Market Report: Santa rally hitched to rate-cut sleigh
Matt Britzman, senior equity analyst, Hargreaves Lansdown: “The FTSE 100 is pushing higher at the open, riding the same wave of optimism as US markets with rate-cut hopes lifting risk appetite. With a strong December finish, UK’s blue-chip stocks could edge past the S&P 500 for rare annual performance bragging rights – the two are neck and neck right now.
US stocks pushed through some early jitters, closing higher again, reinforcing the sense that momentum is back as rate-cut expectations firm up. Investors are leaning into the idea that easier policy is coming, which is fuelling appetite for risk and lifting everything from blue chips to small caps. Still, with inflation data and Fed decisions ahead, the path is far from set in stone. Expectations have swung wildly over the past month, so assuming any cuts are a done deal could be a costly mistake, and volatility can just as quickly return if the rate cutting narrative shifts. One thing’s clear, if markets want a Santa rally, they need the Fed to stay in line.
Salesforce shares are up a couple of percent after hours as strong order intake stole the spotlight, even as underlying revenue growth guidance stayed flat and sluggish. Overall sales came in slightly below expectations, but demand trends looked healthy with solid growth in bookings. AI-driven products were the standout, with rapid adoption highlighting Salesforce’s push into next-generation tools. Still, management signalled that faster revenue growth is at least a year away. For investors, the message is clear: strong demand and AI traction could support the stock, but patience will be needed as sales catch up.
Brent crude oil is edging up toward $63 a barrel, as Ukrainian strikes on Russian oil sites and stalled peace talks keep supply fears alive. Washington’s latest hard line on Venezuela is adding another spot of upward pressure into the mix. Still, prices are down double digits for the year, a reminder that the broader trend is softer. For most households and businesses, that’s a win – lower energy costs are a key factor in keeping inflation under control.”
Derren Nathan, head of equity research, Hargreaves Lansdown: “Rio Tinto’s recently appointed commander in chief Simon Trott is today unveiling his master plan to investors. There are some bold ambitions here, which if achieved should put the mining giant on a firmer footing. Cost reductions and further diversification away from iron ore into future facing metals such as lithium and copper are all on the table. These measures have the potential to grow underlying cash profit by up to 50% by the end of the decade. However, the path to getting here won’t be easy with nearer term guidance looking a little underwhelming.“