Falling US consumer confidence and weak housing data fuel recession fears - as it happened
Rolling coverage of the latest economic and financial news, including weaker-than-expected housing data from Britain and America
Earlier:
- Plumbing firm Ferguson in profits warning
- German consumer confidence fell this month
- Markets gripped by recession worries
8.07pm GMT
That's all for today. A quick recap:
US consumer confidence has dropped unexpectedly, raising concerns that America's economy is slowing.
8.06pm GMT
Wall Street has closed higher tonight, following Europe's lead.
7.53pm GMT
Marketwatch has a worrying report tonight, about the rise in evictions in America -- with some being used by predatory landlords to accrue more fees.
They report:
Nearly half of Americans are "rent-burdened," which means that they spend more than 30% of their income on rent. Homelessness is on the rise. Nationally, as many as one in seven children may have experienced eviction in the last decade.
And, just as the foreclosure crisis disproportionately hit African-Americans, so does the eviction epidemic. Black women in Milwaukee, for example, were evicted at a rate three times their share of the population, and black renters in metro Seattle were evicted four times as frequently as whites there, according to earlier research....
7.02pm GMT
Our latest Brexit dashboard, tracking the health of the UK economy each month, is live.
And it shows that...
MPs are entering the crunch phase of the Brexit process against a backdrop of better news from the British economy, despite growing alarm over the political deadlock and the lingering risk of a no-deal departure from the European Union, according to the latest Guardian analysis.
The Guardian's monthly tracker of economic news showed employment reaching the highest levels on record and consumers continuing to spend on the high street, even as Britain's departure from the EU looms.....
Related: UK employment at a record high even as Brexit crisis deepens
6.41pm GMT
European stock markets have ended the day in the green, but it's not much of a rally.
The FTSE 100 gained 18 points to 7196, after two days of losses. Germany's DAX gained 0.6%.
6.39pm GMT
Howard Archer of EY Item Club cautions that Britain's housing market is still fragile, even though mortgage lending wasn't has weak as feared.
He writes:
UK Finance have reported that the mortgage approvals data they released this morning were incorrect and have released revised data that show the drop in mortgage approvals for house purchases in February was much less marked than had been originally indicated.
Obviously this suggest that Brexit uncertainties had less of a negative impact on housing market activity in February than had first seemed to be the case.
5.13pm GMT
Newsflash: Britain's housing market is NOT as weak as we reported this morning.
UK Finance have just revised their earlier figures, having spotted a mistake in the seasonal adjusted data.
As previously advised, we have identified an anomaly in the seasonally adjusted long-term mortgage data published this morning in our Household Lending update for February 2019. This error has now been corrected: https://t.co/d4tEGwV2Ko
4.50pm GMT
John Higgins of Capital Economics has a warning for investors - the US stock market is heading for a fall.
He predicts that the rally seen since late December will fizzle out, as traders realise growth is slowing, and that America's central bankers (the FOMC) can't keep the economy afloat.
The sell-off in the S&P 500 late last week may have just reflected a short-lived bout of profit-taking after a strong run. Indeed, the index has begun to rise again this week. Nonetheless, we think that it may be dawning on investors that the FOMC won't be able to shore up the economy very easily.
Last autumn's slump in the S&P 500 was triggered by emerging concerns about the future health of the economy in the US, while demand in the rest of the world was weak. Although the incoming data in the US were generally still upbeat, investors began to worry that the FOMC would soon kill off the recovery if it tightened policy much more. So they sent the Committee, which at the time was still signalling the need for further rises in interest rates, a message not to overdo it: during this period, they all but factored out more hikes.
This is because we think that the economy will struggle throughout this year and next, even as the FOMC ends up cutting rates by more than investors are now discounting in 2020. If we are right, the resilience of the stock market is unlikely to last and expectations for corporate earnings will probably be revised down much more heavily than they have been so far. This is largely why we are sticking to our view that the S&P 500 will end this year at 2,300, which is nearly 20% below its level now.
