The US housing and import price data and some mixed company results - Kraft Heinz missed expectations, Coca-Cola bettered them - has push the futures into the red.
Reversing earlier gains, the Dow Jones Industrial Average is now expected to open around 13 points lower.
Meanwhile US import prices climbed by more than expected in January, adding to the signs of increasing inflationary pressures.
With increases in the cost of imported petrol and other goods, import prices climbed by 1% last month, compared to a 0.1% rise in December and expectations of a 0.6% increase.
Housing starts in January came in at 1.326m units, up from a revised December figure of 1.209m and higher than the expected 1.234. December’s figure was initially given as 1.192m units.
US markets are expected to open higher again, with the futures suggesting a 74 point initial rise on the Dow Jones Industrial Average. Craig Erlam, senior market analyst at Oanda, said:
US equity markets could end the week with a full house of gains as long as indices manage to hold onto the small gains being seen in futures ahead of the open.
This would also bring an end to two shocking weeks for equity markets that saw more than 10% quickly wiped off indices, the first time we’ve seen such a move since the start of 2016. While the prospect of higher yields and interest rates, combined with a surge in volatility, have been blamed for the decline, the rebound we’re now seeing reaffirms the belief that fundamentals are still strong which should prevent the situation deteriorating further.
The head of the British Chambers of Commerce has warned companies are facing a recruitment crisis and urged the government to act, in an article for the Guardian:
British companies are facing a recruitment crisis, with labour shortages hitting critical levels in some sectors, according to a business leader who has urged the government to produce details on a post-Brexit immigration system.
Adam Marshall, the director general of the British Chambers of Commerce, said the lack of candidates for some jobs was biting hard, and he warned ministers against bringing forward a “draconian and damaging” visa or work permit system.
Surveys by the BCC showed that nearly three-quarters of firms trying to recruit had been experiencing difficulties “at or near the highest levels since [BCC] records began over 25 years ago”, he said.
Here’s our full story on the UK retail sales. Sarah Butler writes:
January was a tough month for high street retailers as sales rose just 0.1%, far below City expectations, as higher prices continued to deter shoppers from spending.
City analysts had expected a recovery of around 0.5% last month, after the unexpectedly sharp fall of 1.4% in December. The figures from the Office for National Statistics (ONS) indicate a pick up in year-on-year growth to 1.6% in January, from 1.5% in December, but analysts had hoped for a bigger turnaround after a very disappointing end to last year.
Food sales fell again – down 0.9% in volume terms on December – but that was offset by a rise in sales of gym kit and children’s toys.
Rhian Murphy, ONS senior statistician, said: “Retail sales growth was broadly flat at the beginning of the new year with the longer-term picture showing a continued slowdown in the sector. This can partly be attributed to a background of generally rising prices.”
She said there had been a 0.9% decline in the volume of food compared with January 2017 while non-food rose 2.6%, led by sports equipment, games and toys. An uplift in sales of gym kit as consumers resolved to get fit and lose weight contributed to a year-on-year rise.
It was the sixth consecutive month of decline in the volume of food sold.
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