• FTSE 100 finishes 12 points ahead
• Glencore boosted by sale and broker buy
• Halfords goes into reverse

4.45pm: FTSE 100 finishes ahead

At the close, the UK’s blue chip index reached 7,465 points for a 0.2% gain on the day.

Earlier in the day, PMI data out of Europe’s largest economies improved somewhat, noted Fawad Razaqzada at StoneX. “But let’s not get too excited because they rose from a very low base and in any case still remain in the contraction territory, which is hardly any reason to be cheerful,” the analyst cautioned.

“(I) will repeat. Although equity markets have shrugged the PMI numbers off for now, I can’t imagine investors will continue to take excessive risk heading into a potential recession. The global economy faces a bumpy road ahead. The bears are ready to pounce, but are in need of a technical “sell” signal.”

3.45pm: Footsie clinging on to its gains

Heading into the close, leading shares are managing to stay in positive territory, but it is no means convincing after the weak UK purchasing managers figures confirmed recession was looming.

The FTSE 100 is off its best levels, up just 10.59 points or 0.14% at 7463.43 having earlier been as high as 7498.

Michael Hewson, chief market analyst at CMC Markets UK, said: “Having got off to an initially positive start, with the FTSE 100 getting to within touching distance of 7,500, it’s been a fairly lacklustre session as investors weigh up the release of tonight’s FOMC minutes against a backdrop of a weakening economic outlook, after PMIs all pointed to further economic weakness in the fourth quarter.

“It also tees up the possibility that this might lead central banks to hold back from hiking as aggressively as previously thought.”

Intermediate Capital Group (LSE:ICP) is leading the way, up 3.85% at 1201.5p after Credit Suisse issued an outperform rating and raised its target price from 1320p to 1470p.

But commodity companies which had provided earlier support have mainly drifted lower.

In particular the oil giants are weaker as the G7 reportedly plans a US$65-US$70 a barrel price cap on sea-borne Russian oil, which has seen Brent crude drop 4.05% to US$84.78.

So Shell PLC (LSE:SHEL, NYSE:SHEL) is down 1.45% and BP PLC (LSE:BP.) has lost 0.74%.

Harbour Energy PLC (LSE:HBR), in danger of losing its place in the blue chip index at this month’s reshuffle, has fallen 1.56%.

Among the miners one company to hold on to its gains is Glencore PLC (LSE:GLEN), up 3.15% after a disposal and positive broker note.

Elsewhere pharmaceutical companies are under pressure with GSK PLC (LSE:GSK, NYSE:GSK) down 1.92% and AstraZeneca PLC (LSE:AZN) off 0.67%.

3.08pm: US home sales beat forecasts

On the other hand, US home sales have come in sharply higher than expected for October, with a month on month rise rather than a fall.

US New Home Sales Change Oct: 632K (est 570K; prev R 588K)
– New Home Sales (M/M) Oct: 7.5% (est -5.5%; prev R -11.0%)
– Median Sale Price (Y/Y) (USD): 493.0K or +15.4% (prev 470.6K Or +13.9%)

— LiveSquawk (@LiveSquawk) November 23, 2022

2.57pm: US business conditions worsened in November – S&P Global PMIs

Signs of weakness in the US economy from the latest PMIs, which could help convince the Federal Reserve to become less hawkish on interest rate rises as recession looms and inflationary pressures ease.

The headline S&P Global flash composite PMI for November came in at 46.3, down from 48.2 in the previous month.

S&P said November saw a solid contraction in business activity across the US private secto, the sharpest since August and among the quickest since 2009.

Lower output was seen across both manufacturing and service sectors amid increasingly steep downturns in demand. The overall fall in activity was the second-fastest since May 2020 as inflation, rising borrowing costs and economic uncertainty weighed on demand.

Chris Williamson, chief business economist at S&P Global Market Intelligence said: “Business conditions across the US worsened in November, according to the preliminary PMI survey findings, with output and demand falling at increased rates, consistent with the economy contracting at an annualised rate of 1%.

