Dow Jones and FTSE 100 hit fresh record highs as rally continues – as it happened

All the day’s economic and financial news, as America’s stock market rallies after a strong day in Tokyo

Latest: Footsie continues record runDow smashes through 25,000US companies created 250,000 new jobs last month


Eurozone recovery gathers paceIntroduction: Optimism sends Tokyo shares rallying

9.39pm GMT

A late PS: America’s stock market did indeed end the day at fresh record levels.

Having burst through 25,000 at the open, the Dow Jones industrial average finished at 25,075, up 152 points.

Financial news of the day: Badly-designed U.S. stock measure goes through meaningless big number. Due to maths, the rise from the previous meaningless big number happened faster than many times in the past.

5.34pm GMT

Right, time for a recap.

Global stock markets have romped to fresh all-time highs today as 2018 begins where 2017 left off – with shares rising across the world.

“With the Dow Jones hitting 25,000 for the first time there seems no end in sight to a stock market rally spurred on by much stronger than expected jobs data for December, offering yet further evidence of the strength of the US economy.

Most analysts had expected 190,000 jobs to have been created in the month but 250,000 jobs blew that number apart. Little wonder the Dow Jones soared to a new all time record high soon after.

JUST IN: Shortly after the Dow cracked 25K, President Trump said: “So, I guess our new number is 30,000″ pic.twitter.com/fRzljkPF7V

Related: UK services grow faster than forecast despite growing Brexit concern

5.28pm GMT

According to US reporters, Donald Trump has set the Dow Jones a new target – 30,000 points.

Pres Trump also used remarks at immigration policy photo op to note stock market tops 25,000 DJIA. Notes that it’s happening in just his 11th month (actually it’s his 12th). “So I guess our new number is 30,000.” Says the soaring stock market means jobs. pic.twitter.com/8Se7g4DmFM

5.26pm GMT

Britain’s FTSE 250 index has hit a new closing high (again) too.

The index, which contains smaller companies than the FTSE 100, gained 0.37% today to close at 20,820 points.

5.21pm GMT

Shares in Debenhams ended the day down almost 15%, at 30.34p.

That lowers its market capitalisation to just £370m, from £435m yesterday (according to my calculations anyway).

5.14pm GMT

Healthcare chain NMC Health was the best-performing member of the FTSE 100 today, helping to push it to new heights.

But Marks & Spencer dragged the index back, and was the worst-performing member (blame Debenham’s profit warning).

5.02pm GMT

Boom! Britain’s FTSE 100 has hit a new record closing high, at 7,695.88 points.

The blue-chip index gained 24 points today, sending it over the previous record close – set on the final day of trading last year.

Another record high for FTSE 100 – up 25 points at 7,695.88 pic.twitter.com/I2i1fSCqpC

4.20pm GMT

There are just 10 minutes of the trading day left in Europe, and Britain’s FTSE 100 is on track to hit a new closing high…..

4.05pm GMT

3.55pm GMT

US president Donald Trump has welcomed today’s stock market rally – along with a non-too subtle attempt to take some of the credit:

Dow just crashes through 25,000. Congrats! Big cuts in unnecessary regulations continuing.

3.34pm GMT

Chipmaker Intel is bucking the trend, though, plunging by over 4.5% this morning.

That follows the discovery of a very serious security vulnerability in its processors, which could expose many millions of people to cybercriminals.

The flaws, named Meltdown and Spectre, were discovered by security researchers at Google’s Project Zero in conjunction with academic and industry researchersfrom several countries. Combined they affect virtually every modern computer, including smartphones, tablets and PCs from all vendors and running almost any operating system.

Meltdown is “probably one of the worst CPU bugs ever found”, said Daniel Gruss, one of the researchers at Graz University of Technology who discovered the flaw.

Related: Meltdown and Spectre: ‘worst ever’ CPU bugs affect virtually all computers

3.25pm GMT

The Dow is continuing to hit new heights, and is now up 173 points or 0.7% at 25,097.

Wall Street titans Goldman Sachs and JP Morgan are the biggest risers, both up around 2%, followed by American Express and IBM.

3.04pm GMT

Here’s Associated Press’s take on today’s Wall Street action:

The Dow Jones industrial average traded above 25,000 points for the first time, blasting through another 1,000-point milestone.

