Market Report: US investors choose to look on the bright side in a quiet week
Derren Nathan, head of equity research, Hargreaves Lansdown: “The FTSE is off to another tepid start after a flat performance on Tuesday, which saw the likes of Barclays and Lloyds rally off the back of lowered capital requirements for UK banks, with precious metal miners Fresnillo and Endeavour pulling back as gold retreated from Monday’s one-month high.
European stocks have also moved very little this week. Airbus has provided an update to the market in a week, which has, so far, yielded a software glitch and, more concerningly, a quality issue in the supply chain of its fuselage panels. It’s trimmed its delivery target for the year by around 30 planes to about 790 commercial aircraft. There’s been no changes to 2025 financial guidance, but markets may want to wait for a steer on next year’s guidance before giving back recent losses.
US stock futures are up today after a news-light Tuesday. However, continuing optimism around a Fed rate cut this month helped to push stocks higher. Sticking with the aircraft manufacturers, Boeing shares took off by 10% after chief financial officer Jay Malave pointed to an increase in 2026 deliveries of both its narrow-bodied 737 aircraft and the wide-bodied 787 Dreamliners, which he expects to contribute to positive growth in free cash flow.
Jobs data has been hard to come by in the wake of the recent US government shutdown, with markets relying on private data from ADP. Today’s payroll report is a key focus for markets. Another weak read would further cement hopes of a fall in borrowing costs, where Fed Fund futures currently imply an 87% chance of a December cut.
Brent Crude oil prices are back within striking distance of $63 per barrel, rising 0.5% as ‘constructive’ talks to end the war in Ukraine failed to make a breakthrough. Receding hopes of an end to sanctions on Russian oil price are for today at least overshadowing wider concerns on over supply which have strengthened after US Inventories showed a 2.5 million increase last week.”
Matt Britzman, senior equity analyst, Hargreaves Lansdown: “HSBC has confirmed Brendan Nelson as chair, but his prior reluctance to commit to a full term raises questions about the permanence of this appointment. The move underscores ongoing challenges in succession planning, especially after an exhaustive search of over 100 candidates failed to deliver a result. The seat is filled, at least for now, so this shouldn’t have a major impact on shares. But it will reinforce investor concerns around leadership stability, and longer-term succession planning, at a critical juncture for the bank.”