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FTSE 100 Live: Stocks falter as Fed official dampens rate cut hopes

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FTSE 100 Live: Stocks falter as Fed official dampens rate cut hopes By Proactive Investors

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Published Dec 15, 2023 14:46
Updated Dec 15, 2023 15:11

© Reuters. FTSE 100 Live: Stocks falter as Fed official dampens rate cut hopes

Proactive Investors –

FTSE 100 down 71 points at 7,578
Consumer confidence improves in December
UK business activty at six-month high

US stocks mixed after Williams dampens rate cut hopes

The comments from John Williams have sparked a mixed retsrat across the pond.

Shortly after the opening, the Dow Industrial Average was down 81.43 points, 0.2%, at 37,166.92, the S&P 500 was down 10.66 points, 0.2%, at 4,708.89 although the Nasdaq Composite was up 40.64 points, 0.3%, at 14,802.20.

Williams, president of the Fed’s New York branch said: “We aren’t really talking about rate cuts right now,” but instead are still focused on whether rates are high enough to ensure that inflation would fall to the 2%.

“One thing we’ve learned even over the past year is that the data can move and in surprising ways, we need to be ready to move to tighten the policy further, if the progress of inflation were to stall or reverse,” Williams said, adding it’s “premature to be even thinking about March cuts.”

Neil Wilson at Markets.com said the comments signal the Fed was not entirely at ease with the degree to which the market swallowed the ‘pivot’.

“They’d maybe thought of it more of a leaning in rather than a volte face,” he added.

US Fed official plays down rate cut hopes

A leading Federal Reserve official has sought to temper speculation about imminent interest rate cuts from the US central bank, saying such discussions were “premature”.

The comments from John Williams, president of the Fed’s New York branch and a member of the rate-setting Federal Open Market Committee, came two days after the US central bank signalled that it expected rate cuts worth 75 basis points in 2024.

The comments sparked a rise in stocks.

“We aren’t really talking about rate cuts right now,” Williams said in an interview with CNBC on Friday. Instead, he said the Fed is still focused on is whether rates are high enough to ensure that inflation would fall to the 2 per cent target in a sustainable way.

Pearson shareholder calls for move to US listing

Pearson’s biggest shareholder has said that it should re-list in the US, arguing that leaving London would be better for shareholders as most of the education publisher’s business and rivals are based in North America.

The founder of Cevian Capital, Europe’s largest activist investor, said that joining the increasing number of London-listed companies moving out of the FTSE would be an “easy and effortless way” to increase the value of Pearson which has seen its market value flatline this year.

“Pearson is a US company with the majority of sales and executives there,” said Christer Gardell, managing partner of the Stockholm-based investor, in an interview with Bloomberg. “It is only due to historical reasons it is still listed in the UK.”

Pearson (LON:PSON) makes almost two-thirds of its £3.8 billion annual revenues in North America.

Shares in Pearson are down a touch, off 0.4%.

Reach jumps after phone hacking settlement

Shares in Reach PLC (LON:RCH) jumped despite Prince Harry, the Duke of Sussex, winning a High Court case over phone hacking charges against Mirror Group Newspapers Ltd.

However, as a result of this ruling that claimants ought to have been aware they had a potential claim within a few weeks of MGN admitting to wrongdoing, the company said all claims issued after October 2020 are “now likely to be dismissed other than where exceptional circumstances apply”.

The court handed down the judgment in favour of the duke, but awarded him only £140,600, well short of £443,025 sought.

“The level of these awards will assist the parties to calculate the appropriate level of damages for the remaining cases not impacted by the time limitation,” Reach said in a statement.

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