- FTSE flat after CPI comes in hotter than expected
- Escalation in Ukraine weighing on sentiment
- NVIDIA spikes ahead of earnings
- Walmart raises guidance as holiday season approaches
- CVS Group trading in-line despite soft UK demand
- Brent Crude near $73.5mn as Ukraine dominates narrative
Derren Nathan, head of equity research, Hargreaves Lansdown:
“The FTSE’s struggling for direction at the open after core CPI growth for October of 0.4% came in higher than both expectations and the level of price rises seen in September. A further interest rate cut by the Bank of England next month is looking increasingly unlikely.
The tepid start in London follows a fall in most European indices. Traders are taking stock of a rapidly evolving geopolitical outlook, as the conflict between Russia and Ukraine escalates to a new level amidst increasing nuclear sabre rattling by Vladmir Putin.
Technology stocks had the best of it on Wall Street yesterday, led by a 5% rise in AI titan NVIDIA ahead of today’s third-quarter earnings. The emerging Dutch data centre player Nebius showed the broadening demand for accelerated computing beyond the mega caps, with a 35,000 order of NVIDIA chips to fit out its first GPU cluster in the United States. Meanwhile, customer activity further down the infrastructure chain suggests that earlier reports of overheating issues in the company’s next-generation Blackwell chips may have been exaggerated.
Outside of technology, Walmart was another riser after beating third-quarter forecasts and raising its guidance ahead of the festive season. It’s winning market share in all income demographics but even more so amongst higher earners which means there’s the potential for further upside to margins.
Veterinary services provider CVS Group has confirmed it’s trading in line with market expectations ahead of its AGM later this morning. Soft demand in the UK is being offset by expansion in Australia which is now very much the focus of the Group’s acquisition strategy.
It’s expecting an £8mn impact from Rachel Reeve’s changes to the national insurance scheme next year but expects to mitigate this through efficiencies and growth in both the UK and Australia. The valuation has been badly damaged by the ongoing enquiry by the Competition & Markets Authority, but under the bonnet, the company offers exposure to some strong long-term growth drivers. However, until certainty emerges next year about the extent of any changes levied on business practices in the industry, the shares could remain under pressure.
Brent crude prices are continuing this week’s upward trend, with futures now trading at $73.5 per barrel. The ratcheting conflict between Russia and Ukraine is the key driver currently overshadowing a sharp rise in US inventories and the resumption of production at Norway’s Johan Sverdrup oil field, the largest in Europe.”
For access to stock reports and articles please visit the Hargreaves Lansdown share research homepage or sign up to our updates. Our News & Insights page now provides real time reaction to market events throughout the day via HL Live.
