The FTSE 100 (^FTSE) remained largely unchanged on Tuesday morning, while European markets showed slight gains. This came amid a flurry of economic data marking the start of the new year. While US stocks initially opened higher, they eventually lost ground after new data revealed an unexpected rise in job openings for November.
Job Openings in the US Surge
In the United States, new figures from the Bureau of Labor Statistics showed that job openings increased more than anticipated in November. The number of open positions reached 8.1 million, up from 7.84 million in October. This development caused some concern among investors, leading to a decline in US stocks.
UK Faces Retail Struggles Despite Price Increases
The FTSE 100’s flat performance was partly influenced by troubling data from the UK. Kantar reported that grocery price inflation rose to 3.7% in December, while the British Retail Consortium revealed that retail sales during the crucial “Golden Quarter” period failed to meet expectations.
Retail giants such as Tesco (TSCO.L) and Sainsbury’s (SBRY.L) saw their stock prices drop by around 1.8%, following disappointing sales figures from the BRC. Conversely, fashion retailers Next (NXT.L) and JD Sports (JD.L) were among the top gainers in the index.
European Inflation Surpasses Expectations
Across the Channel, European inflation data for December aligned with economists’ expectations. Inflation in the Eurozone climbed to 2.4%, marking its third consecutive increase over the past three months. This inflation rise added some pressure to European markets, but overall, indices saw positive movement.
Germany’s DAX (^GDAXI) rose by 0.6%, while France’s CAC 40 (^FCHI) saw a 0.8% increase, driven by the inflation data. The pan-European STOXX 600 (^STOXX) also finished the day 0.4% higher after initially dipping.
US Markets Struggle Despite Positive AI Developments
Back in the US, stocks fell as investors remained uncertain about the future. While Nvidia (NVDA) shared promising updates regarding its AI plans, investors were still cautious about the potential impact of future tariffs and the latest labor market data. By the close of European trading, the S&P 500 (^GSPC) had lost 0.5%, and the tech-heavy Nasdaq (^IXIC) dropped by 1.1%. The Dow (^DJI) also closed slightly lower.
UK Retail Sales Growth Lags Expectations
In the UK, retail sales for the critical three-month period leading up to Christmas showed modest growth. The British Retail Consortium reported a year-on-year growth of just 0.4%, well below expectations. Food sales in December grew by 1.7%, but this was a sharp slowdown compared to the 6.3% growth seen in December 2023.
This slowdown in UK retail sales is part of a broader trend of declining consumer confidence, as inflation and high costs continue to put pressure on household spending. The figures for December were also below both the three-month average of 2.1% and the 12-month average of 3.3%.
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