- FTSE opens down.
- Bank of Japan raises rates, after UK cuts and ECB holds.
- Benign US inflation data taken with large pinch of salt.
- AI demand soars at Accenture.
- Nike just not doing it in China.
- US Stock futures down.
- Brent crude sticks below $60.
Derren Nathan, head of equity research, Hargreaves Lansdown:
“The FTSE is down this morning after a small gain yesterday. The Bank of England cut rates as expected, but with the decision only carried by one vote, the case for further cuts is far from clear. This was echoed by a rate hold in the Eurozone coupled with an upgrade for the region’s growth outlook for both 2025 and 2026. Overnight, Japan’s central bank has increased borrowing costs to a 30 year high of 0.75%.
On the face of it, cooler than expected CPI of 2.7% for November extended an olive branch to American doves – hoping for a rate cut. However, with government agencies boarded up for much of that period, the number was based on incomplete datasets, and, after an initial dip, short term Treasury yields ended up broadly where they started. The major US stock indices all finished up on the day, with big tech rebounding amidst continued volatility.
Earnings at IT consultancy Accenture beat expectations, helped by a 120% increase in AI bookings. The company’s creating the largest workforce of OpenAI certified professionals in the world. However, slightly lower than expected guidance for the current quarter saw the stock fall 1.4% on the day.
Elsewhere, Nike shares fell nearly 11% in after-hours trading after a sharp decline in Chinese demand and the impact of tariffs on margins took the shine off the fact that second quarter revenue had beaten expectations: earnings fell 32% year-on-year. US futures are flat on balance today, with the tech led NASDAQ the only one of the big 3 indices expected to nudge up at the open.
Brent Crude prices have retreated a little further beneath the $60 mark, down nearly 20% year to date. The losses might have been greater still if US sanctions against Venezuela and the prospect of tighter measures on Russian exports weren’t in play. For now, it’s good old supply and demand that’s driving prices, with increasing production and jitters around the Chinese growth outlook weighing on traders’ minds.”
