Closing post
Time to wrap up.
Stock markets in Japan and Germany have closed for the year, posting 19% gains on another strong 12 months for equities.
But major bourses are weaker today, as investors worry that inflation may be sticky in 2025, hampering central banks from cutting interest rates.
Britain’s FTSE 100 index is down 51 points or 0.6% in late trading, while the US Dow Jones industrial average has lost 690 points or 1.6% – with Boeing leading the fallers, following the aeroplane crash in South Korea yesterday.
2024 has been tough for the pub industry, with more than 400 sites closing across England and Wales in the last year.
Here’s the rest of today’s news so far:
Chicago’s manufacturing sector contracted more sharply than expected this month, new data shows.
The Chicago Purchasing Managers’ Index has dropped to 36.9, indicating a contraction in the region’s factory sector.
Chicago PMI quite weak pic.twitter.com/yAEcxRQwZ4
— Market Rebellion (@MarketRebels) December 30, 2024
MNI: Chicago PMI plunges for Dec, ending '24 on sour note as over half of respondents saw new orders drop for 1st time since Jun '20 when there were gov't-imposed lockdowns; future sentiment may be rising since Trump's win, but current conditions are still deteriorating fast: pic.twitter.com/O3t513Se71
— E.J. Antoni, Ph.D. (@RealEJAntoni) December 30, 2024
Boeing shares fall after South Korea crash
Aircraft maker Boeing are the biggest faller on the Dow Jones industrial average in early trading, down 3.5%.
This follows the crash of a Jeju Air Boeing B737-800 at Muan international airport in South Korea on Sunday, in which all 175 passengers and four of the six crew members were killed after an emergency landing.
A team of US team air accident investigators will assist Korean air investigators, as air safety experts questioned why the plane had not been able to lower its undercarriage after one engine was hit by what appeared to be a bird strike.
South Korea plans to inspect all B737-800 Boeing aircraft operated by domestic airlines following the disaster.
These holiday-shortened sessions are tough. $BA shares are getting smacked following the crash of a South Korean Boeing 737. The airliner has ordered an inspection of all 737-800 series aircraft. $BA is a major component within the Dow.
— Jon Markman 🛸 (@jdmarkman) December 30, 2024
Wall Street has opened in the red too, with the main indices dropping over 1%.
DOW JONES INDEX OPENED DOWN 487.80 POINTS, FELL 1.13%, AT 42504.41 S&P 500 INDEX OPENED DOWN 76.44 POINTS, FELL 1.28%, AT 5894.4 NASDAQ INDEX OPENED DOWN 275.36 POINTS, FELL 1.40%, AT 19446.675
— Mukesh Pipaliya (@MukeshPipaliya_) December 30, 2024
Although it’s been a strong year for stock markets, many of them are in the red today as 2024 rather fizzles out.
The UK’s FTSE 100 index is still down today, off 32 points (-0.4%) at 8117 points; France’s CAC 40 index is off by a similar amount, but Italy’s FTSE Mib is flat.
David Morrison, senior market analyst at Trade Nation, says European indices were mixed this morning in “quiet, low volume trade”, explaining:
Asian Pacific stock indices were generally softer overnight, taking their lead from Friday’s Wall Street sell-off. Trading volumes were light, and no doubt this contributed to overall weakness.
While it has been an impressive year for many global stock markets, with the US tech giants leading the charge higher, there have been areas of disappointment. This is especially apparent in countries which have faced political difficulties, with South Korea and France both obvious casualties.
Although interestingly, the German DAX has easily outperformed its European rivals, despite having its own political uncertainties and an imminent General Election which has the potential to upend years of centrist control.
Over the last two years, Germany’s DAX share index has rallied by over 40% – despite the country’s economic problems.
Bloomberg has the details:
On Monday, the DAX Index closed the year 19% higher to extend a rally since January 2023 to 43%. While the export-heavy gauge has lagged the S&P 500 in the US for 2024, it far outpaced regional peers including the UK’s FTSE 100 and France’s CAC 40.