“Companies are reporting increasing headwinds from the rising cost of living, tightening financial conditions – notably higher borrowing costs – and weakened demand across both home and export markets.

“Skill shortages also remain a worrying constraint on expansion, but there is better news on supply chains, with supplier performance improving in November for the first time for over three years.

“While the reduced supply chain stress is partly a symptom of lower demand, the alleviation of supply delays removes a key driver of inflationary pressures and has helped moderate the overall rate of input cost inflation to a near two-year low. November even saw increasing numbers of suppliers, factories and service providers offering discounts to help boost flagging sales. Hiring has also slowed to a crawl so far in the fourth quarter as firms focus on reducing costs.

“In this environment, inflationary pressures should continue to cool in the months ahead, potentially markedly, but the economy meanwhile continues to head deeper into a likely recession.”

2.42pm: US markets cautious ahead of Fed minutes

US stocks have opened largely unchanged, the last full trading day this week ahead of the Thanksgiving long weekend.

Just after the market opened, the Dow Jones Industrial Average had added 26 points at 34,124 points, the S&P 500 was flat at 4,004 points, and the Nasdaq Composite was up 7 points at 11,182 points.

Forex.com market analyst Joshua Warner noted that stocks were trading cautiously higher this morning as markets were awaiting the release of the minutes from the Federal Reserve’s last meeting to gauge how the central bank might act at its next meeting in December.

“The minutes will reveal how individual members feel about interest rates and the pace they want to see them rise going forward,” he said. “Markets are currently pricing-in a 75% chance that the Fed will slow its next rate rise to 50bps, with a 25% chance for another 75bps hike, according to the CME FedWatch Tool.”

2.28pm: Shell and BP slip as crude price falls

Oil prices have gone into reverse after early gains, as investors weighed up talk of a G7 plan to cap Russian sea-borne oil at US$65-US$70 a barrel.

The move is part of the sanctions aimed at cutting the country’s revenues from its oil exports.

Ambassadors from the 27 EU countries are discussing the G7 proposal and hope to reach a decision today, but there seems to be disagreement on what the exact price cap should be.

An EU diplomat told Reuters: “The G7 is apparently looking at a US$65-US$70 per barrel bandwidth.

“Poland, Lithuania and Estonia consider this too high because they want the price set at the cost of production, while Cyprus, Greece and Malta find it too low, because of the risk of more deflagging of their vessels, which might mean the G7 has found a good middle ground.”

Brent crude is down 3.44% at US$85.32 while West Texas Intermediate is off 3.4% at US$78.04.

This has helped push Shell PLC (LSE:SHEL, NYSE:SHEL) down 1.22% and BP PLC (LSE:BP.) 0.38% lower.

Overall the FTSE 100 remains in positive territory, but not as much as it was.

The blue chip index is up 12.34 points or 0.17% at 7465.18, down from the day’s high of 7498.

1.38pm: US weekly jobless claims higher than expected

Over in the US, durable goods orders have come in higher than expected but so have weekly jobless claims.

Orders for longer lasting items rose by 1% last month, compared to expectations of a 0.4% increase.

US Durable Goods Orders Oct P: 1.0% (est 0.4%; prev 0.4%)
– US Durables Ex Transportation Oct P: 0.5% (est 0.0%; prev -0.5%)

— LiveSquawk (@LiveSquawk) November 23, 2022

Bur the number of Americans seeking unemployment benefit for the first time was 240,000 last week.

This is up from 223,000 the previous week, itself revised up by 1,000.

Analysts had been expecting a rise, but only to 225,000.

12.40pm: Investors bet on gaming shares

Gambling shares are on the move, perhaps because some of the favourites in the World Cup have been losing (looking at you, Argentina).

Paddypower owner Flutter Entertainment PLC (LSE:FLTR) is up 3.42% while Entain PLC (LSE:ENT) – whose brands include Ladbrokes and Coral – has added 2.53%.

The latter said its Entain CEE subsidiary – a partnership with investment firm EMMA Capital – had completed the €920mln acquisition of the SuperSport Group, a gaming and sportsbook operator in Croatia.

