- FTSE 100 opens down.
- UK public finances in focus as Budget countdown begins.
- Housing market resilient despite uncertainty on property tax.
- Oil prices head for third straight month of declines.
- US stock futures buoyed by Amazon and Apple results.
Derren Nathan, head of equity research, Hargreaves Lansdown:
“There are few tricks or treats expected to drive markets today with corporate reporting largely taking a mid-earnings season breather, and scheduled US inflation data delayed due to the ongoing government shutdown.
The FTSE 100 is down slightly this morning after eking out yet another record close yesterday marking a climb of over 4% for the month. With November around the corner there’s a growing focus on the forthcoming Budget.
With UK public borrowing near its highest ever levels and long-term borrowing costs coming down slower than previously hoped, it’s not just the ongoing furore over Rachel Reeves breach of Southwark council’s property letting rules that’s giving the embattled chancellor a headache. Speculation over manifesto-breaking tax rises and her future as a resident of 11 Downing Street is unlikely to quieten down as Budget-day approaches.
Housing taxes are likely to be one area for particular attention on 26 November, with rumours circulating about the abolition of stamp duty in favour of an annual property tax. Despite the evolving higher for longer outlook for mortgage rates today’s Nationwide House Price Index paints a resilient picture for the property market. Prices have expanded 0.3% in October albeit at a slower clip than seen in the previous month. That’s an annual rise of 2.4%.
Mortgage approvals are close to pre-pandemic levels despite nearly a doubling in rates. With UK housebuilder share prices in the doldrums it’s an interesting time to consider the sector but risk-averse investors may choose to wait for more clarity on any changes to the tax-regime at the end of November.
Brent crude oil prices have dipped below $64 per barrel and look set to mark a third straight month of declines. A strengthening dollar and reports that OPEC+ is primed to announce a 137,000 barrel per day production hike on Sunday are keeping a lid on prices. The easing of trade friction between the US and China should also release some tension in the market after Donald Trump revealed that China will start to buy US energy products.
US stock futures are pointing broadly upwards today, with new record highs in sight for the major indices. Big Tech sentiment was boosted after the bell as Amazon and Apple both revealed Q3 earnings beats, prompting after-hours share prices rises of 13% and 2% respectively.”
Matt Britzman, senior equity analyst, Hargreaves Lansdown:
“Amazon’s latest results were all about AWS – and it didn’t disappoint. Cloud revenue jumped 20% year-over-year to $33 billion, the fastest growth since 2022, helping to ease some fears that Amazon is falling behind its rivals. The message from management was clear: demand for computing power, especially for AI, is exploding, and they’re racing to keep up. With billions going into new infrastructure and custom chips, the cloud battle is only getting more intense.
Apple’s quarter came down to the iPhone. Sales of $49 billion were a touch light, but guidance for the holiday season stole the show, with expectations for record revenue and double-digit iPhone growth in the coming quarter. The story here is strong demand held back by supply, something that should be fixed by Christmas. Looking ahead, Apple faces a big test on AI – its “Apple Intelligence” launch fell flat, and the new Siri coming next year will be a defining moment for the biggest brand on the planet.”
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