Market Report: FTSE 100 struggles as China demand called into question
- FTSE100 struggles at the open following weak Chinese data
- TUI considers delisting from the London Stock Exchange
- UK economic growth to be sluggish for years, according to the British Chambers of Commerce
- Alphabet unveils new AI model to challenge ChatGPT
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown:
“The FTSE 100 is struggling, following global markets downwards. Some of the pressure is coming from weaker than expected imports in China, which indicates a softening of demand and failed to offset optimism from better-than-forecast exports. A protracted period of demand malaise would send shivers through most markets, with the outlook from oil to luxury goods called into question.
Travel giant TUI is considering delisting from London after shareholders suggested a simplification to the group’s listing structure. Around three quarters of TUI’s shares are now traded in Germany, adding weight to the idea that a move would make sense. Since Brexit, keeping hold of trading liquidity in non-local names has become a tough task. The added costs and complexities of maintaining London listings simply aren’t worth it in some cases, and that’s a tough PR headache to cure for UK plc.
The British Chambers of Commerce has warned UK economic growth is going to be sluggish for years. Annual economic growth of 0.4 – 0.6% is expected over the next three years, which are hardly levels to get excited about, even if we do swerve a recession. The preoccupation with whether or not the UK economy is headed for contraction is taking away from the very real issues caused by stagnation. Business investment is expected to remain subdued and consumer spending power remains a concern. There’s evidence to show that shopping with cash has risen for the first time in a decade, which shows consumers are quite literally counting the pennies. A unique set of workforce issues and a creaking consumer base doesn’t spell prosperity for the UK in the short-term, however you frame it.
Google parent Alphabet has unveiled a new AI model, with grandiose claims it can outperform ChatGPT. The model is called Gemini and has demonstrated advanced reasoning skills – and further breakthroughs from other providers should be expected as the AI arms race heats up. Regulators aren’t standing idly by though, with increased scrutiny around the governance and safety of AI products. Exactly how this will shakedown to the release of new capabilities remains to be seen, but one thing’s for sure – the front runners in AI have incredibly deep pockets to throw at any regulatory hurdles.
