What to Watch: French economy weighs on eurozone, Aston Martin rescue, Hargreaves Lansdown

Edmund Heaphy
Finance and news reporter
Economic growth in France, the eurozone's second-largest economy, was weak in the final quarter of 2019. Photo: AP Photo/Daniel Cole

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:

Eurozone economic growth misses expectations

Growth in the eurozone economy was weaker than expected in the final quarter of 2019, according to official European Union data.

Statistics agency Eurostat said that the GDP in the 19 members that use the euro currency climbed by just 0.1% compared to the previous three-month period, below the 0.2% growth that analysts had forecast.

Inflation in the eurozone picked up in January, according to separate data. Eurostat said that prices grew by 1.4% compared to the same month in 2019, largely due to a jump in food, alcohol, tobacco, and energy prices.

Other data painted a weaker picture of economic health in the eurozone. Gross domestic product in France, the bloc’s second-largest economy after Germany, fell 0.1% in final quarter of 2019, largely due to a decline in exports.

FTSE 100 falls as coronavirus reaches UK

Stocks fell in London on Friday as authorities confirmed that the coronavirus had reached the UK.

The FTSE 100 (^FTSE) index was down by 0.7% in London after the country’s chief medical officer said that two patients were being treated by the National Health Service in England.

The losses were sharper than those experienced in Europe, where stocks fell in the wake of the weaker-than-expected eurozone growth data.

Investors continue to assess the impact of coronavirus, with the total number of confirmed cases of the virus expected to hit 10,000 on Friday.

The pan-European STOXX 600 index (^STOXX) was down by more than 0.1%, reversing earlier gains.

Germany’s DAX (^GDAXI) was down marginally, while France’s CAC 40 (^FCHI) declined by more than 0.1%.

The declines in Europe followed a mixed trading session in Asia, where stocks sputtered after an initial rally. The Hang Seng (^HSI) was 0.37% down at market close. But while Japan’s Nikkei (^N225) erased over half of its earlier gains, it ended the day almost 1% in the green.

Consumer confidence climbs thanks to ‘Boris bounce’

Consumer confidence climbed for the second straight month in January thanks to a small post-election “Boris bounce,” according to new data.

While the consumer confidence index rose by 2 points to –9 this month, the indicator remains firmly in negative territory, and the growth in confidence was slower than in December, market research firm GfK said.

The long-running index has been in negative territory for around four years.

Joe Staton of GfK suggested that the boost to confidence was sparked by Boris Johnson’s emphatic general election win in December.

“The first month of 2020 has given us a mini Boris bounce, with a two-point increase,” he said.

“While January marks four years of the index failing to penetrate positive territory, we now have two consecutive months of improvement.”

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Woodford collapse costs Hargreaves Lansdown £2.3m

Hargreaves Lansdown (HL.L) has waived £2.3m ($3m) worth of fees on Neil Woodford’s investment funds, the investment platform said Friday.

Investment platform Hargreaves Lansdown was one of the biggest supporters of stock picker Woodford, whose investment business collapsed last October following a four month crisis.

Hargreaves last year took the decision to waive platform fees for clients who had invested in Woodford products, after withdrawals from the money manager’s flagship fund were suspended.

The decision has cost Hargreaves Lansdown around £2.3m, the company said in its half year report on Friday. 

Aston Martin rescue deal agreed as F1 billionaire buys stake

Shares in struggling carmaker Aston Martin Lagonda (AML.L) have soared after it announced a rescue deal led by a billionaire Formula One (F1) owner.

A consortium led by Canadian Lawrence Stroll, owner of the F1 team Racing Point, will take 16.7% of the company for £182m in a deal announced on Friday. It plans to increase its holding to up to 20%.

The luxury carmaker, best known as James Bond’s car of choice, sought to raise emergency funds after a difficult trading year and “severe pressure” on liquidity.

A total of £500m will be raised, with the rest of the cash coming from a rights issue from leading current shareholders. Its share price rocketed 26.7% on the announcement.

The company also announced the Racing Point F1 works team, owned by Stroll, will be renamed the Aston Martin F1 works team.

What to expect in the US

Futures are pointing to a lower open for US stocks.

S&P 500 futures (ES=F) are down by 0.22% and Dow Jones Industrial Average futures (YM=F) are down by 0.64%. Nasdaq futures (NQ=F) are down by 0.7%.

Companies reporting later on Friday in the US include:

  • Caterpillar (CAT)

  • Colgate-Palmolive (CL)

  • Chevron (CVX)

  • Exxon Mobil (XOM