The Dow’s latest breakthrough came in early trading Thursday and just five weeks after closing above 24,000 points for the first time.

2.40pm GMT

Update: Get out the Dow 25k hats!

The Dow Jones industrial average has just risen through the 25,000 point mark for the first time ever, as it keeps hitting new highs.

Dow 25K Dow 25K Dow 25K Dow 25K Dow 25K Dow 25K Dow 25K Dow 25K Dow 25K Dow 25K Dow 25K Dow 25K Dow 25K Dow 25K Dow 25K Dow 25K Dow 25K Dow 25K Dow 25K Dow 25K Dow 25K Dow 25K Dow 25K Dow 25K Dow 25K Dow 25K Dow 25K Dow 25K Dow 25K Dow 25K Dow 25K Dow 25K Dow 25K Dow 25K Dow 25K

2.38pm GMT

Boom! America’s stock market has hit a new alltime high at the start of trading.

Although the weather is pretty awful in New York, with temperatures below freezing, the mood on Wall Street is positively fizzling.

2.06pm GMT

Paul Ashworth of Capital Economics is also impressed by today’s US jobs report.

He writes:

That 250,000 ADP gain, up from 185,000 in November, was probably skewed upwards by the recent strength of the official non-farm payrolls figures, however, which are used as one of the inputs. Nevertheless, after the earlier disruption caused by the hurricanes, the labour market clearly ended 2017 with some considerable momentum.

Looking at the ADP details, the gains were broad-based, with the manufacturing sector adding 9,000 jobs and construction adding 16,000. Within the services sector, the 72,000 gain in professional & business services was particularly encouraging, since jobs in that sector tend to be relatively well paid.

1.49pm GMT

Job creation is great, but where is the wage growth, analysts at Danske Bank wonder…..

Strong #US jobs growth in December according to #ADP but what about the missing wage growth, which is puzzling most #FOMC members? Focus on avg. hourly earnings tomorrow when official jobs report is due out $EURUSD $GBPUSD pic.twitter.com/wApn2FBEtL

1.49pm GMT

America’s labor market got a pre-Christmas boost, according to Mark Zandi, chief economist of Moody’s Analytics, (which helps produce the ADP jobs report).

Zandi says:

“The job market ended the year strongly,”

“Robust Christmas sales prompted retailers and delivery services to add to their payrolls. The tight labor market will get even tighter, raising the specter that it will overheat.”

1.33pm GMT

NEWSFLASH: America’s private sector created many more jobs than expected last month, in the latest sign that the US economy is robust.

US companies hired 250,000 new workers in December, according to payroll firm ADP.


US ADP Nonfarm Employment Report Dec 2017 https://t.co/IxnjpiNYGG pic.twitter.com/ieFq42CRXE

1.19pm GMT

Cyprus has begun the year on an optimistic note, reports my colleague Helena Smith.

Cyprus’ statistics service announced that unemployment dropped by an unprecedented 15% last month reinforcing evidence that the euro zone’s most easterly member state is en route to making a remarkable economic recovery following the island’s near financial meltdown in 2013.

“I have no doubt that each and every one of us reasonably feel that hope is rising in our country.”

12.58pm GMT

It’s lunchtime! Now, for the average worker this means a quick scamper to the canteen, sandwich shop or supermarket (unless you’re organised enough to bring your own provisions).

The chief executives of FTSE 100 companies are paid a median average of £3.45m a year, which works out at 120 times the £28,758 collected by full-time UK workers on average.

On an hourly basis the bosses will have earned more in less than three working days than the average employee will pick up this year, leading campaigners to dub the day “Fat Cat Thursday”.

Related: ‘Fat Cat Thursday': top bosses earn workers’ annual salary by lunchtime

12.36pm GMT

German supermarket chain Aldi had a rather better Christmas than poor old Debenhams.

Related: Aldi gives pay rise after UK sales exceed £10bn for first time

“As a nation of shoppers, we’re looking after the pound in our pocket more and more, and with their “specially selected” premium items Aldi is offering the same package as the other big 4 retailers but without the expensive price tag.

