FTSE 100 buoyant after US PCE data, Howden Joinery soars

The FTSE 100 displayed signs of positivity on Thursday with robust gains that accelerated after US PCE data showed US inflation has slowed.

Core Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation measure, came in bang in line with expectations at 2.8% for January, a decline from 2.9% in December.

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The data is precisely what traders hoping for interest rate cuts would have wished for. Lower PCE shows inflation in the US is slowing and presents the Federal Reserve with evidence they need to reduce borrowing costs. Personal Income rose 1%, demonstrating a healthy US economy withstanding the cost of living crisis and higher interest rates.

The goldilocks data sent global equities higher, and US bond yields fell. The FTSE 100 was breaking intraday highs at 7,669 at the time of writing, while US futures were sharply higher in the premarket.

The FTSE 100 gained despite several constituents trading ex-dividend as Howden Joinery and Haleon led the index higher.

“Several stocks, including Barclays, were lower as they traded ex-dividend, but strength in Glencore as the Chinese market continued to rebound, as well as other names with links to the world’s second largest economy, helped give the UK’s flagship index a lift,” said AJ Bell investment director Russ Mould.

London Stock Exchange Group

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London Stock Exchange Group provided a welcome boost to the outlook for UK equity markets in its preliminary full-year result released on Thursday as it noted encouraging signs in its IPO pipeline. That said, LSEG’s securities business accounts for a small part of revenue compared to the data and analytics business.

“London Stock Exchange Group may need to consider a name change given just 4% of its revenue comes from the bourse. It is seeing some signs of life in the IPO market which is good news for a pretty sickly UK market,” Russ Mould.

London Stock Exchange Group’s total income grew to £8bn, slightly ahead of expectations. Shares were down 0.4% at the time of writing.

Howden Joinery

Howden Joinery was the FTSE 100’s top gainer, with a rise of 8% after the builders’ supplier said revenue was flat in 2023 compared to 2022’s record revenue. Investors will be encouraged by Howden’s managed to maintain revenues despite broad softness in the UK housing market and a well-documented slowdown in new home sales.

The group said it was ‘encouraged’ by revenue post-period, which will be music to investors’ ears.

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