World equities flat, crude oil prices fall as markets await Trump-Putin talks
Short-term U.S. Treasury bond yields fell with markets anticipating a Federal Reserve interest rate cut.
The Dow hit a record high earlier in the session, becoming the last of Wall Street's main indexes to soar to a new peak. Benchmark S&P 500 and the Nasdaq were losing ground, dragged down by technology, utilities and financials stocks. The Dow Jones Industrial Average (.DJI), opens new tab rose 0.09%, the S&P 500 (.SPX), opens new tab fell 0.25% and the Nasdaq Composite (.IXIC), opens new tab fell 0.36%.
"This market continues to move higher and the story is just earnings and margins," said Talley Leger, chief market strategist at The Wealth Consulting Group in New Jersey.
"The inflation numbers that we saw this week were mostly services and in a services-based economy like ours, this is good for profit margins."
Data showed that U.S. retail sales increased solidly in July, rising 0.5% from the prior month, after an unexpected spike in producer price data on Thursday renewed inflation concerns and pared market expectations for Federal Reserve rate cuts this year.
European shares touched a near five-month high before pulling back, as investors drew support from a largely positive earnings season. The pan-European STOXX 600 (.STOXX), opens new tab index was flat at 0.08%.
The MSCI All Country World Index (.MIWD00000PUS), opens new tab consolidated recent gains. It was last up 0.05% at 952.34, just shy of the record level of 954.21 set on Wednesday.
The White House has said the Trump-Putin meeting will take place at 11 a.m. Alaska time (1900 GMT), with the U.S. president's hopes of a ceasefire agreement on Ukraine uncertain.
Trump has said a second summit involving Ukrainian President Volodymyr Zelenskiy could follow if the talks go well.
Details and the longevity of any agreement will be key, and for now investors are on standby. Ukraine's government bonds - key indicators of the mood - in recent days have largely stalled at a still-distressed 55 cents on the dollar.
"There's still a small degree of risk premium in European markets because of the war. Any type of resolution will ultimately pare that back," said Shaniel Ramjee, co-head of multi-asset at Pictet Asset Management, adding that oil and other commodity prices could also react.
"But I think that the market has learnt not to expect too much from these negotiations. Ultimately, Zelenskiy and the Europeans are not invited. They will need to be involved in any final negotiation," Ramjee added.
The two-year note yield, which typically moves in step with interest rate expectations for the Fed, fell 0.9 basis points to 3.73%. The yield on benchmark U.S. 10-year notes rose 0.3 basis points to 4.297%.
In currency markets, the dollar weakened 0.64% to 146.82 against the Japanese yen and was down 0.35% to 0.805 against the Swiss franc . The euro was up 0.57% at $1.1712.
The dollar index , which tracks the greenback against a basket of six major currencies, was last trading down 0.45% at 97.74.
Japanese GDP data released on Friday showed the economy expanding by an annualised 1.0% in the April-to-June quarter, beating analyst estimates. The dollar weakened 0.6% against the yen to 146.875 .
Brent crude was down 0.79% at $66.32 per barrel. U.S. crude fell 0.89% to $63.45.
Spot gold rose 0.17% to $3,341.26 an ounce. U.S. gold futures rose 0.22% to $3,342.70 an ounce.
Cryptocurrency markets stabilised after bitcoin touched a record $124,480.82 on Thursday. It was down 0.35% to $117,531.48.
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Mirror and Express targeted for takeover that would sack a third of journalists
The Mirror and Express newspapers are being targeted for a cost-cutting takeover that would result in more than 850 journalists losing their jobs. Documents seen by The Telegraph show that veteran newspaper executive David Montgomery is reviving a swoop on Reach that would allow the 76-year-old to wield the axe in a programme of 'radical' cost-cutting at the publisher. The £400m plan, dubbed 'Project Glass', includes a proposal to slash more than 850 journalists – more than a third of Reach's editorial workforce of 2,300 – and 100 employees in printing and production. In an unfinished draft of a presentation to investors backers, Mr Montgomery signals plans to lean more heavily on artificial intelligence instead, via 'automated content gathering'. Further cuts would be implemented in back office functions including HR and finance, while Reach's commercial headcount would be increased by 40 roles. 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Mr Denmark, who was National World's largest shareholder, has now taken it private. Alongside that row, Mr Montgomery mounted an unsuccessful bid for The Telegraph. He was in discussions with Todd Boehly, the chairman of Chelsea Football Club, over a complex transaction that would have used National World as a vehicle for the deal. Mr Boehly has experience as an entertainment industry publisher via his shareholding in the company behind The Hollywood Reporter and Rolling Stone. Mr Montgomery's presentation claims the backers of his Telegraph bid are ready to help bankroll a takeover of Reach with £250m of equity, alongside £150m of debt. Eldridge Industries, Mr Boehly's investment firm, was contacted for comment. Mr Montgomery may also seek to use his own cash following the £65m buyout of National World, which owns The Scotsman and The Yorkshire Post. He held a stake of 7pc, putting him in line for around £4.5m. His latest comeback bid comes at a torrid time for Reach, which has been left chasing dwindling advertising revenues amid a sluggish transition to the digital age. The company last month said it would begin trialling a paywall across its titles amid fears new Google AI tools will dent reader numbers. Reach has slashed hundreds of jobs in recent years in successive rounds of job cuts that have bruised staff morale. It has also faced criticism for its 'clickbait' stories and the deluge of adverts flooding its websites. The company's share price has declined by more than a third this year, leaving its market value at around £220m – a fraction of its £5bn peak in 2005. In the documents, Mr Montgomery criticises Reach's 'underperforming business', saying the circulation of its print newspapers – which still account for more than half of overall revenues – was dropping at a faster rate than those of rivals such as the Daily Mail. He also takes aim at Reach bosses, saying the company's 'pattern of decline has not been met with a tactical or creative response' and that acquisitions and pension top-ups worth more than £1bn over the last decade have 'all been squandered by lack of any organic plan'. Jim Mullen, the former gambling executive who oversaw more than 800 job cuts during his tenure, stepped down as chief executive of Reach earlier this year. He was replaced by Piers North, a former journalist who joined the company in 2014. Mr Montgomery claims his programme of heavy cost-cutting would save £65m per year and help increase profits by 50pc. He outlined plans to boost revenue by transforming Reach into a new digital marketing services giant – a move that he says would generate £200m in new revenues in four years. The strategy also includes a plan to expand Reach's events offering, based on the Pride of Britain brand, and generate half a million subscribers paying £5.99 a month by the end of 2027. Mr Montgomery began his career as a journalist and rose to become the editor of the News of the World before leading Mirror Group Newspapers. He established a foothold in UK regional newspapers in 2012 with the establishment of Local World, which he sold to Reach – then known as Trinity Mirror – three years later. Mr Montgomery then formed National World after snapping up titles from collapsed publisher JPI Media.