“Aldi’s Specialbuys and Super 6 offers continue to make headlines and get customers through their doors and over the festive season their competitive Christmas veg prices made them a huge contender.

11.35am GMT

Debenhams shares are still being thumped by investors.

They’re currently down 16% at just under 30p, down from 35.56p last night.

Today’s fall in the share price of Debenhams (Est. 1778) makes its stock market value one seventh that of posh tonic water firm Fever-Tree (Est. 2004).

10.53am GMT

10.52am GMT

David Madden of CMC Markets:

Debenhams had a disappointing Christmas period and the retailer has issued a profit warning. The retailer cited a ‘volatile and competitive’ market for the drop in sales. Debenhams now predicts that full-year profits will be within the range of £55 million to £65 million, which is a considerable decline on the previous forecast of £83 million. The stock has been in decline for over five years, and if this trend continues it could target 20p.

‘Strong growth for its digital offering has failed to save Debenhams from a miserable end to the year. Customers turned out for Christmas, but refused to put their hands in their pockets in the lead up to the festive period, or indeed the Boxing Day sales.

Debenhams has been forced to cut prices to persuade shoppers to part with their cash, and as a result margins have been squeezed, profits have been significantly downgraded, and the share price has taken a massive hit.

Turns out Next may have given retail sector investors a false sense of security yesterday. Debenhams brought things down to earth with a bump, warning that the fourth quarter of 2017 was bookended by weak trade and that heavy discounting has damaged margins.

10.38am GMT

Related: Business Today: sign up for a morning shot of financial news

10.34am GMT

Getting back to Debenhams…. CEO Sergio Bucher has been speaking to reporters following this morning’s profits warning.

Bucher says that Debenhams will speed up its cost-cutting plans – although it’s not planning to close stores (on top of the 10 already earmarked for closure)

“There will be some jobs that will go – we’ll be creating jobs as well.

That’s what happens when you reorganise teams.”

10.13am GMT

In other news, consumer credit growth in the UK has slowed – perhaps a sign that people are cutting back their spending.

Annual credit growth slowed to 8.5% in the three months to November, new Bank of England figures show, down from 9.3% in the quarter to October.

10.13am GMT

The pick-up in service sector growth in December suggests that Britain has shrugged off its ‘soft patch’ early last year, says Kallum Pickering of Berenberg bank.

But, he still thinks it would have done better without the looming exit from the EU:

The UK economy probably expanded by 1.8% yoy in 2017. While this is below the 2% annual average for the post-Lehman period, it is probably at, or even a little above, what the UK can manage on trend outside of the EU. To be fair, relative to the market’s very depressed growth expectations for 2017 following the Brexit vote in 2016, the UK did much better than expected last year.

That is, however, not to say that Brexit did not hurt. Growth in the US and the Eurozone, the UK’s major trading partners, accelerated to well above the average of recent years. The uncertainty from Brexit prevented the UK from fully enjoying the tailwind from the synchronised global upswing. Without Brexit, the UK economy would have expanded by at least 2.5% last year.

9.39am GMT

Breaking: Britain’s service sector picked up pace in December, suggesting the economy is holding up well.

The UK services PMI, produced by data firm Markit, has jumped to 54.2 for last month, from 53.8 in November.

Markit PMI “the survey data are consistent with the UK economy having grown 0.4-0.5% in the fourth quarter of 2017. ” #GDP #GBP So steady growth seems to be continuing in the UK

Digging into the details behind the resilient strength signalled by the headline numbers, the survey data reveal an economy that is beset with uncertainty about the outlook, which is in turn dampening business spending and investment.

“Trends in hiring and business investment in fixed assets such as offices are showing signs of deteriorating, as is expenditure on IT, computing and other business services as worries about Brexit result in delayed spending decisions. Rising price pressures are meanwhile also hurting consumer- facing companies in particular.

9.27am GMT

Nearly time to discover how Britain’s service sector fared last month…

Stand by your desks! UK Services and Composite PMI are due in a few minutes #GBP #GDP

9.08am GMT

Breaking: Europe’s companies have posted their strongest growth since 2011.

The eurozone composite PMI, which measures activity across the region, jumped to 58.1 in December, up from November’s 57.5.

