US-China progress lifts global stocks ahead of busy earnings week
Matt Britzman, senior equity analyst, Hargreaves Lansdown: “Global markets are kicking off the week in upbeat fashion as geopolitics takes centre stage, with trade optimism giving investors something to cheer about. The UK joined the positive trend, though the celebrations are a little more restrained – a familiar pattern as London has been less sensitive to US-China trade headlines than other regions.
HSBC is setting aside $1.1bn after losing part of an appeal in a long-running lawsuit tied to Bernard Madoff’s Ponzi scheme. The bank acted as a service provider to funds that invested with Madoff and now plans a second appeal in Luxembourg, while also contesting the final payout if needed. For investors, it’s worth assuming the current figure is close to reality, even if the amount could shift. This looks like a big number in isolation, but at roughly 0.5% of HSBC’s market value, the group is large enough to absorb the hit and move on from the legacy issue.
US futures point to a strong open this morning, driven by fresh optimism around a potential US-China trade deal after officials signalled progress over the weekend. That upbeat tone follows a week where stocks closed at record highs, helped by inflation coming in softer than expected – a sign that borrowing costs could start to ease over time. Lower inflation reduces pressure on the Federal Reserve to keep interest rates high, which is generally supportive for growth. While markets seem confident about the direction of policy, investors would do well to remember that timing is rarely a certainty, and past forecasts have often missed the mark.
This week brings a packed earnings calendar with Apple, Microsoft, Alphabet, Amazon, and Meta all reporting, building on a season that has already delivered strong results. If tech earnings stay solid and trade talks advance, these factors could provide the next push for markets as we head toward year-end.
Oil rose to its highest level in more than two weeks, as hopes for a US-China trade deal boosted expectations for energy demand. The optimism follows reports of a ‘substantial framework’ agreed between US and Chinese officials, set to be discussed later this week. Oil prices also found support from fresh US sanctions on major Russian producers, raising concerns about tighter global supply.”