Entain chief executive Jette Nygaard-Anderson said: “SuperSport expands our operations into the highly attractive and regulated Croatian market, as well as establishing Entain CEE as a strategic growth platform into the wider region.”

11.58am: Mid-cap index now virtually flat

Speaking of flat markets, the mid-cap FTSE 250 has recovered ground and is now virtually unchanged, down just 4.54 points at 19,17.83.

It has been helped by a positive response to results from discoverIE Group PLC (LSE:DSCV), up 4.71%, and Britvic PLC (LSE:BVIC), 3.12% better.

But Pets at Home Group PLC (LSE:PETS) is down 3.68% following its figures.

“Just like all retailers now, Pets at Home is exposed to rising costs and a customer base whose budgets are increasingly squeezed,” said AJ Bell investment director Russ Mould. “Those pressures are reflected in a first half fall in profit.

“Britons may prioritise their pets when it comes to spending, but when they go into a Pets at Home store, they might just be buying the basics these days rather than extras like a new dog toy.”

But the biggest faller is property group Home Reit, down 29.59% after a report from a Delaware-based firm which the company said was inaccurate.

It said: “The report was published without any engagement with the company’s board, investment advisor, or wider advisory team. It is the board’s belief that the report is inaccurate and misleading in its comments about the company, being based on mistaken assumptions, misinformed comments, and disputable allegations.

“The company will publish a full and detailed response demonstrating the factual inaccuracies and selective use of information in due course. This will be published via RNS and on the company’s website as soon as reasonably practicable.”

11.46am: US investors await minutes from Federal Reserve meeting and look forward to Thanksgiving break

US stocks are expected to open flat to higher ahead of the release of minutes from the Federal Reserve’s rate-setting deliberations earlier this month when it lifted interest rates by another 75 basis points, with more interest on the pending Thanksgiving holiday.

Futures for the Dow Jones Industrial Average were up 0.1% in pre-market trading, while those for the S&P 500 were also 0.1% higher, while contracts for the Nasdaq-100 were flat.

James Hughes, chief market analyst at scopemarkets.com said the minutes could yet prove pivotal if there is clear messaging within them as to just how much further rates will go up.

US rate-setters have delivered four consecutive interest rate increases of 75 basis points this year as they try to rein in runaway inflation.

Investors will be hoping that with key indicators of inflation starting to ease, rate-setters may be starting to consider scaling back on future interest rate increases.

The focus will also fall on US new home sales figures for October due ahead of the minutes.

“Again any suggestion that this is running hot despite rising interest rates will again suggest there’s more that needs to be done in terms of limiting inflationary pressures. Earnings news is also looking depressed ahead of the long weekend,” noted Hughes.

Weekly jobless claims are also due, a day early because of the Thanksgiving holiday.

Elsewhere, a surge in the number of COVID-19 infections in China and the threat of lockdowns in the world’s most populous country are keeping investors wary about slowing global economic activity although US stocks rose sharply on Tuesday in spite of this.

“Once again it was optimism that the Fed’s monetary policy tightening exercise may be coming to a close that drove Wall Street higher during Tuesday’s session, although renewed concerns over winter COVID lockdowns in China arguably tempered gains,” said Hughes.

“With Wall Street closed on Thursday and only open for a truncated session on Friday, given the overriding air of uncertainty there may be a temptation to de-risk during the day,“ he concluded.

Back in the UK, the FTSE 100 is in a holding pattern, up 21.52 points or 0.29% at 7474.36.

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10.53am: Broker boost for market

Leading shares are off their best but still in positive territory following a mixed picture from the UK purchasing managers indices (better than expected but still pointing to recession).

The FTSE 100 is currently up 29.48 points or 0.4% at 7482.32, having been as high as 7498.

This remains its best level since 13 September, when it reached an intra-day peak of 7514.

Glencore PLC (LSE:GLEN) is still the biggest riser, up 3.88% after a sale and broker buy note.

A host of analyst recommendations are providing support.

Intermediate Capital Group (LSE:ICP) has added 2.85% to 1190p as Credit Suisse issued an outperform rating and raised its target price from 1320p to 1470p.

