- FTSE 100 stumbles along with the rest of Europe.
- Vodafone/Three merger gets approval.
- US markets post new all-time highs.
- Bitcoin breaks the $100,000 barrier.
- Oil holds steady as OPEC+ decision looms.
- French borrowing costs edge up after government collapses.
Matt Britzman, senior equity analyst, Hargreaves Lansdown:
“The FTSE 100 is set to open lower this morning after slipping 0.3% yesterday, breaking a five-day rally as losses in healthcare and mining dragged the index lower. Gains in financials and airlines provided some support, but it wasn’t enough to offset the broader pressure. The rest of Europe is on a similar path this morning, as turmoil in the French government and question marks around German economic weakness look set to weigh on markets in early trading.
Vodafone and Three have secured regulatory approval for their merger, combining the UK’s third and fourth-largest mobile operators into a stronger competitor. While the full details are yet to emerge, this is a significant regulatory shift after years of blocked telecom deals. A streamlined three-player market, seen in countries like the Netherlands and Switzerland, could lift profitability and encourage much-needed investment in the UK’s lagging networks. This is a small win for the sector but doesn’t change the tough market dynamics.
The US holiday rally is off to a sparkling start, with the S&P 500 and Nasdaq hitting fresh highs just three trading days into December. But under the surface, weaker economic data – including a softer ADP jobs report and ISM Services hitting its lowest point since June – has traders keeping a close eye on this week’s employment figures. Treasuries rallied as the 10-year yield dropped below its 200-day average, while expectations for a December rate cut rose to 77.5%. Equities gained ground, led by Software and Semis, but broader participation was mixed, with the S&P 500 equal weight index slipping slightly.
Bitcoin has rocketed past the once-unthinkable $100,000 milestone, buoyed by news that Paul Atkins is Trump’s pick to replace Gary Gensler as SEC chair – a move seen as a win for crypto advocates. While questions linger over Bitcoin’s role as a reliable store of value, its speculative allure and the pace of crypto innovation are becoming hard to ignore. Institutional interest and regulatory shifts are adding legitimacy, turning what once seemed like a fringe asset into a force reshaping finance. Love it or doubt it, Bitcoin’s climb is rewriting the rulebook for digital assets.
Brent crude oil is hovering above $72 per barrel, stabilizing after a 2% dip, with traders eyeing OPEC+ talks on delaying output hikes to avoid a supply glut. US crude stockpiles saw their largest drop since August, but record-high production outside OPEC+ balanced the outlook. Geopolitical tensions, from Israel to Syria, are adding a risk premium, keeping markets on edge.”
Sussanah Streeter, head of money and markets, Hargreaves Lansdown:
“While not a shock, the collapse of Michel Barnier’s government after a vote of no-confidence is set to cause fresh jitters about the implications for France’s economy and its large budget deficit. Bond vigilantes are again circling, demanding higher prices to hold French government debt, given the belt-tightening measures have been rejected. Gilt yields on 10-year bonds have risen back up above 2.9%, higher than those for equivalent Greek debt. However, given interest rate cut expectations from the European Central Bank, borrowing costs are still sharply lower than in July.
The political drama may act as a drag on growth given it’s likely to make companies that bit more wary about investment given the stalemate. The uncertainty ahead may also see consumers squirrelling away more cash for emergencies rather than spending on goods and services.
