FTSE 100 seen lower after US sell-off
Friday’s late sell-off for Wall Street shares means European markets will start the week on the back foot, with CMC Markets expecting the FTSE 100 index 31 points lower at 7533.
The S&P 500 index and Dow Jones Industrial Average finished down by around 0.5% after it emerged the US economy created fewer than expected jobs in July. One of the bright spots of the session came from Amazon, which rose 8% on the back of Thursday’s results.
Despite the drop in non-farm payrolls to 187,000, traders remain unsure about whether the Federal Reserve has room to pause interest rate rises at their meeting next month.
The uncertainty and the fallout from the Fitch rating downgrade for US debt contributed to the S&P 500 dropping by more than 2% last week after registering declines in the four past sessions.
Markets in Asia have reflected the Wall Street uncertainty by trading in the red, with the Shanghai Composite down 0.8% and the Hang Seng Composite off 0.2%.
Halifax house prices down, but decline remains slow
House prices fell again in July, according to the country’s biggest mortgage lender Hallifax, but at a slower rate than in June as the housing market continues to be surprisingly resilient to the surge in interest rates.
The average price is down 0.3% month-on-month and down 2.4% year-on-year. But the year-on-year decline was slower than the 2.6% dip in June.
Kim Kinnaird, director of Halifax Mortgages, noted that nearly all the decline came in the wake of the mini-Budget last year, anbd prices over the last six months had been more or less steady.
“In reality, prices are little changed over the last six months, with the typical property now costing £285,044, compared to £285,660 in February,” Kinnaird said. “The pace of annual decline also slowed to -2.4% in July, versus -2.6% in June. These figures add to the sense of a housing market which continues to display a degree of resilience in the face of tough economic headwinds.
“In particular, we’re seeing activity amongst first-time buyers hold up relatively well, with indications some are now searching for smaller homes, to offset higher borrowing costs. Conversely the buy-to-let sector appears to be under some pressure, though elevated interest rates are just one factor impacting landlords’ business models, together with considerations of future rental market reforms. It remains to be seen how many may choose to exit and what that could mean for the supply of properties available to buy.”
That comes despite 14 consecutive interest rate hikes from the Bank of England, which raised its interest rates to 5.25% last week.
Recap: Friday’s top stories
Good morning. Here’s a summary of our top stories from Friday:
This morning we’re expecting results from recruitment firm PageGroup, which should shed light on hiring trends in the Economy.