“A stellar end to 2017 for the eurozone rounded off the best year for over a decade, continuing to confound widely-held fears that rising political uncertainty would curb economic growth. At 56.4, the average PMI reading for 2017 was the highest annual trend since 2006. Manufacturing is enjoying its best growth spell since data were first collected over two decades ago while the service sector closed off its best year since 2007.

“The survey data are consistent with the quarterly rate of GDP growth accelerating to an impressive 0.8% in Q4, with no sign of momentum being lost as we move into 2018.

8.58am GMT

Debenhams’ profit warning has spooked other UK retailers too.

After Wednesday saw Next provide its retail peers with some post-Christmas optimism, Debenhams gave the sector a reality check this Thursday as it became the first casualty of 2018.

A 2.6% drop in like-for-like sales following a ‘volatile and competitive’ festive period forced the firm to issue a profit warning, with the ailing high street staple forecasting its full year figures to come in somewhere between of £55m to £65m, way off the £83m expected by analysts.

8.29am GMT

Retail analyst Steve Dresser reckons Debenhams has only itself to blame, for overpricing its Christmas gift offerings…

A stark reminder that you may have got away with this in the past @Debenhams but with consumer confidence low… Customers aren’t stupid. 4 bottles = £6 in most retailers elsewhere… Insult pricing damages value proposition. pic.twitter.com/ZCgEX9q8um

8.20am GMT

OUCH! Shares in Debenhams have plunged by 20% at the start of trading, following its shock profits warning.

They tumbled from 35.6p to as low as 28p, as traders punish the company for slashing its profit forecasts this morning.

We said yesterday that there was no sign so far of anybody having to bring forward their scheduled Christmas trading announcements from next week…but poor old Debenhams has stepped up to the plate today, to warn that weak gross margins (-150 bps) and a poor Sale last week have hit the bottom-line.

Full-year profits (to end August) are likely to be down to £55m-65m, versus a modest consensus forecast of about £83m, despite finding an extra £10m of cost savings…

8.04am GMT

Newsflash: Britain’s FTSE 100 has hit a fresh record high at the start of trading.

The blue-chip index rose by 27 points to 7,698 points, just over the previous record set on the final trading session of 2017.

7.53am GMT

High street retailer Debenhams has sent a shiver through the City this morning, reports my colleague Angela Monaghan:

Debenhams has issued a surprise profits warning after a disappointing festive season and a failure to entice shoppers despite heavy discounting in the post- Christmas sales period.

The department store chain struck a gloomy tone as it brought forward by a week its Christmas trading update to warn the current UK trading environment was “volatile and highly competitive with weaker demand in some more discretionary areas”.

7.47am GMT

Just in: London was the worst-performing part of the UK property sector last year, according to the Nationwide building society.

The average house price in the capital fell by 0.5% during 2017, Nationwide reports, while the UK average rose by 2.6%.

“The significant disparity in house prices across the UK has been a recurring theme in recent years. In this respect, 2017 saw the beginnings of a shift, as rates of house price growth in the south of England moderated towards those prevailing in the rest of the country.

“London saw a particularly marked slowdown, with prices falling in annual terms for the first time in eight years, albeit by a modest 0.5%. London ended the year the weakest performing region for the first time since 2004.

7.40am GMT

Investors ‘flocked’ to the Japanese stock market today to buy shares, says Japan Today, driven by expectations that the markets will rally in 2018.

It reports:

The 225-issue Nikkei Stock Average ended up 741.39 points, or 3.26%, from Friday at 23,506.33, its highest close since Jan 7, 1992. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 46.26 points, or 2.55%, higher at 1,863.82.

Tokyo markets were closed from Monday to Wednesday for the New Year holidays.

7.32am GMT

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Japanese stocks returned from holiday trading with a bang. The Topix index struck a 26 year, tracking the optimism that’s seen Wall Street close at record highs in the past two trading sessions. The energy sector was leading the charge in Asia after oil prices climbed again.

At the same time activity in Japan’s manufacturing sector rose to a 4 year high according to survey data.

Debenhams warns on profit after disappointing Christmas. Full year profits to be in the region of £55m to £65m. market had been expecting £83m

Related: Next results signal a good Christmas for UK retailers

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