- FTSE 100 flat at the open
- UK GDP disappoints, down 0.1%
- Consumer confidence at 4-month high
- Boohoo deems Ashley and Lennon inappropriate
- US producer prices hotter than expected
- EIA lowers 2025 outlook for Brent Crude prices
Derren Nathan, head of equity research, Hargreaves Lansdown:
“Friday the 13th hasn’t started in too terrifying a fashion, with the FTSE 100 flat at the open. That’s after small losses incurred earlier in the week, suggesting markets weren’t too hopeful of anything special in today’s GDP figures.
The UK economy has failed to deliver an early Christmas present for Sir Keir Starmer and Rachel Reeves, after it unexpectedly contracted 0.1% in October with construction and manufacturing both showing weakness, and services stagnating.
On a brighter note, consumers are feeling more optimistic than they have for a while with the GfK consumer confidence index reaching a four-month high in December of minus 16. But with the major purchase index unmoved since last month, it may be more mince pies than new TVs that feel the benefit this Christmas. That reflects ongoing concerns around the prospects for growth in 2025. Confidence levels for the economy over the next 12 months remained unchanged at minus 26.
In the latest twist in the saga between fast fashion house Boohoo and its major shareholder Frasers, the company has provided another response, reiterating its recommendation for shareholders to veto the appointment of Mike Ashley and Mike Lennon to the Board. It has shown some willingness to allow Frasers representation in the Boardroom in the form of a single seat if it puts forward an ‘appropriate’ candidate. But this move has the potential to be viewed as inflammatory rather than conciliatory. Flies on the wall at next week’s General Meeting could bear witness to some heated discussions.
The major US indices all closed in the red yesterday. In contrast to Consumer Price data earlier in the week Producer Price inflation came in at 3.0% for November ahead of consensus forecasts of 2.6%. US initial jobless claims also rose unexpectedly from 225k last week to 242k, pouring a little cold water on the economic outlook. In the round however, these data points haven’t dented the market’s strong conviction in a 25 point rate cut by the Fed in its final meeting of the year.
After a volatile Thursday, Brent Crude prices are up around 0.3% today to over $73.6 per barrel. That closely reflects the outlook given by the United States Energy Information Administration (EIA), which has lowered its average price forecast for 2025 from $76.06 to $73.58. It now sees a reduced risk of attacks on oil infrastructure in the Middle East in the wake of the ceasefire between Israel and Hezbollah. But its not just the supply side that’s driven expectations lower. Slowing oil demand in China also had its part to play.”
