Proactive Investors –
- FTSE 100 up 68 points at 7,491
- Eurozone inflation cools more than expected
- Dr Martens (LON:DOCS) warns again on tough US trading
US inflation gauge cools as expected
The core personal consumption expenditures price index, which strips out the volatile food and energy components, rose 0.2% last month, according to the Bureau of Economic Analysis report out Thursday.
From a year ago, the Federal Reserve’s preferred gauge of underlying inflation advanced 3.5%.
The headline PCE index rose 3.0% on-year last month, cooling from September’s 3.4% rise.
The figures were in line with market hopes, boosting expectations that interest rates have peaked.
Inflation-adjusted personal spending rose 0.2% last month after a downwardly revised 0.3% advance in September, according to the Bureau of Economic Analysis, suggesting consumers are reigning back spending ami8d high interest rates.
The Fed’s latest Beige Book survey, released Wednesday, showed economic activity slowed in recent weeks as households pulled back on discretionary spending.
Separate numbers from the US Department of Labor on Thursday showed initial jobless claims amounted to 218,000 in the week that ended November 25 – this past Saturday – an increase from 211,000 the week before. The latest reading came in below the FXStreet-cited market consensus of 220,000. The previous week’s reading was upwardly revised from 209,000.
Continuing jobless claims totalled 1.927 million in the week ending November 18, picking up from 1.841 million the week prior. That reading was revised up slightly from 1.840 million.
Lloyds interested in Tesco (LON:TSCO)’s banking business – Bloomberg
UK grocer Tesco Plc’s banking business is attracting initial interest from Lloyds Banking Group PLC (LSE:LON:LLOY), people with knowledge of the matter said, according to Bloomberg.
Lloyds is among a number of suitors that have been studying a potential deal involving Tesco Bank, the people said, asking not to be identified because the information is private.
Deliberations are at an early stage, and there’s no certainty Lloyds will proceed with a formal offer. The structure of any potential transaction hasn’t been decided, and some bidders could opt to acquire Tesco Bank’s assets and liabilities rather than buy the entire operations.
BofA favours Lloyds as margin and volume pressures ease
Bank of America (NYSE:BAC) has highlighted that margin pressure and weak volumes on both sides of the balance sheet – which have weighed on UK domestic bank earnings and share prices – look a little better in October with spreads and volumes relatively stable.
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BofA said it still sees deposit migration and spread compression into 2024 but some recovery in mortgage spreads and, potentially, volumes.
A broad product suite and range of brands appear to be helping buy rated Lloyds Banking Group PLC (LSE:LLOY) navigate this better than peers, supporting strong profitability and capital distributions, it said.
BofA said after a 20 basis point decline in September, new household deposit spreads fell just 2bp in October but remained high at c293bp with deposit volumes relatively stable in October, with households flat and 1% corporate outflows.
The investment bank noted mortgage approvals picked up in October, combined with falling mortgage rates and stabilising house prices, could be an early sign of a modest mortgage market recovery in 2024 which “we would expect to support mortgage spreads.”
Lloyds Banking Group shares are 0.3% to the good.
Car production jumps for eight month in a row
Car production in the UK has increased for the eighth month in a row, with more than 91,000 vehicles built in October, new figures show.
The total was almost a third higher than the same month last year, and the best October performance since 2019, said the Society of Motor Manufacturers and Traders.
Production for the home and overseas markets grew by 23.9% and 33.4% respectively, with exports driving output.
More than four in five cars were shipped abroad, with export growth driven by a 58% increase in shipments to the EU, which remains the UK’s largest market by far, accounting for almost two-thirds of exports.
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