18th Nov 2024 08:00
(Alliance News) - The FTSE 100 was called to open lower on Monday, ahead of trade balance data from the eurozone and comments from Bank of England Governor Andrew Bailey.
Meanwhile in the US confrontation appears inevitable between the Federal Reserve and the incoming Trump administration, writes SPI's Stephen Innes.
"Wall Street consensus is already grappling with the reality of a "run-hot" economic strategy that Trump's administration seems poised to embrace, pouring fiscal gasoline on an already exceptional US economic fire," Innes commented. "This isn't just a question of inflation creeping up—the potential for policy-induced acceleration puts the Fed in a bind.
"Powell's Federal Reserve, already cautious about pushing inflation down to its 2% target at the expense of job losses, might be up against a political machine unwilling to concede an inch on growth at all costs."
He added: "Controlling inflation was a campaign promise for Trump, but the irony is glaring. Policies like tariffs and restrictive immigration rules could create the very price pressures they aim to tame...early missteps could ignite the inflationary tinderbox. If Powell resists calls for easing, the tension between fiscal policy and monetary strategy could escalate into a full-blown stand-off, leaving the markets - and the Fed - caught in the crossfire."
In corporate news, Resolute Mining has paid USD80 million to the government of Mali as CEO Terence Holohan remains detained. Also, Prudential has completed a GBP535 million share buyback programme.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called down 6.2 points, 0.1%, at 8,057.41
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Hang Seng: up 0.9% at 19,651.00
Nikkei 225: down 1.1% at 38,293.19
S&P/ASX 200: up 0.2% at 8,312.60
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DJIA: closed down 305.87 points, 0.7%, at 43,444.99
S&P 500: closed down 78.55 points, 1.3%, at 5,870.62
Nasdaq Composite: closed down 427.53 points, 2.2%, at 18,680.12
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EUR: slightly up at USD1.0541 (USD1.0538)
GBP: down at USD1.2621 (USD1.2639)
USD: flat at JPY154.73 (JPY154.72)
Gold: up at USD2,582.83 per ounce (USD2,569.63)
(Brent): down at USD71.09 a barrel (USD72.08)
(changes since previous London equities close)
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ECONOMICS
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Monday's key economic events still to come:
11:00 CET eurozone trade balance
09:00 CET Germany Deutsche Bundesbank President Joachim Nagel speaks
10:30 CET Germany Deutsche Bundesbank executive board member Sabine Mauderer speaks
09:00 GMT UK Bank of England Governor Andrew Bailey speaks
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UK Prime Minister Keir Starmer will meet Chinese President Xi Jinping at the G20 summit in Brazil, Downing Street has confirmed. He will be the first British prime minister to meet the Chinese leader in more than half a decade when they hold talks in Rio de Janeiro on Monday and has pledged to have "serious, pragmatic discussions" when they speak. The Xi meeting will be one in a series of discussions the prime minister is expected to have with world leaders at the two-day summit, with conflicts in Ukraine and the Middle East likely to be high on the agenda.
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Trade could also come up for discussion amid concern over US President-elect Donald Trump's threats to impose tariffs on imports. It is thought that Starmer will focus on conversations that could help increase economic growth and security at home and abroad. In a statement ahead of the summit, the prime minister said: "It is in the UK's best interests to engage on the global stage – whether that's building strong and fruitful partnerships with our closest allies or being frank with those whose values differ from our own. Close cooperation with the world's leading economies is vital to secure investment into the UK and create the jobs needed to catalyse growth."
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US President-elect Donald Trump tapped Republican Brendan Carr, an Elon Musk-backed critic of big tech, to lead the Federal Communications Commission, FCC, calling him a "warrior for Free Speech" in a statement on Sunday. Carr has "fought against the regulatory Lawfare that has stifled Americans' Freedoms" and will "end the regulatory onslaught that has been crippling America's Job Creators and Innovators, and ensure that the FCC delivers for rural America," Trump said in the statement. "We must dismantle the censorship cartel and restore free speech rights for everyday Americans," Carr wrote in an X post Sunday. Carr was already the senior Republican on the FCC, an independent agency that regulates licenses for television and radio, pricing of home internet, and other communications issues in the US. Long rumoured as a contender for FCC chair, he has built an alliance with billionaire Musk – Trump's wealthiest backer, whose Starlink satellite internet service could benefit from access to federal cash. Carr has also publicly agreed with the incoming Trump administration's promises to slash regulation and punish television networks for what they say is political bias.
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US President Joe Biden has cleared Kyiv to use long-range American missiles against military targets inside Russia. The news on Sunday came hours after Ukraine announced nationwide emergency power restrictions from Monday after Russia's massive attack, which killed 11 civilians and further damaged the country's already fragile ENERGY grid.
