As the FTSE builds on recent rally, investors digest the impacts of this week’s Budget as well as Black Friday today and the US market gears up for a return following the Thanksgiving holiday, there is plenty for market watchers to think about heading into the weekend.
Derren Nathan, head of equity research, Hargreaves Lansdown has shared with us his morning round up looking at the day ahead saying:
“The FTSE opened up around 0.25% this morning, taking it about 2% higher than when the week started, with the Chancellor delivering what was widely seen as a fiscally responsible Budget. Gilt yields remain below where they were on Monday, a sign of growing trust by those who lend to the Treasury. The market’s now pricing in a 94% chance of a quarter-point cut by the Bank of England next month.
Pub and restaurant group Mitchells & Butlers is one of the first consumer-facing companies to assess the impact of tax rises and the further hike in the National Living Wage. In its full-year results, like-for-like sales growth was a smidgen ahead of recent guidance, up 4.3%, with total revenue coming in at £2.7 billion. Operating profit rose £22 million to £322 million. After a slowdown in fourth quarter trading, markets should respond well today to news of a bounce back in the last 8 weeks, with resilient like-for-like growth of 3.8%. Cost inflation guidance for this year was already high at 6% so there may be some relief that this remains unchanged in the wake of recent policy announcements with the shares up 8% at the open.
Black Friday is upon us, with PwC forecasting a 1.5% increase in spending to £6.4bn. Under the bonnet, less people are expected to be drawn into the promotional frenzy but those that do are set to spend 13% more. Encouragingly for retailers, only a minority of those shunning the shops are doing so for financial reasons, with just 7% citing the Budget as a deciding factor when polled ahead of the speech.
US futures are up a touch as Wall Street prepares to return from Thanksgiving for a half day’s trading. US stocks have all but recovered from this month’s earlier sell off but nerves could still be on edge in December, typically a strong month for stocks. Since the turn of the century, Santa has delivered a December rally 18 out of 24 times. With expectations firming of a December rate cut, and the US government shutdown resolved, at least a few obstacles to Rudolph’s flight path have been removed.
Brent Crude oil prices have recovered slightly this morning but are just shy of the $63 mark as a barrel of the black stuff heads for its fourth monthly value decline in a row. Rising output and the prospect of another round of peace talks aimed at ending the Russia/Ukraine war are fuelling concerns of oversupply. The prospect of Russia pipelines reopening has also driven European gas prices to 18-month lows with losses further extended today.”
