Consumer spending, responsible for two-thirds of the American economy, helped push US growth to 2.8% in the second quarter. That means the annualised US growth pace comes in at 2.6%. One of the biggest improvements came from investment in business plant and equipment, up 8.2%. The biggest rise for two years.
However the US growth figures came in more or less at expectations meaning the growth numbers did little to lift the dollar. Which meant more onward thrust for the euro, hitting an intraday high of $1.1763 ($1.1753 at 4.15pm). The pound also kicked higher rising 0.44% to $1.3123 having risen to $1.3135 earlier.
- UK FTSE 100 7,368.37 -1%
- Dow 21,785.26 -0.04%
- S&P 500 2,467.50 -0.32%
- Nasdaq 6,360.39 -0.34%
- Nikkei 225 19,959 84 -0.60%
- DAX 12,141.99 -0.57%
- CAC 40 5,117.13 -1.35%
- Gold 1,272.30 +0.46%
- Oil WTI 49.62 +1.18%
US driving season boosts oil price
Oil prices pushed substantially higher today as the US driving season got underway. At the time of writing (4.30pm) WTI crude was 1.43% higher at $49.74 while Brent crude was more than 2% up at $52.55.
The oil market was also buoyed by new remarks from Goldman Sachs claiming the global oil market will broadly have recovered equilibrium by 2018.
However estimates on when/if the oil price will stabilise or rise are notorious for being off or premature. Earlier in July Goldman said oil prices could dip below $40, citing anxieties about sustained action from OPEC. Analysts from Commerzbank told the BBC this afternoon that “the latest price rise is on a fragile footing”.
Renault and BAT shares take a mauling
Meanwhile global stocks were broadly down with the German Dax falling 0.48% to 12,153. The French CAC 40 fell 1.26% to 5,121 with Renault shares collapsing more than 5.6% as investors worried over the French car giant's ability to maintain earnings (despite a near 60% half-year profits leap, announced this morning).
In London the FTSE 100 was down more than 1% with shares in British American Tobacco falling almost 7% to 4960p following plans from the US Food & Drug Administration (FDA) to slash nicotine in cigarettes. Shares in Philip Morris also fell sharply.
"Tobacco use," said the FDA in a statement, "remains the leading cause of preventable disease and death in the United States, causing more than 480,000 deaths every single year."
It added: "Because nicotine lives at the core of both the problem and the solution to the question of addiction, addressing the addictive levels of nicotine in combustible cigarettes must be part of the FDA’s strategy for addressing the devastating, addiction crisis that is threatening American families."
Imperial Brands shares were also down heavily, slipping 3.79% to 3,315p. There was hard-ish falls for Johnson Matthey and Smurfit Kappa, down 3.65% and 2.6%.
However there was some very modest respite for AstraZeneca shares, up 3.6% to 4481p following their shock slump yesterday on cancer drug trial anxiety – the worst one day price fall since its 1993 formation. The FTSE 250 slipped 151 points with pub player Mitchells & Butlers slumping more than 10% to 242.30p.