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Chinese President Xi Jinping said China would "strive for a smooth transition" in relations with the US and is ready to work with the incoming Trump government. "China is ready to work with the new US administration to maintain communication, expand cooperation and manage differences, so as to strive for a smooth transition of the China-US relationship," Xi told Biden through a translator. In his first White House term, Trump engaged in a bruising trade war with China, imposing tariffs on billions of dollars in Chinese products and drawing retaliation from Beijing. He embraced a similar stance on the campaign trail this year. Xi also called for Asia-Pacific economies to "unite and cooperate" in the face of mounting "protectionism," at a summit in Peru. Speaking to Asia-Pacific Economic Cooperation leaders, Xi pointed to "challenges such as geopolitics, unilateralism and rising protectionism." "We must unite and cooperate," he added, in remarks published by Chinese state broadcaster CCTV.
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Australia, Japan and the US committed to closer military cooperation in training their forces as the countries deepened their ties in a bid to counter China's military strength. Australia's Minister of Defence Richard Marles hosted the US Defense Secretary Lloyd Austin and Japan's Defence Minister Gen Nakatani, Sunday for the trilateral ministers' meeting – the first to be held in Australia. Under the new agreement, Japan's Amphibious Rapid Deployment Brigade – an elite marine unit – will be deployed to Darwin to regularly work and train alongside Australian and US forces.
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The co-leader of Germany's Social Democrats warned that the party must "stand behind" embattled Chancellor Olaf Scholz as the country speeds toward early elections. "Olaf Scholz is the chancellor. And everyone who has responsibility in the SPD has made it clear in recent days that we stand behind him," said Lars Klingbeil on the sidelines of an SPD event in the western city of Essen. He said the SPD must prioritise dealing "with the content of the federal election campaign - not discussing personnel."
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BROKER RATING CHANGES
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Deutsche Bank Research cuts GSK to 'hold' (buy) - price target 1,350 (1,700) pence
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HSBC raises Hays to 'buy' - price target 100 pence
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Berenberg raises Cerillion price target to 2,125 (1,960) pence - 'buy'
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COMPANIES - FTSE 100
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Prudential announced late Friday it has completed its share buyback programme launched in late June. The provider of life and health insurance and asset management in Asia and Africa bought back 81.4 million shares in total at an average price of 657.45 pence per share, worth GBP535 million.
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COMPANIES - FTSE 250
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Elementis announced on Monday that Chief Executive Officer Paul Waterman will step down "no later than" its annual general meeting in April, after nine years in the role. He has agreed to remain with the company until a successor is appointed, the chemicals manufacturer for consumer and industrial products said, adding that he will remain available for transition-related and other support until the end of July. The board has started its search for his successor. Waterman "has agreed with the board that it is the right time to transition the leadership of Elementis to a new [CEO]", the company said. Chair John O'Higgins said Waterman "will be leaving the company in a strong strategic and financial position and with many exciting opportunities ahead".
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OTHER COMPANIES
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Resolute Mining said Monday it has executed a memorandum of understanding expressed as a protocol with the government of Mali. The signing of the protocol sets the framework for further detailed discussions with the government regarding the long-term future of the operations in Mali, Resolute said, including migration of the company's assets in Mali to the 2023 Mining Code and maintaining the safety of the company's employees. Speaking of which, Resolute said it is working on the remaining procedural steps for the release of the three employees including CEO Terence Holohan, who were detained last week over a tax dispute with the government. Resolute also said that pursuant to the protocol, it has made an initial settlement payment of approximately USD80 million to the government from existing cash reserves, with future payments of approximately USD80 million to be made in the coming months from existing liquidity sources. It noted that operations in Mali "continue as normal and have not been impacted", and that its shares have resumed trading on the Australian Stock Exchange.
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TruFin announced that it expects 2024 revenue of over GBP42 million, more than double last year's GBP18.1 million and "significantly ahead of market expectations". This has predominately been driven by a strong performance from the console and mobile divisions of Playstack, TruFin said. Consequently TruFin, the holding company of three growth-focused technology businesses, said it is on track to record its first annual positive earnings before interest, tax, depreciation and amortisation of at least GBP3.5 million, "materially ahead" of expectations. It also expects a narrowed adjusted pretax loss of "no more than" GBP2.5 million, compared with last year's GBP6.6 million. "2024 has been a transformational year for the group. Playstack and [Oxygen Finance] are now profitable, and both remain on track to grow significantly over the coming years," TruFin said. In the medium term, TruFin said it expects to record its first annual pretax profit in 2025, followed by "significant top line growth" with revenue exceeding GBP55 million in 2026.
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By Emma Curzon, Alliance News reporter
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