Whitbread PLC (LSE:WTB) has been lifted 2.4% by a JP Morgan note, while Compass Group PLC (LSE:CPG) has climbed 1.74% on the back of comments from Kepler Cheuvreux and Goldman Sachs (NYSE:GS).

Severn Trent PLC (LSE:SVT) is 1.94% better as Bank of America moved its rating from underperform to neutral, while peer United Utilities Group PLC (LSE:UU.) has reversed an early fall following its results and is now up 1.06%.

10.25am: Depth of UK contraction is stark – analyst

Despite some positive signs in the UK PMI data, the overall picture is pretty bleak, according to Simon Harvey, head of FX Analysis at Monex Europe.

He said: “Signs of a faster slowdown in UK economic conditions ahead were littered across the overall report. For example, volumes of new work decreased for the fourth month in a row and the rate of decline accelerated to its fastest since January 2021….

“Overall, today’s PMIs reinforce that the UK economy is already in recession. This has also been confirmed by the OBR and Bank of England.

“However, the depth of the contraction as suggested by the PMIs for November is stark; data thus far suggests that the contraction in the fourth quarter is the steepest since the height of the financial crisis when excluding pandemic months.

“Additionally, forward-looking indicators suggest that the pace of the contraction is only set to accelerate in the early quarters of 2023. Today’s PMIs thus paint a fairly bleak investment outlook for UK assets. Since the BoE’s recession warnings in September, however, this has largely been accounted for in FX markets, which look to be trading on the improved global risk conditions over the past 36 hours and the slight beat in the PMI data relative to expectations.”

Indeed the pound is up 0.16% against the dollar at US$1.1912, little affected by news Scotland cannot hold another referendum without permission from Westminister, as ruled by the Supreme Court.

9.40am: UK PMIs better than expected but still in contraction

The UK economy continues to head for recession even though it did better than expected in November, according to the latest snapshot of the manufacturing and service sectors.

The S&P Global composite PMI – which comprises both sectors – is still in contraction territory at 48.3, albeit not as bad as the forecast 47.5..

And new orders showed their sharpest fall since January 2021 as cost of living pressures continued to hit the economy.

UK S&P/CIPS Global Manufacturing PMI Nov P: 46.2 (est 45.8; prev 46.2)
– UK S&P/CIPS Global Services PMI Nov P: 48.8 (est 48.0; prev 48.8)
– UK S&P/CIPS Global Composite PMI Nov P: 48.3 (est 47.5; prev 48.2)

— LiveSquawk (@LiveSquawk) November 23, 2022

S&P said UK private sector firms signalled another reduction in business activity during November, which stretched the current period of decline to four months

New orders decreased at the fastest pace for almost two years as squeezed client budgets continued to hit demand in both the manufacturing and service sectors, it said.

On a more positive note, business expectations for the year ahead rebounded from the 30-month low seen in October.

Recession worries and increasingly challenging economic conditions continue, but the recent change in prime minister and cabinet meant there were fewer comments citing domestic political uncertainty.

S&P’s Chris Williamson said: “A further steep fall in business activity in November adds to growing signs that the UK is in recession, with GDP likely to fall for a second consecutive quarter in the closing months of 2022.

“If pandemic lockdown months are excluded, the PMI for the fourth quarter so far is signalling the steepest economic contraction since the height of the global financial crisis in the first quarter of 2009, consistent with the economy contracting at a quarterly rate of 0.4%.

“Forward-looking indicators, notably an increasingly steep drop in demand for goods and services, suggest the downturn will deepen as we head into the new year.

“While the recent change of government has resulted in improved business confidence, the business mood remains among the gloomiest seen over the past quarter century amid the numerous headwinds, which include the cost of living crisis, the Ukraine war, steepening export losses (often linked to Brexit), higher borrowing costs, fiscal tightening and heightened political uncertainty

 “Price pressures meanwhile remain elevated but show further signs of cooling, often linked to weakened demand, which – combined with the growing recession signals – suggest that the Bank of England may start to make less aggressive interest rate hikes in the coming months.”

