The FTSE 100 (^FTSE) and European markets opened higher on Tuesday as investors digested a raft of economic data to gauge the health of the global economy and await more big earnings, including from Netflix and Tesla.
The FTSE 100 (^FTSE) rose 0.28% to 7,901.83, while the CAC 40 (^FCHI) in Paris went up 0.26% to 7,517.52 points. In Germany, the DAX (^GDAXI) also opened up 0.31% to 15,839.25.
US and Asia
In Asia, the major markets closed mixed as China’s economy grew more than analysts had expected at 4.5% year-on-year.
Tokyo’s Nikkei 225 (^N225) rose 0.51% to 28,658.83 points, while the Hang Seng (^HSI) in Hong Kong declined 0.85% to 20,606.11. In mainland China, the Shanghai Composite (000001.SS) reversed earlier losses and gained 0.21% to 3,392.72 points as consumer cyclicals and technology stocks dragged down the index.
Across the pond, US stocks advanced after a mixed bag of big earnings on Monday from the latest US banks.
Morgan Stanley (MS) and Bank of America (BAC) gained 3% and 2.9% respectively, while Wells Fargo (WFC) finished 4.2% higher. The EBW Bank index added 1.4% despite deposits dropping 5% in the first three months of the year. Charles Schwab’s (SCHW) share price also rose by 3.9%, despite an 11% drop in deposits in the first-quarter as customers moved to higher-yielding accounts.
The Dow Jones (^DJI) closed up 0.30% to 33,987.18 points on Monday, while the S&P 500 (^GSPC) gained 0.33% to 4,151.32 points. The tech-heavy NASDAQ (^IXIC) also ended trading in the green, gaining 0.28% to 12,157.72.
Investors will be keeping a close eye on the outlook for interest rates ahead of the next Federal Reserve meeting in May. It’s widely expected among analysts that the Fed will raise rates by another quarter percentage point.
More big earnings are also on the way, including from Tesla (TSLA) and Netflix (NFLX) later on Tuesday.
Bloomberg consensus estimates expect the streaming giant to report revenue of $8.18bn (£6.58bn) and earnings per share (EPS) at $2.86.
Naeem Aslam, chief investment officer at Zaye Capital Markets, said that for Netflix, user growth and customer loyalty will be of interest.
“Consumers are under pressure, and discretionary money remains very limited, causing them to cut down. As a result, we may not see as many customers willing to renew their membership. Another element that traders will consider is how the corporation has been able to get more members by pursuing password sharing.”
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Meanwhile, Tina Teng, analyst at CMC Markets, said Tesla’s profit margin is in doubt due to its generous price cuts, despite a record Q4 delivery number.
“Also, whether the EV maker can achieve its 2 million delivery number becomes suspicious amid severe Chinese carmaker competition,” she added.
Pound
The pound (GBPUSD=X) gained against the US dollar by 0.22% to 1.24. Against the euro, sterling (GBPEUR=X) also rose by 0.09% to 1.13.
Oil prices
Crude prices edged higher again on Tuesday after losing ground during the previous trading session after better-than-expected growth figures from China boosted sentiment on a growth in crude demand.
US crude oil, or West Texas Intermediate (CL=F), rose 0.28% to $81.06 a barrel, while Brent crude (BZ=F) also gained 0.40% to $85.10 a barrel.
Economic data
The UK unemployment rate ticked up as total pay growth rose faster than expected, with public pay growth jumping by the largest amount since 2005.
The UK unemployment rate for December 2022 to February 2023 increased by 0.1 percentage points on the quarter to 3.8%, according to the Office for National Statistics (ONS).
Read more: UK pay growth jumps as unemployment rate rises
The increase in unemployment, the ONS said, was driven by people unemployed for up to six months.
Total pay, including bonuses, grew at an annual rate of 5.9% in the three months to February, up from 5.7%.
However, when excluding bonuses, pay growth was unchanged from an upwardly revised pay growth figure of 6.6% for the three months to January.
Meanwhile, average regular pay growth for the public sector was 5.3% from December to February, compared to growth of 6.9% in the private sector.
In March, the number of staff on payrolls rose by 31,000, to 30 million. In January to March 2023, the estimated number of vacancies fell by 47,000, to 1,105,000. That’s the ninth consecutive fall in a row, going back to May to July 2022.
Investors will also be watching UK inflation data due out on Wednesday.
Deutsche Bank Research said in a note that after February’s inflation surprise, it expects price momentum to regain its downward footing.
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“A reversal of very strong clothing inflation alongside an unwind of some unusually strong price increases, we think, will push CPI and RPI lower, with the former dropping below double digits for the first time in six months,” Deutsche Bank said.
“What to expect? We see headline CPI slowing to 9.73% y-o-y with core CPI slipping to 5.85% y-o-y. Services CPI, we estimate, will drop to 6.3% y-o-y. And headline RPI will likely edge down to 13.29% y-o-y. Risks to our forecasts are tilted to the upside.”
Euro area inflation data for March is also due on Wednesday.
Watch: Netflix earnings: Here’s what to expect from the call
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