Finally, the rebound in the S&P 500 so far in 2019 has been almost the mirror image of the sell-off last autumn across most sectors. Only real estate and utilities (on the upside) and energy (on the downside) have bucked the trend.
3.44pm GMT
Despite the steady drip of poor economic data, and weak company results, US and European stock markets are both rallying.
The FTSE 100 is up around 0.35% as the final hour of trading ticks on.
Global equities rebounded from the four day sell off, surging higher on Tuesday.
A recovery in US treasury yields, combined with the possibility of a positive conclusion for Brexit and US - Sino trade negotiations has encouraged investors to take a more optimistic outlook on the economy; pushing recession fears back.
2.59pm GMT
Several economists and analysts fear that the fall in US consumer confidence may show America's economy is weakening.
Mar Conference Board consumer confidence fell to 124.1, from 131.4 in Feb (well < 132.5 consensus) & nearly back to Jan's low of 121.7; expectations component fell to 99.8 from 103.8 & present situation fell to 160.6 from 172.8; net % saying jobs plentiful fell to 28.3 from 34.0 pic.twitter.com/SfuSRgVPAg
The pullback in current conditions of the Conference Board Consumer Confidence Survey is significant. The current conditions is an excellent coincident/leading indicator and the peak has presaged recessions by 2-14 months.
This is worrisome. Pretty big drop in the % of consumers who say that jobs are plentiful https://t.co/mBUCejmuOi pic.twitter.com/ahAp0ZbVC8
2.59pm GMT
Lynn Franco, senior director of economic indicators at the Conference Board, says stock market volatility, weak jobs data and the Federal government shutdown have all hit consumer confidence.
She explains:
"Confidence has been somewhat volatile over the past few months, as consumers have had to weather volatility in the financial markets, a partial government shutdown and a very weak February jobs report.
The overall trend in confidence has been softening since last summer, pointing to a moderation in economic growth."
2.28pm GMT
Newsflash: US consumer confidence has fallen, adding to the flurry of negative economic data of late.
The Confidence Board's index of American consumer morale has slipped sharply this month, to 124.1, from 131.4 in February, dashing hopes of a rise to 132.
US #ConsumerConfidence Index declined in March, after increasing in February. The Index declined seven points; outlook remains positive, but confidence trend softening #consumers pic.twitter.com/9l2sTtKLdB
US consumer confidence misses the forecasts at 124.1 vs. 132.0. Weaker consumer confidence equals less spending, weaker #economy and lastly a #recession. High consumer confidence (which the #US still enjoys) is closely related to business cycle tops. Everything is cyclical. pic.twitter.com/V5GMlqIqt4
2.12pm GMT
We have our FOURTH profits warning of the day.
"Booking trends achieved during wave season rivaled last years' historical highs and were consistent with the demand trends we experienced going into the year, building further confidence in our full year guidance.
For our North America and Australia brands, our booked position is ahead of the prior year at higher prices while our Europe and Asia brands are well ahead of the prior year at lower prices.
1.36pm GMT
Wall Street has opened higher, as investors try to put recent losses behind them.
1.13pm GMT
Some reaction to the sharp fall in US house-building last month:
Construction on new homes in the U.S. (housing starts) hit an 11-year peak in May 2018, but builders have pulled back since then. The industry might not help the economy much in 2019 or alleviate a housing shortage. https://t.co/9BvTo7L2T5 pic.twitter.com/uplu3spe84
US housing starts continued to weaken in Feb, falling more than forecast https://t.co/TDgHzGaLCH As expected, the annual trend decelerated to -9.9%, the lowest since Sep 2016 https://t.co/KkbTGx7gib The news offers new support for expecting the economic slowdown to continue. pic.twitter.com/bQLr840QOZ
1.10pm GMT
Heads-up. UK Finance have now said that some of the mortgage and credit data released this morning is incorrect. We should have updated figures soon #developing
Uh oh.....
