The FTSE 100 and European markets were broadly down on Monday, while gold prices rose briefly to an all-time high, as traders digest speeches by US Federal Reserve boss Jerome Powell from Friday.
The FTSE 100 (^FTSE) was 0.3% lower by the market close, while Germany’s DAX (^GDAXI) was almost flat and the CAC (^FCHI) in Paris fell 0.2%.
Meanwhile, US stocks opened in the red with the S&P 500 (^GSPC) down 0.9%, the Dow (^DJI) declining 0.4% and the tech-heavy Nasdaq (^IXIC) trading 1.5% lower.
Gold (GC=F) bounded as much as 3.1% higher at the start of trade in Europe, hitting $2,135.39 a troy ounce, before falling back down. As of 4.20pm in the UK gold was trading 2.1% lower. The yen also pared previous gains. Traders typically buy gold and the yen as appetite for risk weakens.
Following optimistic comments from the Fed on its rate path, all eyes this week will be on US jobs numbers on Friday as well as manufacturing data.
Read more: UK house prices predicted to fall in 2024
According to Deutsche Bank analysts, last week saw the close of the best month for a global 60:40 portfolio of equities and bonds since the positive vaccine news in November 2020.
“Supporting last week’s rally was encouraging inflation data on both sides of the Atlantic, an upward revision of US GDP for Q3 that showed annualised growth of +5.2% (previously +4.9%), and some dovish Fedspeak,” they added.
Follow along with us for live updates throughout the day:
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Michael Hewson of CMC Markets’ take on the weakness in mining stocks today:
We appear to be seeing some profit taking in miners after the broker upgrade inspired gains of Friday which saw Anglo American and Antofagasta pop higher. BP and Shell are also acting as a drag on the back of further weakness in oil and gas prices.
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Propping up the FTSE this afternoon we have ⬆️:
Rolls Royce (up 3.6%)
JD Sports (up 3.3%)
B&M European Value Retail (up 2.1%)
And weighing it down ⬇️:
Anglo American (down 3.7%)
Glencore (down 2.7%)
Rio Tinto (down 2.5%)
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More on Bitcoin here:
Bitcoin price heads past $41,500, extending yearly gains to above 150%
Yahoo FinanceThe moves come hand in hand with a spike in gold prices, which sent the commodity to all-time highs on Monday.
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A new rental index from lettings platform Goodlord shows rents were up 7% year-on-year in the UK in November:
Average rents for new tenancies confirmed in November are now 7.3% higher year-on-year. The average price per property in November 2022 was £1,087. This compares to today’s figure of £1,166. When looking at specific regions, the biggest year-on-year change for confirmed November rents is seen in the North West, where prices are up by 11% compared to last November. The majority of other regions — the East Midlands, North East, South East, South West and West Midlands —have all seen rises of 7%+.
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Hunt blames Brexit and Covid for government instability
Photo: Stefan Rousseau/Pool via REUTERS
We have this from our friends at PA:
Jeremy Hunt has blamed Brexit and the COVID pandemic for the damaging instability at the heart of government.
“I think there’s been a very particular reason why we’ve had that political chopping and changing – I don’t think it’s a good thing,” the chancellor said.
He told the Resolution Foundation’s conference in London there are “enormous benefits to ministers staying in their posts for a long period of time”.
“But we had Brexit, that led to a hung parliament, that led to a politically incredibly challenging time where the British people had voted to leave the EU but Parliament couldn’t agree on how, and ultimately to the fall of Theresa May’s government.
“Then we had a pandemic, these things have led to changes in Whitehall. I hope we can have more stability going forward, absolutely, because I think it is a better thing for policy.”
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A new report has been published today by the think tank the Resolution Foundation, arguing that the UK needs a new economic strategy in order to close a living standards gap with European peers. You can read about it here.
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Finalto’s chief market analyst Neil Wilson has a look-ahead for us:
The Reserve Bank of Australia pause again after raising rates 25bps in November. Last month the central bank indicated it may not seek to raise again, refraining from repeating a phrase in October statement that “some further tightening of monetary policy may be required”. Australia’s Inflation for October gives the RBA reason to pause, with it slowing to 4.9% from 5.6% last time and against a forecast 5.2%. Then Friday is jobs day! A month ago, the data was confirmation bias for many that the Fed is done. Nonfarm payrolls increased by 150,000 in October, whilst the previous month was revised down quite a bit.
The NFP helped cement the narrative that the Fed is not only done with hikes but may be aiming to cut soon – markets have started to price in a better-than-evens chance it cuts rates by Mar 2024. The unemployment rate edged higher to 3.9% from 3.8% in September, while annual wage inflation softened to 4.1% from 4.3%. The report is the last major piece of economic data ahead of the FOMC’s December 12-13th meeting. The headline number is fc at 185k, wages +0.3% and unemployment 3.9%.
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Bitcoin is ripping (again)
Bitcoin (BTC-USD) is up around 5.8% so far today and has hit its highest point since March last year. It is currently trading above $41,000.
The cryptocurrency has sustained a rally spurred on by hopes of the approval of a spot bitcoin ETF in the US. The Securities and Exchange Commission has been considering applications by major fund and investment managers such as Blackrock and Fidelity.
Bitcoin five-year look. Chart: Yahoo Finance UK
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Some central bank signals to watch out for today:
Watch: Rishi Sunak suggests more tax cuts are on the way — but refuses to commit to triple lock manifesto pledge
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