• FTSE 100 closes up

  • US-China talks to resume

  • Legal action taken to block Johnson’s bid to suspend parliament 

5.10pm: Footsie closes higher

FTSE 100 closed higher as fears subsided over US-China trade and ahead of the Labor Day weekend across the Pond.

The UK’s premier share index closed 22.86 points up at 7,207.18.

Over the week as a whole, which was truncated by the Bank Holiday, the index gained around 1.6%.

The mid-cap FTSE 250 was also up, adding 101.13 points at 19,393.63.

“Yesterday, Beijing made it clear they won’t be striking back at the US in terms of tariffs, and some dealers are taking the view the US then has no need to ramp up tensions. The two sides are due to meet to discuss trade next month, and there is a feeling we are approaching September on an optimistic note,” said analyst David Madden, market analyst at CMC Markets.

Data from the US was mixed and so were stocks, with personal income last month (July) rising 0.1% compared to June, which was below the 0.3% rise expected by economists. Personal spending rose 0.6%, which was in line with consensus

But consumer prices rose 1.4% year-over-year, which was below the Federal Reserve’s target of 2%, fuelling speculation that the central bank will decide to cut interest rates at the September meet.

The Dow Jones Industrial Average added 17.06 points, while the broader based S&P 500 shed 1.17 points. The tech-heavy Nasdaq lost 32.37 points.

3.50pm: President Trump at Fed again

President Donald Trump is calling on the Federal Reserve again to cut interest rates to spur investment in the stock market. He also accused struggling companies of blaming his tariffs on Chinese imports for poor results. 

Trump’s remarks come amid signs a trade dispute with China is hurting the US economy. US factories have told the president that new tariffs on Chinese imports that he has promised for next week would provide a further drag on the slowing sector. 

3.00pm: US stocks rise in early trading 

US stocks have opened higher on hopes that Beijing and China will end their trade truce when they meet next month.

The Dow Jones Industrial Average rose 142 points to 26,504, the S&P 500 advanced 16 points to 2,940 and the Nasdaq Composite gained 44 points to 2,940. 

Shares of Dell Technologies and Campbell Soup gained after the companies reported well-received results.

Meanwhile, investors were assessing the fact that the Federal Reserve’s preferred measure of inflation continued to miss the central bank’s 2% target in July.

“Since the Fed set its 2% target in 2012, headline PCE inflation and core PCE inflation have been below 2% for 84% and 86% of the time, respectively, leading the Fed to be concerned about the persistent downside misses in its ‘symmetrical’ 2% target,” Berenberg said. 

“We remain sceptical that Fed funds rate cuts will actually boost inflation to this target on a sustained basis.”

2.00pm: Fed’s preferred measure of inflation undershoots target 

US consumer spending gained 0.6% in July after a 0.3% rise in June, the Commerce Department has revealed.

That’s slightly better than the 0.5% increase expected by analysts.

Consumer prices as measured by the personal consumption expenditures (PCE) price index rose 1.4% year-on-year last month after a 1.3% increase in June, as predicted.

The Federal Reserve’s preferred measure of inflation – the core PCE price index, which excludes volatile food and energy components – rose at an annual rate of 1.6% in July, unchanged from the previous month and in line with analysts’ expectations.

The core PCE price index has undershot the Fed’s 2% this year. 

12.15pm: FTSE 100 advances in lunchtime trading 

The FTSE 100 rose 48 points to 7,232 at the midday mark as investors digested UK economic data and news that the US and China would resume trade talks next month. 

Mining giants Rio Tinto PLC (LON:RIO) and BHP Group PLC (LON:BHP) were among the top risers on London’s top tier index after a waste spill at a nickel plant in Papua New Guinea sparked supply fears.

Worries about a trade war between China and the US eased after China’s commerce ministry said Beijing and Washington were discussing the next round of face-to-face talks in September.

Across the pond, US stock futures are pointing to a higher open. Futures on the Dow Jones Industrial Average rose 158 points to 26,536, S&P 500 futures gained 17 points to 2,944 and Nasdaq futures gained 50 points to 7,762. 

11.40am: Legal attempt to stop proroguing parliament in Northern Ireland will not be heard today

A legal attempt in Northern Ireland to stop the prorogation of parliament has also taken a back seat. 