UK Finance says lending data wrong, to give correct figures soon https://t.co/rsdrat1ZEI
12.44pm GMT
Newsflash: America's housing market also appears to have weakened.
The number of construction projects to build new US homes slumped by 8.7% last month, to its lowest rate in more than 18 months, the Commerce Department says.
Housing Starts Decreased to 1.162 Million Annual Rate in Februaryhttps://t.co/axTDAXvjp8 pic.twitter.com/kWnDLI517J
Wow! Historic miss on housing starts. pic.twitter.com/DrMjcsBaU7
12.22pm GMT
The pound is shaking off its earlier losses, and pushing higher as some Brexiteer MPs suggest they could back Theresa May's Withdrawal Agreement.
Both Jacob Rees-Mogg and Michael Fabricant have said they now believe parliament must choose between May's deal and no Brexit. That's potentially significant, as they both voted against the deal previously.
ERG are moving. Unlikely they would move if there wasn't some indication the DUP are prepared to move. So the focus is soon going to switch to Labour MPs.
Related: Brexit: Government may ignore result of indicative votes process, says Hancock - live news
11.41am GMT
While mortgage approvals fell, credit card lending jumped last month.
"The Conservatives have created an economy with spiralling personal debt, at the same time as wages of those at the top skyrocket.
"With average real wages still below pre-crisis levels, this is clearly an economy working for the few and not the many.
11.14am GMT
Here's a chart showing how the UK housing market stumbled last month, with mortgage approvals and net lending both lower.
11.01am GMT
The slump in UK mortgage approvals highlights the "Brexit malaise gripping the housing market", agrees Bloomberg.
The weaker-than-expected figures underscore the impact Brexit uncertainty is having on the housing market, particularly in London where property prices are falling outright amid the worst slump since the financial crisis a decade ago.
10.50am GMT
Economist Howard Archer of the EY Item Club points out that London and the South East of England is suffering the brunt of the housing slowdown.
Here's his take on February's weak mortgage approvals:
10.23am GMT
Jeremy Leaf, north London estate agent, agrees that political uncertainty is hurting the housing market.
He hopes the UK housing market might pick up when (or if?) we have more clarity on the UK's departure from the EU.
'On the high street, business continues to be tough with only realistic buyers and sellers taking advantage of the situation.
Once the obstacles to Brexit clarity are removed, then we feel further pent-up demand will inevitably be released.'
10.08am GMT
Economists are warning that the UK housing market has slowed, and it's probably going to get worse...
Level of mortgage approvals at lowest since 2013 in Feb, say UK Finance - points to v subdued activity & hence property prices over coming months.
Sharp February slowdown in mortgage approvals suggests heightened #Brexit uncertainties took increased toll on #UK housing market. Unsecured #consumer credit growth also slowed. UK #banks approve fewest #mortgages in six years as Brexit nears - UK Finance https://t.co/ih3W9yxla9
Mortgage approvals by the main banks slumped in Feb to the lowest level since April 2013, and look set to carry on falling, given that RICS reported buyer enquiries fell in Feb at the fastest rate since May 2008. But still no sign of a wider downturn in consumers' spending pic.twitter.com/tMINzrwL3M
9.56am GMT
In another sign of weakness, UK mortgage lending growth has hit a near-three low.
Net mortgge lending rose by 711m in February, down from 801m in January.
9.45am GMT
The surprise fall in UK mortgage approvals has hit the pound, sending sterling down almost half a cent to $1.316.
#UK Feb 2019 #mortgage approvals 35.K vs 39.6K prior.: $GBP on the slide this morning, more due to the lack of positive news for the "hope" buyers than anything worse hitting the wires. Cable 1.3165 from 1.3200.
9.44am GMT
Newsflash: UK mortgage approvals have fallen to their lowest level in almost six years.
