Market Overview: The FTSE 100 (^FTSE) saw a decline while European markets experienced gains, with US stocks reflecting mixed results. This shift comes as traders anticipate an increased chance of an interest rate cut by the Bank of England over the Christmas period.
Federal Reserve Actions: This week, the US Federal Reserve implemented its third interest-rate cut of the year, yet tech stocks still faced a downturn.
Tech Stock Reactions: Investors are moving away from tech as concerns over AI-related overvaluations resurface. Companies like Broadcom (AVGO) and Oracle (ORCL) reported earnings that disappointed Wall Street. In early trading, Broadcom’s shares fell nearly 8% despite surpassing its quarterly earnings expectations, as it failed to clarify AI profit prospects.
UK Economic Insights: UK markets are responding to unfavorable GDP data. The Office for National Statistics reported that the economy contracted by 0.1% in October, defying predictions of growth, following a similar decline of 0.1% in September.
Analyst Comments: According to Barret Kupelian, chief economist at PwC, “When Westminster holds its breath, so does the high street.” This economic weakness is attributed, in part, to a recent cyberattack on Jaguar Land Rover and the uncertain atmosphere surrounding the autumn budget.
Future Forecasts: Neil Wilson, an investor strategist at Saxo Markets, expressed doubts about growth, stating that, “There has been no growth since June,” indicating potential contraction in Q4. He anticipates a rate cut by the Bank of England is very likely.
Stock Market Performance: As the US markets opened, London’s FTSE 100 index had decreased by 0.1%. Notably, the DAX in Germany rose by 0.4%, and the CAC 40 in Paris increased by 0.6%. In currency markets, the British pound fell by 0.1% against the dollar, dipping just below $1.34.