An application in Belfast High Court for an injunction against Boris Johnson’s decision to suspend parliament will not be heard on Friday, according to the Press Association. 

Northern Ireland’s Lord Chief Justice Sir Declan Morgan told campaigner Raymond McCord, who made the legal bid, a judge would decide on 3 September if the case should be heard later that week if he decided to pursue the legal action. 

It comes after the Court of Session in Edinburgh denied an emergency order to block prorogation. But Judge Lord Doherty brought forward a full hearing on the case to next Tuesday.

10.50am: Edinburgh’s Court of Session refuses an emergency order to block parliament prorogation

A cross-party group of MPs and peers opposed to Boris Johnson’s bid to suspend parliament have been denied an interim block at the Court of Session in Edinburgh. 

The group filed a petition at Scotland’s highest civil court earlier this summer aiming to stop the Prime Minister being able to prorogue parliament. They called for an interim interdict on Thursday to halt the suspension until a final decision has been made on the case.

However, Judge Lord Doherty dismissed the action ahead of a full hearing set for 3 September. 

Northern Ireland’s Lord Chief Justice Sir Declan Morgan is to hold a substantive hearing at the Belfast High Court this morning. 

A third challenge brought by campaigner Gina Miller at the High Court in London is being considered.

Former prime minister Sir John Major said he would seek the Court’s permission to intervene in the claim already initiated by Miller, rather than to start separate proceedings.

10.00am: UK mortgage approvals hit two-year high, house price growth subdued

The number of mortgages approved in the UK has reached a two-year high, according to Bank of England data.

UK lenders approved 67,306 mortgages in July, compared to 66,506 in June.

The Bank of England also reported that lending to businesses fell by £4.2bn in July, the steepest fall since August 2017.

An earlier report from Nationwide showed house prices edged up 0.6% in August from a year ago to an average of £216,096.

“Annual house price growth remained below 1% for the ninth month in a row in August, at 0.6%,” Robert Gardner, Nationwide’s chief economist said.

“While house price growth has remained fairly stable, there have been mixed signals from the property market in recent months.

“Surveyors report that new buyer enquiries have increased a little, though key consumer confidence indicators remain subdued.”

9.30am: UK data shows declines in consumer and business confidence 

UK consumer confidence waned in August due to rising concerns about Brexit, according to a survey by GfK.

GfK’s indicator of consumer confidence fell to minus 14 this month from minus 11 in July, compared to analysts’ forecasts of minus 10. 

Expectations for personal finances and the general economy over the next 12 months slumped, the survey showed. 

“Until Brexit leaves the front pages – whenever that will be – consumers can be forgiven for feeling nervous not just about the wider economy but also about their financial situation,” said GfK client strategy director Joe Staton. 

A separate survey showed companies were more pessimistic in August.

The Lloyds Bank business barometer fell to 1% this month from 13% in July, the lowest level since December 2011. 

Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, said: “We have seen a dip in overall business confidence this month, with firms appearing less positive about their own trading prospects and the broader economy”

8.50am: FTSE 100 rallies as US-China trade spat worries ease

The FTSE 100 opened in positive territory after China’s commerce ministry said Beijing and Washington were discussing the next round of face-to-face talks in September.

“We may be facing up to the reality of recession but optimism continues to flow through the veins of investors following comments from the Chinese Commerce ministry on Thursday,” said Oanda analyst Craig Erlam. 

Closer to home, Prime Minister Boris Johnson has promised a renewed effort to secure a deal with the EU before the Brexit deadline. The UK and the EU will meet twice a week next month in the run-up to a crucial summit on 17 and 18 October. It follows backlash from MPs and opponents over the prime minister’s decision to suspend Parliament next month to push through his plan to leave the EU with or without a deal. 

The suspension of parliament has increased the likelihood of a hard Brexit if Johnson fails to secure a new deal in time. That news put renewed pressure on the pound. 

In early trading on Friday, the pound was broadly flat against the dollar at US$1.2171. 

In company news, Shoe Zone PLC (LON:SHOE) shares slumped 30% to 134p after it issued a profit warning and announced the departure of its chief executive. 

On the upside, Premier Foods PLC (LON:PFD) gained 2.5% to 33.85p as it appointed a new chairman and chief executive.

