- UK markets set to open higher as wage growth eases
- Bellway sees improving conditions into the new year
- S&P 500 posts yet another all-time high
- Oil prices under more pressure
Matt Britzman, senior equity analyst, Hargreaves Lansdown:
“UK markets are set to open higher, following another all-time high in the US and a general sense of cautious optimism about upcoming corporate earnings. There was also some positive economic news for the UK specifically, where slowing wage growth has raised hopes for imminent interest rate cuts, with the pound slipping as markets anticipate cuts in November and December.
Housebuilder Bellway has pledged to deliver a materially improved volume output in the new financial year after seeing completions drop by 30% in the year just ended. It’s been tough out there for the housebuilders, but things are improving as mortgage rates come down and buyers have more wiggle room on the affordability scale. Add in commitments for more policy support from the government, and attention is now very much on the recovery phase. Bellway’s long-term strength is volume, and the landbank is well-prepped for higher output – this should keep the name in good standing as the market recovers.
In a quiet yet strong session, the S&P 500 saw another all-time high as markets remained resilient despite bond markets closing for Canadian Thanksgiving. This calm start to the week gives investors time to reflect before earnings season gets into full swing. Plenty of key economic data points are on the horizon, including retail sales, jobless claims, and housing market updates.
Brent crude oil futures fell toward $75 per barrel on Tuesday, hovering around the $74.8 mark in this morning trading and continuing a three-day decline due to a weakening global demand outlook. Tensions between Iran and Israel and the potential for attacks on Iranian oil sites had been offering some support for prices. But news that Israel is planning on striking military, not nuclear or oil targets, has alleviated some of that supply concern. With the geopolitical risk premium falling, prices are once again being led by the struggling demand picture, with more weakness yesterday in the form of soft import data from China, and OPEC cutting its demand forecasts.”