Just 35,299 new loans for houser purchases were agreed in February, according to new figures from industry body UK Finance.
9.30am GMT
High end TV and stereo maker Bang & Olufsen is also under the cosh today.
Shares in the luxury Danish consumer electronics maker have plunged by over 20% this morning, after it issued its second sale warning this year.
Troubles at Danish luxury stereo and TV maker Bang & Olufsen @Reuters https://t.co/ynwNWj3HlC
8.39am GMT
Another profits warning! This time from Ferguson, the FTSE 100 plumbing and heating equipment supplier.
Ferguson has warned shareholders that market conditions have deteriorated recently, hitting earnings, so profits will be at the lower end of expectations.
8.30am GMT
Online grocery chain Ocado is bucking the gloom.
8.26am GMT
With little good news this morning, it's no surprise that European stock markets are flat in early trading.
The UK's FTSE 100, the German DAX and the French CAC are all becalmed are investors ponder the health of the eurozone economy.
8.20am GMT
South Korean tech firm Samsung has stunned traders overnight with a surprise profit warning, due to a slide in memory chip prices.
"The company expects the scope of price declines in main memory chip products to be larger than expected."
Samsung Profit Warning Is Tech's Inverted Yield Curve - Bloomberg
*A downturn sparked by excess inventories and weakened demand, signs of which were evident back in August, could drag on longer than expected.
*Link: https://t.co/hIzajrOcps pic.twitter.com/IdJphycdPq
8.11am GMT
Not only Germany. Business morale falls also in France, as the Business Survey fell in March to 102 from previous 103 and less than expected 103, the lowest since Nov 2016. With these data, the probability of a rebound of Eurozone economy in 1Q decreases a lot @graemewearden
8.10am GMT
More eurozone gloom! French industrial confidence has fallen to its lowest level in almost two and a half years.
Business confidence plunged in December after a series of protests over the high cost of living turned violent, sparking some of the worst rioting and vandalism in decades during the peak pre-holiday shopping season.
While confidence in the dominant service sector was stable in March, it rebounded in the wholesale industry and was unchanged in retail.
8.00am GMT
This drop in German consumer confidence is particularly disappointing, as we learned yesterday that business leaders were more optimistic.
Here's some early reaction:
German consumer confidence takes a (small) hit on the back of lower growth expectations and 'willingness to buy'. The latter still healthy but down to a 27-month low. pic.twitter.com/Dy0wruCXuO
Oops! GfK German Consumer Confidence unexpectedly drops to 10.4 in Apr vs 10.8 expected despite record low unemployment rate and decent wage growth. BUT still at elevated levels. pic.twitter.com/onl46IhvJX
7.56am GMT
Newsflash: German consumer confidence has taken a knock, adding to concerns that the eurozone economy is struggling.
Whilst consumers are certainly not assuming that Germany will fall into recession this year, they do see a noticeable cooling off of economic activity.
The lack of decisiveness regarding the nature and date of the UK's exit from the EU, as well as the growing trade conflict between the EU and USA are clearly creating ever more uncertainty among consumers. Barriers to trade, such as increases in customs duties, are currently creating a burden for German exports.
7.41am GMT
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Global stock markets continue to be gripped by anxiety that we could be heading towards a recession.
European Opening Calls From IG:#FTSE 7193 +0.22%#DAX 11371 +0.21%#CAC 5269 +0.15%#MIB 21096 +0.17%#IBEX 9181 +0.01%
Investors are aware the US economy is in rude health, and growth is tipped to cool in 2019, but at the same time they don't want to ignore the moves in yield curve inversion as it been a reliable recession indicator.
Investors in equities and credit should rightly be worried. UST yield curve, as measured by the difference b/w a 3m bill and 10y UST, has turned neg, or inverted, for the 1st time since 2007, chart @michaellachlan @FT https://t.co/DXSd1oKF9X pic.twitter.com/q15m5oJIpV
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