FTSE 100 Drops, US Stocks Rise Amid Data Expectations

The FTSE 100 (^FTSE) dipped and European indices were mixed by the closing bell, with US stocks heading higher even as a slowdown in retail sales figures led out a flood of crucial data highlighted by the monthly jobs report due to come on Wednesday.

Retail sales figures gave a downtrodden read on the US economy, as consumer spending on the month remained “virtually unchanged” from the month prior. The flatlining sales data signals a slowdown in spending through the end of the holiday season from November’s month-on-month growth of 0.6% and fell well below economist expectations.

The consumer data lays the ground for Wednesday’s all-important January jobs report, in high focus following last week’s signs of softening in the labour market. The latest consumer price index reading is then due on Friday to give a look at inflation pressures.

Meanwhile in the UK, bond markets calmed as Keir Starmer fended off the biggest challenge to his premiership yet. After holding In a meeting of the political cabinet – without civil servants – on Tuesday, the PM insisted his top team was “strong and united” after ministers rallied around him with public messages of support following another day of turmoil.

Starmer has faced the ire of his MPs over the previous weeks as questions swirl over his appointment of Peter Mandelson as UK ambassador to the US, even as Mandelson’s links to now deceased sex offender Jeffrey Epstein were known.

Those questions intensified after the release of millions of documents in the Epstein files. Some of these revealed that Mandelson had used his position as de facto deputy to Gordon Brown to pass sensitive and potentially market moving information to Epstein. They also revealed money paid by Epstein to Mandelson and his partner.

Both Starmer’s director of communications Tim Allan and chief of staff Morgan McSweeney quit over the past few days to make way for new leadership. McSweeney took responsibility for the appointment of Mandelson.

“Every fight I’ve been in, I have won,” the prime minister reportedly told his MPs on Monday night. After holding a cabinet meeting on Tuesday morning, Starmer remained defiant and hit out at Labour infighting, insisting he would “never walk away from the country that I love”.

• The FTSE 100 (^FTSE) was 0.3% lower by the closing bell. Coca-Cola (CCH.L) and Croda International (CRDA.L) led the index while Standard Chartered (STAN.L) and BP (BP.L) sold off.

• The more domestically focused FTSE 250 (^FTMC) moved 0.6% higher.

• Over in Germany, the DAX (^GDAXI) lost 0.1%.

• France’s CAC 40 (^FCHI) rose 0.1%. Luxury fashion conglomerate Kering (KER.PA) led gains in Paris, adding as much as 11% after its latest set of quarterly results.

• The pan-European STOXX 600 (^STOXX) fell slightly.

• The pound was 0.2% lower against the dollar (GBPUSD=X), trading beneath the $1.37 mark.

• Across the pond, the blue chip-heavy Dow Jones Industrial Average (^DJI) led the way up, rising around 0.4%. The S&P 500 (^GSPC) hovered five points higher and the Nasdaq Composite (^IXIC) reversed earlier losses to trade just above the flatline.