6.45am: FTSE 100 tipped higher

The FTSE 100 is predicted to open higher on Friday as rather cautious optimism over an improvement in global trade continued to fuel risk appetite for markets.

According to the IG spread-betting platform, the FTSE 100 will open around 14 points higher after closing up 69 points on Thursday at 7,184.

Glimmers of hope on the prospect to improved trade relations between the US and China also drove a strong performance in the US markets yesterday, with the Dow Jones closing 1.25% higher while the S&P 500 rose 1.27% and the Nasdaq was lifted 1.48%.

It was a similar picture in Asian markets on Friday, with the Japanese Nikkei 225 up 1.17% and Hong Kong’s Hang Seng rising 0.67%.

On the currency markets, the pound was relatively steady against the dollar, down 0.02% at US$1.2186, as traders awaited the next phase of the ongoing ‘deal or no-deal’ drama from Brexit.

“While it would appear that we look set for a decent week of gains for equity markets in general, there’s always that nagging doubt that we’re only a Presidential tweet away from another sharp sell-off and for all of the gains of the last few days, and what appears to be a fragile truce, the fact remains that tariff barriers will increase further on the 1st September, increasing the costs of doing business for companies worldwide”, said Michael Hewson, chief market analyst at CMC Markets UK.

Traders may also take heart from expectations that the European Central Bank will be more likely than not the embark on what Hewson said was a “significant [interest] rate reduction” and a stimulus plan for the eurozone following comments from Bank of Finland Governor Olli Rehn, who hinted that the ECB needed to overdeliver on market expectations when it meets next month.

UK consumer confidence data

On the data front, there is a UK consumer confidence reading due for release on Friday.

In July, the UK GfK UK Consumer Confidence score came in at minus 11, a small improvement on June, but still a relatively weak reading.

While it will be closely eyed to see how the Great British public are feeling, the reading is unlikely to move the FTSE 100, like similar data would in the US.

That’s largely because Britain’s blue-chips aren’t that exposed to the UK economy, although those on the more domestically-focused FTSE 250 might be a bit more sensitive to the number.

Significant announcements expected for Friday August 30:           

Interims: Grafton Group PLC (LON:GFTU), BBGI PLC (LON:BBGI), Cathay International Ltd (LON:CTI), EMIS PLC (LON:EMIS)

Economic data: UK GFK consumer confidence, Nationwide house price index, UK mortgage approvals, UK consumer credit, US personal consumption expenditure index, University of Michigan consumer confidence

Around the markets:

Sterling: US$1.2182, down 0.05%

Brent crude: US$60.54 a barrel, up 0.08%

Gold: US$1,528.1 an ounce, up 0.1%

Bitcoin: US$9,489.1, down 1.1%

Proactive news headlines:

Premier African Minerals Ltd (LON:PREM) said it will ask shareholders to approve the sale of its interest in Circum Minerals Ltd as part of a possible fundraise.

Adamas Finance Asia Ltd (LON:ADAM) has completed the second stage of a joint investment in a luxury ski resort development in Japan.

Polymer maker Itaconix PLC (LON:ITX) has promoted its finance and operations director to the role of chief financial officer. Laura Denner, who joined Itaconix as its financial controller in 2013, will take over from the departing Michael Norris on 1 September.

Alba Minerals Resources Plc (LON:ALBA), in its interim results, highlighted the Clogau Welsh gold project and the Horse Hill oil project as key assets with the shortest route to success.

City headlines:

Saudi Aramco is considering Tokyo as the international venue for its planned $2 trillion stock market listing in a potential snub to London – Times

The trade war could end up costing China another $2.5 trillion of lost potential GDP if the battle intensifies further, Standard and Poor’s has warned – Telegraph

Mike Ashley faces a shareholder rebellion after the advisory firm Institutional Shareholder Services joined calls for Sports Direct investors to vote against his continuing as a director – Guardian

Vodafone UK is seeking to overturn a move by regulator Ofcom to relax restrictions on how much BT can charge for business fibre connections, saying it will result in higher bills for companies, universities and hospitals – Reuters

Boris Johnson is to “step up the tempo” of talks in Brussels to secure a new Brexit deal – Financial Times