9.07am: Better news from Eurozone

The Eurozone economy is performing more strongly than expected so far in November, but it is still in contraction territory

The latest S&P Global composite PMI has come in at 47.8, up from 47.3, with the service sector showing a stronger performance than manufacturing.

Eurozone S&P Global Manufacturing PMI Nov P: 47.3 (est 46.0; prev 46.4)
– Eurozone S&P Global Services PMI Nov P: 48.6 (est 48.0; prev 48.6)
– Eurozone S&P Global Composite PMI Nov P: 47.8 (est 47.0; prev 47.3)

— LiveSquawk (@LiveSquawk) November 23, 2022

S&P said that although the rate of decline remained the second strongest since 2013, excluding COVID-19 lockdown months, the intensity of the downturn moderated in response to a reduced rate of loss of new business, fewer supply constraints and a pick-up in business confidence about the year ahead.

Business sentiment nevertheless remained gloomy by historical standards, it added, and demand continued to fall at a steep rate, leading to a pull-back in employment growth during the month.

Chris Williamson, chief business economist at S&P Global Market Intelligence said: “A further fall in business activity in November adds to the chances of the eurozone economy slipping into recession. So far, the data for the fourth quarter are consistent with GDP contracting at a quarterly rate of just over 0.2%.

“However, the November PMI data also bring some tentative good news. In particular, the overall rate of decline has eased compared to October. Most encouragingly, supply constraints are showing signs of easing, with supplier performance even improving in the region’s manufacturing heartland of Germany. Warm weather has also allayed some of the fears over energy shortages in the winter months.

“Price pressures, the recent surge of which has prompted further policy tightening from the ECB, are also now showing signs of cooling, most noticeably in the manufacturing sector. Not only should this help contain the cost of living crisis to some extent, but the brighter inflation outlook should take some pressure off the need for further aggressive policy tightening.”

Earlier came the individual surveys from Germany and France which showed a mixed performance:

???????? A slowdown in inflationary pressure across #Germany helped to alleviate its economic decline in November, as the flash #PMI picked up to 46.4 (Oct: 45.1). That said, demand continued to fall and firms remained downbeat about future activity. Read more: https://t.co/bzZRpCa1SI pic.twitter.com/Erswe750y0

— S&P Global PMI™ (@SPGlobalPMI) November 23, 2022

???????? #France flash #PMI points to the first contraction in the economy since Feb 2021 in November (PMI at 48.8), as services activity weakens and new orders continue to fall. Read more: https://t.co/FyGoD9GQTK pic.twitter.com/qaPia1ZNdJ

— S&P Global PMI™ (@SPGlobalPMI) November 23, 2022

8.45am: Mid-cap index underperforms on domestic UK concerns

The FTSE continues on its positive way but the FTSE 250 is not so fortunate.

The mid-cap index is more focused on the domestic UK economy, and as the OECD suggested yesterday, the outlook does not look too promising.

Analysts are expecting a second quarter of negative growth for the last three months of the year, meaning recession, with the PMI figures later expected to add fuel to that narrative by showing continuing contraction in November.

So while the Footsie is up 30.05 points or 0.4% at 7482.89, the FTSE 250 is off 0.2% at 19,383.12.

Richard Hunter, head of markets at interactive investor, said: ” A marginally positive opening leaves the [FTSE 100] index ahead by 1.2% in the year to date, with its diverse constituents still ticking some boxes for investors with an international view

” Aside from an exposure to the commodity sector and oil in particular, the index has a number of defensive shares with pricing power, resulting in a partly inflation insensitive play. At the same time, there are also blue chips towards the top end of the consumer range, which could provide some defence in the event of recession. Capped with an average dividend yield of 3.7% for the index, there are rather more angles of attack for investors than in some other major markets.

“The same cannot be said for the FTSE 250 index, however, whose fortunes are more closely linked to UK economic prospects. Quite apart from rampant inflation and a rising interest rate environment, it is becoming increasingly difficult to see where strong growth may come from as the country attempts to balance its books. The index has now lost 17% so far this year, with darkening economic clouds continuing to overshadow sentiment.”