Today is also the final trading session in Frankfurt, where stocks have had a strong year despite plenty of upheaval.
The DAX share index has climbed almost 19% during 2024, making it the best-performing of the major European indices.
Germany's DAX index is expected to rise 19% by the end of 2024.
— Coby (@CobuzDan) December 30, 2024
SAP SE was the biggest contributor to 2024’s gains, Bloomberg points out, as investors sought technology plays, accounting for nearly a third of the index’s rally.
Updated
The last trading session of the year in Tokyo ended on a somber note, Marketwatch reports, with the Japan Exchange Group’s CEO Hiromi Yamaji apologizing during the traditional yearend ceremony over a recent insider trading case.
Yamaji said:
“I acknowledge trust towards the market is essential for investors to trade with confidence”
The exchange is working to improve training and verify findings of an independent investigation, he said, adding that “we are doing are our utmost best to rebuild trust and prevent this from happening again.”
Nikkei rises 19% in 2024, highest year-end finish on record
Japan’s blue-chip stock index has ended the year at its highest year-end finish on record, despite a small selloff today.
The Nikkei stock average ended down 386.62 points, or almost 1%, today at 39,894 points.
For the year, it gained 19%, as a weaker yen supported exporters.
Kazuo Kamitani, a strategist in the Investment Content Department of Nomura Securities Co, says:
“There was much optimism in the first half of the year with hope for a favorable cycle in which wages increase in tandem with prices, alongside the weak yen for corporate profits.”
2024 was an eventful year for Japanese investors – on one day in August, the Nikkei 225 plunged 12% in its biggest decline since the Black Monday crash of 1987. That was followed by a 10% surge the next day.
Profits halve at hedge fund Theleme
Theleme Partners, the hedge fund where the former prime minister Rishi Sunak was a founding partner, has suffered a sharp drop in performance fees, resulting in annual profits halving.
Profit fell to £32m in the year to 31 March from £64.7m the year before, according to accounts filed with Companies House. Performance fees declined to £14.9m from £45.9m, while management fees fell to £322.9m from £24.7m.
Last year Sunak came after fire for his links with the hedge fund, which earned big returns from its investment in the US vaccine maker Moderna. Moderna’s fortunes were transformed by its Covid-19 jab, and it went from a lossmaking to a profitable company.
Sunak co-founded Theleme in 2009 but quit to join politics in 2013.
The hedge fund’s profits more than doubled to £109m in the year to 31 March 2022, thanks to its investment in Moderna, which signed a 10-year partnership with the UK government in June of that year.
Under the £1bn deal, it committed to build a major research and manufacturing centre for mRNA vaccines against new Covid variants and other respiratory illnesses, in an effort to improve readiness for future pandemics. The centre is being built in Harwell.
Updated
House prices in prime central London have dropped this year, estate agent Savills reports, as wealthy buyers were scared off by October’s budget.
Savills reports that average prices across prime central London dropped by 0.8% in the last three months. That included a 2% drop in Knightsbridge, a 1.6% fall in South Kensington and a 1.5% decline in Belgravia, as areas with the highest concentrations of wealth, and a more international buyer base, were hit by the budget.
Over the last year, values in prime central London have dropped by -1.9%, Savills reports, while they rose by 1.4% in “outer prime London” during 2024.
Lucian Cook, head of residential research at Savills, says:
“The cautious mentality that we observed ahead of this summer’s general election and the Autumn Budget has persisted across prime markets as the year draws to a close, although properties continue to sell where they are priced competitively.
“Generally, needs-based buyers have underpinned market activity post-Budget, as they have benefited from relatively stable mortgage rates and the prospect of further base rate cuts in 2025. As a result, these sub-markets have been the strongest performers in London.
“However, prime central London locations remain the most price sensitive, as buyers and sellers adjust to the winding down of the ‘non-doms’ tax regime and the new SDLT surcharge for second home purchases. We expect market conditions to remain challenging in central London next year as the impact of these changes continues to be felt.”
