Market report

Stalled interest rates boost consumer stocks

JD Sports in St James
JD Sports Fashion was a gainer

Decisions on either side of the Atlantic to leave Interest rates unchanged injected greater optimism into consumer-focused stocks.

While the accepted mantra is that rates will remain “higher for longer”, there are growing expectations that the next moves by central banks will be to cut, rather than raise, rates.

Retail stocks rose despite figures showing footfall in October was washed out by the wet weather, with UK shoppers falling by 5.7% year-on-year.

JD Sports Fashion, the high street seller of leisurewear leapt 5p to 131.25p and B&Q owner Kingfisher rose 7.5p to 222.5p, while the rates-induced enthusiasm spread to the holiday market and pub groups. Tui, Europe’s biggest tour operator, rose 14.75p to 446p, and JD Wetherspoon, the no-frills pubs chain, added 14p to close at 680.5p.

The positivity raised hopes that the FTSE 100 would finish the session on a high, only for it go into reverse and close down 28.8 points at 7,417.73.

It was the two oil and gas giants that dragged the index lower. Shell dropped 115.5p, or 4.2%, to 2652.5p and BP slid 8.75p, or 1.8%, to 489.75p as Middle East supply concerns eased.

The US economy generated fewer jobs than expected October, giving a lift to bond and stock prices.

The US Bureau of Labor Statistics reported that non-farm payrolls added 150,000 jobs in October, falling short of the expected 180,000 increase.

September’s figure was revised down to 297,000 from 336,000, and the unemployment rate rose to 3.9% from 3.8%. The figures add to growing signs that the US labour market is slowing down.

The pace of wage growth also slowed to 3.2% in the three months to October, the weakest since March 2021.

Steadily rising unemployment and decelerating wages growth is good news for inflation.

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