8.33am: Glencore leads the way as commodity companies gain ground

Commodity companies are helping to support the market, recovering further from their losses earlier in the week and helped by some positive broker comments.

Glencore PLC (LSE:GLEN) has climbed 3.11% to 530.9p after it agreed to sell its Cobar copper mine in New South Wales, Australia for US$1.1bn and an ongoing 1.5% smelter royalty to Metals Acquisition Corp, a New York-listed special purpose acquisition company.

It has also been lifted by a buy recommendation from Deutsche Bank, which lifted its price target from 500p to 560p.

Antofagasta PLC (LSE:ANTO) has added 1.72% to 1360p, while Anglo American PLC (LSE:AAL) is up 1.42% to 3183p as Deutsche moved from 3400p to 3500p.

Oil companies are also heading higher as Brent crude added 0.86% to US$89.12 a barrel and West Texas Intermediate rose 0.84% to US$81.63.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “Oil prices have nudged higher, as OPEC+ member countries indicate that ongoing production restrictions are set to continue.

“Investors are also weighing up the supply side impact of a G7 plan to cap the price of Russian oil especially given that Russia has indicated it won’t sell crude to nations which support a price limit, adding to worries that fresh shortages could hit the global markets.”

There was also a bigger than forecast drop in US crude inventories last week, showing increasing demand.

So BP PLC (LSE:BP.) is 1.54% better and Shell PLC (LSE:SHEL, NYSE:SHEL) has added 1.4%.

8.12am: Postive start for market but Halfords goes sharply into reverse

Leading shares have opened in the green ahead of the latest snapshot of the economic performance of major economies including the UK and US in November and the Federal Reserve minutes.

The FTSE 100 is up 25.74 or 0.35% at 7478.58.

Investors appear to be shrugging off news of further pandemic restrictions in China where, amongst other developments, Shanghai said that new arrivals would not be allowed to enter public venues for the first five days, and would also be required to take three PCR tests within three days of their arrival.

There are also continuing concerns about the supply of gas to Europe.

Jim Reid at Deutsche Bank said: “Not only did the COVID-19 situation in China take a fresh turn for the worse yesterday, but we also had a fresh round of threats about a cut-off in the remaining flow of Russian gas to Europe.

“Both of these could have significant ramifications for the global economy more broadly, since China plays a critical role in supply chains that could have ramifications for global inflation in the event of further lockdowns, whilst Europe is already facing a critical energy situation this winter.”

Among the movers, United Utilities Group PLC (LSE:UU.) has lost 2.66%  following its figures but Halfords Group PLC (LSE:HFD) is a much bigger loser, down 12% as it warned profits would be at the low end of expectations.

7.04am: Footsie set for positive start

The FTSE 100 is expected to open higher, building on yesterday’s advance, following gains in US and Asian markets and ahead of the release of the Federal Reserve minutes.

Spread betting companies are calling the lead index up by around 16 points ahead of the first snapshots of how the major economies are performing in November.

Michael Hewson chief market analyst at CMC Markets UK said: “As we look ahead to today’s price action and a holiday shortened US trading week, the main focus is set to be on today’s Fed minutes, as well as the latest November flash PMIs.”

The UK S&P Global/CIPS manufacturing PMI is expected to show a further contraction in the sector in November, at a reading of 45.8 points from 46.2 in October.

In the US markets staged a strong rally on Tuesday as a rebound in the oil price and an upbeat sales forecast from Best Buy provided support.

At the close the Dow Jones Industrial Average was up 398 points, or 1.18%, to 34,098, the S&P 500 advanced 54 points, or 1.36%, to 4,004 and the Nasdaq Composite jumped 150 points, or 1.36%, to 11,174.

In London results are due from Halfords PLC, Johnson Matthey PLC (LSE:JMAT), Pets at Home Group PLC (LSE:PETS) and United Utilities amongst others.

Meanwhile the Reserve Bank of New Zealand caught the market on the hop with a 75 basis point interest rate rise to 4.25%, its biggest hike on record as it struggles to contain rising inflation.