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UK jobless rate highest since 2016; reopening hopes lift travel shares; tech stocks slide – business live UK jobless rate highest since 2016; reopening hopes lift travel shares; tech stocks slide – business live
(30 minutes later)
Rolling coverage of the latest economic and financial newsRolling coverage of the latest economic and financial news
The pound has risen to a fresh near-three-year high against the US dollar.
Sterling has hit $1.411 against the greenback for the first time since April 2018.
The pound has been boosted in recent weeks by the success of the UK’s Covid-19 vaccination, and hopes that the economy will reopen this summer.
Craig Erlam of OANDA explains:
The dollar, meanwhile, is weaker as Federal Reserve chair Jerome Powell testifies to Congress - insisting that the Fed will use “its full range of tools” to support the economy.
Federal Reserve chair Jerome Powell is testifying to the Senate Finance Committee now, and maintaining a dovish approach.
He explains that the most important thing for the economy now is the Covid-19 vaccination programme.
Powell also warns that there is a ‘long way to go’ until the US has a full economic recovery -- another sign that the Fed isn’t in a rush to tighten policy.
And on inflation, Powell says there could be a temporary move higher due to base effects, but he doesn’t expect a large or persistent surge in inflation if consumer spending picks up substantially later this year.
Just in: America’s top central banker has warned that inflation and employment remain well below the Federal Reserve’s goals.Just in: America’s top central banker has warned that inflation and employment remain well below the Federal Reserve’s goals.
In his prepared testimony to Congress, Fed chair Jerome Powell says it will probably take “some time” to achieve substantial progress on bringing inflation to target and lowering unemployment.In his prepared testimony to Congress, Fed chair Jerome Powell says it will probably take “some time” to achieve substantial progress on bringing inflation to target and lowering unemployment.
This, as expected, is an indication from Powell that the current ultra-loose monetary policy will remain in place for some time.This, as expected, is an indication from Powell that the current ultra-loose monetary policy will remain in place for some time.
CNBC has the details.CNBC has the details.
Powell also flagged up that the economic damage caused by the pandemic means inflation is still notably soft in parts of the economy:Powell also flagged up that the economic damage caused by the pandemic means inflation is still notably soft in parts of the economy:
Here’s Fawad Razaqzada, analyst at Think Markets, on today’s moves:Here’s Fawad Razaqzada, analyst at Think Markets, on today’s moves:
Razaqzada reckons twp factors are in play:Razaqzada reckons twp factors are in play:
First, the fact that techs are falling and value stocks have been outperforming along with copper and crude oil are clear signs of rotation into assets that are expected to do well during good economic times. If this is the case, then the weakness for technology shares could be short-lived, and dip buyers will be happy to get back in at relatively inexpensive levels again.First, the fact that techs are falling and value stocks have been outperforming along with copper and crude oil are clear signs of rotation into assets that are expected to do well during good economic times. If this is the case, then the weakness for technology shares could be short-lived, and dip buyers will be happy to get back in at relatively inexpensive levels again.
But the flip side of the above argument is that the markets may have already priced in much of the prospective global recovery, spurred by vaccines and stimulus. Will rising inflation expectations become a reality? If so, could major central banks start ending emergency easing programmes that have supported global markets so far? This is the key risk facing the markets in the months ahead and so trading could become two-ways again rather than just up, up and more up for major US equity indices.But the flip side of the above argument is that the markets may have already priced in much of the prospective global recovery, spurred by vaccines and stimulus. Will rising inflation expectations become a reality? If so, could major central banks start ending emergency easing programmes that have supported global markets so far? This is the key risk facing the markets in the months ahead and so trading could become two-ways again rather than just up, up and more up for major US equity indices.
Tesla (-9%) isn’t the only major tech stock struggling today.Tesla (-9%) isn’t the only major tech stock struggling today.
Apple is down 3.5%, Amazon has lost 2.2%, Alphabet (Google) has fallen by 2.3% and Microsoft has lost 1.7% in early trading.Apple is down 3.5%, Amazon has lost 2.2%, Alphabet (Google) has fallen by 2.3% and Microsoft has lost 1.7% in early trading.
Wall Street has opened in the red, with technology stocks falling sharply.Wall Street has opened in the red, with technology stocks falling sharply.
