The FTSE and European stocks had mixed results on Monday following the US Federal Reserve chairman Jerome Powell's refusal of any interest rate reduction. The UK stock market opened higher on Monday, but the FTSE 100 surged by 8 points at 7,622.
The positive sentiment in the market was led by robust US economic data and CMC Markets' announcement of cost-cutting measures. In the United States, the ISM Non-Manufacturing PMI for January came in at 58.3, beating the consensus estimate of 54.0. This data signaled expansion in the US services sector and reinforced the view that the economy is continuing to recover strongly.
The group will continue to seek opportunities to drive efficiencies and control costs while remaining committed to investing in growth opportunities and ensuring its technology remains market leading
CMC Markets PLC
Jerome Powell Warns Against Moving Too Soon
According to the Federal Reserve Chairman, Americans may have to wait until beyond March for the central bank to lower interest rates since policymakers are still awaiting further economic data to support their prediction that inflation would fall to 2%.
Powell said on CBS's 60 Minutes that the Fed was aware of the risk of acting prematurely and reducing rates before the inflationary trend was completely contained.
Vodafone Reports Steady Progress in the Third Quarter
Vodafone made steady headway in the third quarter, with growth in Europe and Africa contributing significantly. Organically, total revenue expanded by 4.2%, bringing the figure to €11.37 billion, whereas services revenue also experienced growth of 4.7%, resulting in €9.38 billion.
On a reported basis, revenue fell by 2.3%, but this decline was largely due to the disposal of its Turkish business.
With growth in 14 out of 17 markets, the German market represented the smallest increment of 0.3% to the overall service revenue. The digital services revenue expansion for Vodafone Business quickened, advancing from 4.3% to 5.0%. Despite these positive results, the company's share price was largely unchanged, trading up only 0.5% at £127.90.
We maintained good service revenue momentum in the third quarter across both Europe and Africa, supported by a further acceleration of Vodafone Business, with our Cloud and Internet of Things services growing over 20%.” - Margherita Della Valle, Chief Executive
Margherita Della Valle, Chief Executive
ONS Revises Unemployment Rate Down to 3.9%
The Office for National Statistics (ONS) has revised the UK's unemployment rate down to 3.9% in the three months to November, the lowest level since the start of the pandemic. This revision was largely due to a higher-than-expected number of people who were economically inactive but not seeking work rather than an increase in employment. The unemployment rate had previously been estimated at 4.2%.
Iran used Lloyds and Santander Accounts
In response to revelations that Lloyds Banking Group helped Iran bypass international sanctions through a complex web of money transfers, shares in the banking group plummeted 1.5%. According to the Financial Times report, Tehran's intelligence services were involved in this illicit activity.
A report from The Financial Times uncovered that Lloyds and Santander UK offered banking services to undisclosed British entities linked to an Iranian petrochemicals organization based in the vicinity of Buckingham Palace, which is currently under international sanctions.
The US claims that the state-owned Petrochemical Commercial Company played a role in a complex network, where it is believed to have transferred large funds to the Iranian Revolutionary Guards Quds Force and joined forces with Russian intelligence organizations to finance Iranian proxy military units.
FTSE 100 Set for Modest Gains
The week is anticipated to begin with the FTSE 100 leading a plethora of PMI data. Spread betting firms are predicting a 15-point increase in London's lead index, which closed at 7,615.54 on Friday, down 6.62 points.
Despite a negative employment report dashing dreams of a March rate drop and had experts questioning if one would even come in May, US markets saw fresh gains on Friday. Back in London, the trading report from Vodafone will take center stage, followed by the services sector PMI reading.