- Global markets are waiting on economic data from the US, delayed by the record shutdown.
- UK market opens slightly down following poor end to the week.
- Budget morale likely to dominate the domestic market, as Rightmove data shows impact of rumoured Mansion Tax.
- Jaguar Land Rover owner Tata Motors’ share price falls as impact of cyberattack revealed.
Emma Wall, Chief Investment Strategist, Hargreaves Lansdown:
“Global markets are waiting on the overdue economic data from the US – which will potentially be released at the beginning of this week. During the record long shutdown, inflation and jobs data for October was not collated or released, which has left policy makers in limbo. These two data points are key for the Fed to help determine whether they continue to cut rates when they meet next month. The S&P 500 fell on Friday, following a strong start to the week, as the market digested what the lack of data might mean for the dot plot.
Interest rate uncertainty is not just a feature of US markets at the moment. Here in the UK, we saw rate expectations jump on Friday, following rumours that the Chancellor Rachel Reeves would not be making the much-anticipated increase to income tax in the Budget next week. UK assets performed poorly on Friday, with the FTSE 100, UK gilt market and the pound all falling in value. The FTSE 100 closed down 1.11%, and opens slightly down this morning too.
The jump in gilt yields – bond prices and bond yields have an inverse relationship – reflects market concerns that without a rise in income tax, the Budget will leave the Chancellor with insufficient headroom, which would make pro-growth spending more difficult. 10-year gilts are currently paying a yield of 4.58%, up from 4.39% last week.
Budget expectations are likely to continue to dominate market news this week. Last Friday we saw housebuilder Taylor Wimpey report that purchases had been put off until buyers had policy clarity, and this morning figures from Rightmove revealed the average new seller asking price fell by 1.8% in November. November is typically a weak month for house prices, but this is the largest drop since 2012. A spokesperson for the firm called the Budget a ‘big distraction,’ particularly for houses priced above £500,000. This is likely to be linked to a potential Mansion Tax.
Jaguar Land Rover reveal pain of cyber attack
Jaguar Land Rover has shared that the cyber-attack cost the firm £200m – though the wider industry impact runs to many more millions. In an update post-market-close on Friday, the group confirmed that it made a £485m loss in the three months to 30 September, down from a profit of £398m thanks to the cyber-attack and the impact of US tariffs. JLR parent company Tata Motors, which is listed on the Indian stock exchange, opened 6% down and is now down 4.5% in intraday trading. Last week, it was revealed that the cyber-attack had contributed to a disappointing third quarter for the UK economy, showing how integral the firm – which produces around 1,000 cars a day – and its wider supply chain is to growth, with an estimated economic impact of £2bn. The attack, following similar on M&S and the Co-op, is a sharp wake up call for both British businesses and policy makers on the potential threat to profit and growth”.
Nvidia bubble fears meet big expectations
Matt Britzman, senior equity analyst, Hargreaves Lansdown:
“For the first time in several quarters, Nvidia enters earnings with sentiment under pressure. Shares have softened on concerns of an AI bubble and the reality that China sales are unlikely to rebound soon. Still, the underlying picture remains strong, with third-quarter revenue expected near the top end of guidance at around $55 billion – and scope for an upside surprise.
Attention will also turn to guidance for the fourth quarter and any colour in 2026. CEO Jensen Huang recently flagged $500bn worth of orders on the books, and investors will be keen for clarity on timing, which could imply material upside to current forecasts. With plenty of nervousness in the air, strong results from Nvidia could be the perfect catalyst to reignite the AI flame.”
The author holds shares in NVIDIA.