The Dow Jones industrial average has dropped by 126 points, or 0.4%, to 31,394 points. The wider S&P 500 index is down 1%.The Dow Jones industrial average has dropped by 126 points, or 0.4%, to 31,394 points. The wider S&P 500 index is down 1%.
The Nasdaq composite is down 2.8%, or 377 points, at 13,155.The Nasdaq composite is down 2.8%, or 377 points, at 13,155.
And Tesla is leading the selloff, tumbling 10% to $638.And Tesla is leading the selloff, tumbling 10% to $638.
That’s its lowest level since the end of December, erasing the electric car company’s gains for 2021. Back in late January, it briefly hit $900.That’s its lowest level since the end of December, erasing the electric car company’s gains for 2021. Back in late January, it briefly hit $900.
Over in the US, house prices have jumped at the fastest rate in almost seven years.Over in the US, house prices have jumped at the fastest rate in almost seven years.
Home prices nationally increased by 10.4% year-on-year in December, according to the S&P/Case-Shiller home price index.Home prices nationally increased by 10.4% year-on-year in December, according to the S&P/Case-Shiller home price index.
Prices in the 20 largest metro areas jumped by 10.1%, the biggest annual rise since April 2014, with low borrowing costs and limited supply encouraging buyers to pay more.Prices in the 20 largest metro areas jumped by 10.1%, the biggest annual rise since April 2014, with low borrowing costs and limited supply encouraging buyers to pay more.
Worryingly, job losses across the UK’s wholesale and retail sectors have hit a record.Worryingly, job losses across the UK’s wholesale and retail sectors have hit a record.
The CBI’s latest ‘distributive trades’ survey, released this morning, shows that retail sales kept falling in the year to February. With internet sales growing at record pace, retail groups kept laying off staff.The CBI’s latest ‘distributive trades’ survey, released this morning, shows that retail sales kept falling in the year to February. With internet sales growing at record pace, retail groups kept laying off staff.
Employment across the wider distributive sector (retailers, wholesalers and car dealers) fell at the fastest pace since the survey began in 1983.Employment across the wider distributive sector (retailers, wholesalers and car dealers) fell at the fastest pace since the survey began in 1983.
The oil price has hit a new 13-month high today, lifted by the prospect of lockdown measures easing.The oil price has hit a new 13-month high today, lifted by the prospect of lockdown measures easing.
Brent crude traded as high as $66.79 per barrel, its highest since early January 2020, before dipping back.Brent crude traded as high as $66.79 per barrel, its highest since early January 2020, before dipping back.
It has risen steadily since November, when the first successful vaccine trial results raised hopes of an economic recovery in 2021.It has risen steadily since November, when the first successful vaccine trial results raised hopes of an economic recovery in 2021.
Bill Gates also struck a cautious note on bitcoin, telling Bloomberg TV yesterday that he’s not bullish about the cryptocurrency.Bill Gates also struck a cautious note on bitcoin, telling Bloomberg TV yesterday that he’s not bullish about the cryptocurrency.
Gates warned against retail investors being swept up in speculative “manias” - especially if they aren’t as rich as Elon Musk - and also cited its hefty energy demands, and the way it allows anonymous transactions.Gates warned against retail investors being swept up in speculative “manias” - especially if they aren’t as rich as Elon Musk - and also cited its hefty energy demands, and the way it allows anonymous transactions.
But, Gates does believe digital money is a good thing; saying the increased use of digital money by some emerging economies to get cash to citizens during the pandemic is a ‘super-positive’ move.But, Gates does believe digital money is a good thing; saying the increased use of digital money by some emerging economies to get cash to citizens during the pandemic is a ‘super-positive’ move.
Elon Musk, the maverick boss of Tesla, is no longer the world’s richest person after shares in the electric car company dropped 8.6% on Monday, wiping $15.2bn (£10.8bn) off his fortune.Elon Musk, the maverick boss of Tesla, is no longer the world’s richest person after shares in the electric car company dropped 8.6% on Monday, wiping $15.2bn (£10.8bn) off his fortune.
Musk, who last month leapfrogged Amazon founder Jeff Bezos to take the title of the world’s wealthiest person, dropped back into second place with a $183bn estimated fortune behind Bezos’ $186.3bn.Musk, who last month leapfrogged Amazon founder Jeff Bezos to take the title of the world’s wealthiest person, dropped back into second place with a $183bn estimated fortune behind Bezos’ $186.3bn.