- FTSE 100 opens up after tepid Monday.
- Wall Street reaches new heights on trade and rate cut optimism.
- US stock futures steady.
- Qualcomm takes another shot at data centre market.
- Investors on ‘Fed watch’ ahead of tomorrow’s meeting.
- Gold dips below $4,000 as risk appetite returns.
- Oil prices down again on rumours of another production hike.
- HSBC raises guidance after beating Q3 forecasts.
Derren Nathan, head of equity research, Hargreaves Lansdown:
“The FTSE 100 is up slightly this morning, after closing flat yesterday. Softness in commodity prices isn’t helping, and the absence of big tech names means it’s missed out on the tailwinds blowing on the other side of the Atlantic. US stock futures are steady, after Monday saw fresh highs on Wall Street with the tech-heavy NASDAQ leading the way.
Microchip designer Qualcomm grabbed investors’ attention with the launch of AI chips for data centres and an initial customer win in Saudi Arabia. It’s a tough ask to go head-to-head with a titan like NVIDIA but the focus of its AI200 and AI250 chips on inference and power efficiency for models that have already been trained looks a sensible move. Investors embraced the move away from more cyclical consumer electronics, with an 11% rise in the share price. But it’s not Qualcomm’s first foray into the data centre market and once again execution will be the big challenge.
There are hopes that trade relations between Washington and Beijing can thaw when Presidents Donald Trump and Xi Jinping meet in South Korea later this week. Trade deal progress has been difficult but successful discussions could pave the way for lighter export restrictions on advanced technology to China, as well as preventing proposed Chinese tariffs on rare-earth minerals that are essential for semiconductor fabrication. Meanwhile, markets are all-but-certain of a quarter point cut by the Federal Reserve Bank tomorrow, and confidence in another similar cut in December is high.
Tomorrow’s a big day for US company news, with Microsoft, Meta and Alphabet all set to report. Together, their shares represent around $9 trillion of global stock market value. Given the punchy start to the week, it’s little surprise that investors are keeping their cards close to their chest today.
The tech rally has been mirrored by a retreat in the gold price to back under $4,000, more than 10% off last week’s all-time highs. Better-than-expected inflation data has taken the shine off the yellow metal, but the prospect of falling treasury yields, continuing dollar weakness and strong demand from central banks could tempt some to buy the dip.
Brent Crude prices are down for a third day in a row to around $65.4 per barrel. Trade and rate optimism should provide a healthy backdrop for demand expectations but its supply that continues to drive the narrative. OPEC+ leaders are meeting again this Sunday with reports suggesting another output rise is being tabled for December.”
Matt Britzman, senior equity analyst, Hargreaves Lansdown:
“HSBC’s headline numbers might look disappointing at first glance, but dig a little deeper and the story flips. Strip out the hefty $1.1bn Madoff-related provision and other one-offs, and profit before tax rose 3% year-on-year to $9.1bn – a good clip ahead of expectations. That strength came entirely from the top line: net interest income edged up to $11bn, helped by deposit growth and structural hedging, while wealth fees surged as client activity picked up. Costs and credit charges were broadly as expected, so the operational engine is clearly firing.
Guidance was the real kicker. Management lifted its 2025 banking net interest income target to $43bn or better, ahead of the $42.5bn that analysts had in their numbers. Yet with Hong Kong rates trending higher and deposit momentum intact, that feels conservative and leaves plenty of room to overshoot.“
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