are up a touch, with decent US retail sales and strong quarterly earnings from Bank of America and JP Morgan Chase providing some cheer. | US markets are up a touch, with decent US retail sales and strong quarterly earnings from Bank of America and JP Morgan Chase providing some cheer. |
| Dow Jones: +0.1% at 19,919 | Dow Jones: +0.1% at 19,919 |
| S&P 500: +0.1% at 2,274 | S&P 500: +0.1% at 2,274 |
| Nasdaq: +0.2% at 5,558 | Nasdaq: +0.2% at 5,558 |
| 2.30pm GMT | 2.30pm GMT |
| 14:30 | 14:30 |
| Here is our full story on the investigation into the “flash crash” in the pound last October, which stunned traders and policymakers: | Here is our full story on the investigation into the “flash crash” in the pound last October, which stunned traders and policymakers: |
| 2.19pm GMT | 2.19pm GMT |
| 14:19 | 14:19 |
| IG expects US markets to open modestly higher: | IG expects US markets to open modestly higher: |
| US Opening Calls:#DOW 19904 +0.07%#SPX 2272 +0.07%#NASDAQ 5046 +0.11%#IGOpeningCall | US Opening Calls:#DOW 19904 +0.07%#SPX 2272 +0.07%#NASDAQ 5046 +0.11%#IGOpeningCall |
| 2.17pm GMT | 2.17pm GMT |
| 14:17 | 14:17 |
| Reaction is coming in to those US retail sales figures, which showed growth of 0.6% in December. It was a touch below expectations of a 0.7% rise. | Reaction is coming in to those US retail sales figures, which showed growth of 0.6% in December. It was a touch below expectations of a 0.7% rise. |
| Rob Carnell, chief international economist at ING, said the figures were good enough to justify a March hike in US interest rates: | Rob Carnell, chief international economist at ING, said the figures were good enough to justify a March hike in US interest rates: |
| US December retail sales were not as good as had been expected. But having said that, the consensus was aggressively optimistic, and sales were not particularly weak in an absolute sense, with both main measures showing gains over the previous month. | US December retail sales were not as good as had been expected. But having said that, the consensus was aggressively optimistic, and sales were not particularly weak in an absolute sense, with both main measures showing gains over the previous month. |
| There is therefore no good reason why this data should deter the Fed from hiking rates again at their March meeting if they want to do so, which we think they do. | There is therefore no good reason why this data should deter the Fed from hiking rates again at their March meeting if they want to do so, which we think they do. |
| Markets are still anticipating a very cautious Fed, with only about a 30% chance of a March hike, in contrast to our own forecast that the Fed does hike by another 25 basis points at the March meeting. | Markets are still anticipating a very cautious Fed, with only about a 30% chance of a March hike, in contrast to our own forecast that the Fed does hike by another 25 basis points at the March meeting. |
| Paul Ashworth, chief US economist at Capital Economics, said there was nothing to suggest consumer spending would weaken in the first half of 2017: | Paul Ashworth, chief US economist at Capital Economics, said there was nothing to suggest consumer spending would weaken in the first half of 2017: |
| With consumer confidence surging to multi-year highs after the election and employment / wage growth still solid, there is no reason to suspect that consumption growth is going to weaken in the first half of this year. | With consumer confidence surging to multi-year highs after the election and employment / wage growth still solid, there is no reason to suspect that consumption growth is going to weaken in the first half of this year. |
| Particularly not when households will be anticipating a potentially big decline in tax rates at some point this year. | Particularly not when households will be anticipating a potentially big decline in tax rates at some point this year. |
| 2.05pm GMT | 2.05pm GMT |
| 14:05 | 14:05 |
| Sticking with the US, the reporting season for banks is underway. | Sticking with the US, the reporting season for banks is underway. |
| Bank of America and JP Morgan Chase have both reported a sharp rise in quarterly earnings, boosted by a surge in activity following Donald Trump’s victory in the US presidential election. | Bank of America and JP Morgan Chase have both reported a sharp rise in quarterly earnings, boosted by a surge in activity following Donald Trump’s victory in the US presidential election. |
| Jamie Dimon, chief executive of JP Morgan Chase, said America’s largest bank by assets had grown market share in virtually all of its businesses in the three months to 31 December. | Jamie Dimon, chief executive of JP Morgan Chase, said America’s largest bank by assets had grown market share in virtually all of its businesses in the three months to 31 December. |
| He added: | He added: |
| The US economy may be building momentum. Looking ahead there is opportunity for good, rational and thoughtful policy decisions to be implemented, which would spur growth, create jobs for Americans across the income spectrum and help communities. | The US economy may be building momentum. Looking ahead there is opportunity for good, rational and thoughtful policy decisions to be implemented, which would spur growth, create jobs for Americans across the income spectrum and help communities. |