2,074 pubs lost in the last five years
Here’s a chart from Altus Group, showing how the number of pubs in England and Wales has fallen steadily over the last five years.
Pubs which have ‘vanished’ from the communities that they once served have either been demolished or converted into other types of use such as homes, offices or even day nurseries with a total of 2,074 being lost for good in just the last 5 years, Altus say.
European Central Bank Governing Council member Klaas Knot has predicted that China may start selling its products to Europe at discounted rates if the US starts a trade war by imposing new tariffs on imports.
In an interview published in Dutch newspaper Volkskrant, Knot says:
“There is a chance that the Chinese will start offering their goods in Europe at lower and lower prices.
“We are already seeing that happening in the steel market.
In this way, China is, as it were, exporting its deflation to us.”
Nearly 170,000 UK shop workers lost their jobs in 2024
2024 was also a tough year in the UK retail sector, where nearly 170,000 UK shop workers lost their jobs in the last year.
The collapse of big chains such as Homebase and The Body Shop put thousands of jobs at risk and contributed to 169,395 retail jobs disappearing during 2024 – a 42% rise on 2023 levels, new data shows.
European stock markets have opened in the red, on the final full trading day of the year.
In London, the FTSE 100 index has dipped by 32 points, or 0.4%, to 8115.
Germany’s DAX dropped 0.5%, while France’s CAC was 0.3% lower.
Mexico left with 500m-litre tequila lake after demand slows
In other alcohol-related news, Mexico has a 500m-litre tequila lake as demand for the spirit has ebbed.
The Financial Times reports this morning that Mexico is sitting on more than half a billion litres of tequila in inventory, which is nearly a whole year’s production.
Data shows that around one-sixth of the 599mn litres of tequila produced last year is unsold, sitting alongside the 525mn litres that Mexico already had in inventory at the end of 2023.
This growing tequila lake is due to an ebbing of the pandemic spirits boom in the US, as consumers cut back on their drinking.
Bernstein analyst Trevor Stirling says:
“Much more new spirit is being distilled than is being sold, and inventories are starting to accumulate.
“The tequila industry is set for a very turbulent 2025.”
Some of the inventory is in the process of being aged – but distillers also run the risk that Donald Trump imposes new tariffs on Mexico, making it harder to sell tequila to the US market.
The drinks industry is urging the government to ease the load on publicans, following this latest drop in pub numbers.
Emma McClarkin, chief executive of the British Beer and Pub Association, says:
“Brewers and pubs pour billions into the economy and support more than a million jobs, so we know that closures can have a disastrous impact for both the nation’s coffers and the job market.
“For the sector to remain a stalwart of the economy and continue to be the beating heart of our communities, the Government must swiftly deliver permanent and meaningful business rate reforms.
“We stand ready to help the Government bring in sorely-needed change that will break down the barriers that stop our sector from contributing even more to the economy and employing more people than ever before.”
Introduction: Number of pubs in England and Wales dipped below 39,000 this year
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The number of pubs in England and Wales has fallen again, as the trend of public houses disappearing from local communities accelerated in 2024.
Altus Group, the commercial real estate company, reports this morning that 412 pubs were demolished or converted for other uses over the last year. That pulls the number of pubs in operation across England and Wales down to 38,989, below 39,000 for the first time.
Pub owners have warned that rising costs, and changes to the alcohol excise duty system, have made it harder to keep operating, while the rising price of a pint has also led to pub closures.
The sector also fears a hangover from October’s budget in 2025. Altus Group’s Alex Probyn says:
“Many publicans that I speak to are extremely worried that this could be their last Christmas given the combination of hiking the amount employers will have to pay in National Insurance, increases to the minimum wage and the business rates discount being slashed from 75% to 40% in 2025.
The leisure industry was also badly hit by the Covid-19 pandemic, leading to a sharp drop in the number of nightclubs in operation – down from 1,700 in 2013 to just 787 by June this year.
The agenda
3pm GMT: US pending home sales for November
3.30pm GMT: Dallas Fed Manufacturing Index
