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FTSE 100 LIVE: London underperforms against peers as latest US data confirms Fed rate cut expectations

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The FTSE 100 (^FTSE) underperformed against its European peers on Thursday morning, continuing to be in consolidation mode, as the latest batch of US data reinforced expectations that the Federal Reserve will cut interest rates for a third time in a row next week.

Bets on a US rate cut have risen to around 90%, helped by Fed officials signalling that protecting jobs now takes priority over squeezing lingering inflation.

That shift was sharpened by ADP figures on Wednesday showing that 32,000 jobs were lost in November, well below the expected 10,000 gain from Bloomberg.

“Hiring has been choppy of late as employers weather cautious consumers and an uncertain macroeconomic environment,” ADP chief economist Nela Richardson said.

The reading was also the most since early 2023 and is the latest example of a stuttering labour market.

Elsewhere, WPP (WPP.L) has been relegated from the FTSE 100 after nearly 30 years, as the advertising giant battles with an exodus of clients and the growing AI and data capabilities of rivals.

Once the world’s largest advertising group, its market valuation has plummeted from around £24bn in 2017 to £3.1bn.

The company’s share price has plunged by two-thirds this year alone, and it has now been relegated from the blue chip index after a quarterly reshuffle, which was confirmed when stock markets closed on Wednesday afternoon.

British Land (BLND.L), which was the most valuable company in the FTSE 250, was promoted to take WPP’s spot.

  • London’s benchmark index (^FTSE) was 0.1% lower in early trade.

  • Germany’s DAX (^GDAXI) rose 0.7% and the CAC (^FCHI) in Paris headed 0.3% into the green.

  • The pan-European STOXX 600 (^STOXX) was up 0.3%.

  • Wall Street is set for a muted start as S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were mostly lower.

  • The pound was flat against the US dollar (GBPUSD=X) at 1.3353 after its best day since April against the US greenback.

Follow along for live updates throughout the day:

LIVE 5 updates

  • Commentary: ‘Britain’s energy grid is no longer fit for purpose;

    Commentary is pouring in regarding the £28bn energy upgrade.

    A Department for Energy Security and Net Zero spokesperson said:

    Meanwhile, Greenpeace UK’s senior climate advisor, Charlie Kronick, said:

  • UK households to foot bill for £28bn energy grid investment

    A rise in energy bills is set to help fund a £28bn investment in the UK’s energy network, it has been revealed.

    Energy regulator Ofgem has approved the funding in its five-year plan on improving electricity and gas grids. The work is estimated to add £108 to energy bills by 2031.

    The majority of the spending – £17.8bn – will maintain Britain’s gas networks and £10.3bn will improve the nation’s high-voltage electricity network, the biggest expansion of the grid since the 1960s.

    However, Ofgem have reassured that people would end up saving about £80 more than they otherwise would, as the investment will help lower the reliance on imported gas and make wholesale energy cheaper, leading to a net energy bill rise of about £30.

    Jonathan Brearley, Ofgem chief executive, said the regulator isn’t allowing “investment at any price”, adding:

  • Gold rally rubs off on silver

    Silver (SI=F) touched fresh record highs this week before easing on Wednesday as traders positioned ahead of a busy run of US economic data, showing that gold (GC=F) isn’t the only precious metal that shines.

    Precious metals have rallied on expectations of lower US interest rates and a weaker dollar. Futures markets now assign an 88% chance of a Federal Reserve rate cut in December, according to CME’s FedWatch tool, following a run of cooler US data and increasingly dovish signals from policymakers.

    Silver, often nicknamed the “Devil’s metal” because of its volatility, has also gained support due to concerns that the US could include the metal in future tariff measures, following its addition to the Geological Survey’s list of critical minerals last month. That shift has driven inflows into the US market.

    At the time of writing, silver futures were trading at $58.85 per ounce after peaking at $59.65 on Monday, while spot price was trading at $58.40. Silver has risen 101% this year, supported in part by its addition to the US list of critical minerals.

    Prices have risen over the past week as falling Treasury yields, a softer dollar and growing conviction over a near-term Fed cut revived appetite for precious metals. Silver has outperformed gold due to its higher sensitivity to easing financial conditions. Investor positioning has become more constructive, with increased exposure to metals showing strong momentum ahead of key risk events.

    Industrial demand indicators have reinforced the move, with solar and electronics orders staying firm and exchange inventories remaining tight. Limited physical supply has heightened the impact of speculative flows, contributing to a short-term squeeze.

    Read the full article here

  • Asia and US overnight

    Stocks in Asia were mixed overnight with the Nikkei (^N225) rising 2.3% on the day in Japan, while the Hang Seng (^HSI) up 0.7% in Hong Kong.

    In the bond markets, Japan’s 30-year bonds gained following an auction that attracted the highest demand since 2019, as elevated yields drew in investors. The yield on the 30-year bond decreased 3bps to 3.39% after the bid-to-cover ratio surged to 4.04, up from 3.125 at the previous auction in November.

    This strong outcome for the 30-year auction followed a successful sale of 10-year debt earlier in the week, which also saw robust demand.

    However the rally at the long end today seems to have been funded from elsewhere in the curve with the 10yr yield 3.8bps higher this morning.

    The Shanghai Composite (000001.SS) was 0.6% down by the end of the session and in South Korea, the Kospi (^KS11) added 0.2% on the day.

    Across the pond on Wall Street, the S&P 500 (^GSPC) rose 0.3%, closing less than 1% beneath its record high from late-October.

    However, there were some fluctuations over the session, and Microsoft (MSFT) shares fell 2.5% after tech news outlet The Information reported that the company had lowered their AI software sales quota. That was pushed back on by a spokesperson for Microsoft, and the share price recovered a bit when CNBC reported they had not lowered the quotas.

    However, Microsoft shares then sold off again into the close, reviving investor fears about AI valuations. Nevertheless, is wasn’t enough to knock the broader market. The Magnificent 7 (+0.12%) still rose on the day thanks to a 4.1% gain for Tesla (TSLA).

    The tech-heavy Nasdaq (^IXIC) was 0.2% higher and the Dow Jones (^DJI) gained 0.9%.

  • Coming up

    Good morning, and welcome back to our markets live blog. As usual we will be taking a deep dive into what’s moving markets and happening across the global economy.

    To the day ahead, we will get the US weekly initial jobless claims, the November construction PMIs from the UK and Germany, and Eurozone retail sales for October. Central Bank spearers include the Fed’s Bowman, the ECB’s Kocher, Cipollone and Lane, and the BOE’s Mann. Notable earnings include Kroger, Dollar General and HPE.

    Here’s a snapshot of what’s on the agenda:

    • 7am: Trading updates: Frasers Group plc (Sports Direct), SSP, Baltic Classifieds and Watches of Switzerland, Balfour Beatty

    • 9am: UK new car sales data for November

    • 9.30am: UK construction PMI report for November

    • 10am: Eurozone retail sales for October

    • 12.30pm: Challenger US job cuts report

    • 1.30pm: US weekly jobless claims 1.30pm