“It’s been a torrid day for London markets with the FTSE 100 slumping by almost 2% just days after flirting with record highs,” says Dan Coatsworth, Investment Analyst at AJ Bell.
“Few companies managed to avoid the rout with blue sky optimism drowned out by a weakening labour market and geopolitical risk. Growth darlings Ocado and Scottish Mortgage were among the worst hit as investors rushed to those perceived safe havens, but even defensive stocks like Centrica struggled to make meaningful gains.
“Subdued trading on Wall Street did little to lift sentiment in the UK which had been doused with a bucket of cold water after the latest jobs figures showed substantial cracks appearing in the UK economy but also the kind of wage growth likely to hold off rate cuts until later in the year. UK inflation data heading our way tomorrow is expected to take CPI down towards 3%, a far cry from those double-digit highs but still above that all important 2% target.
“At the moment it seems the European Central Bank will be first to cut rates, with its president telling CNBC that barring any surprises the restrictive policy would soon come to an end. Current geopolitical tensions mean surprises must be priced in, but with the cost of a barrel of Brent Crude staying helpfully below $90 dollars the path to pivot in Europe does at least seem within sight.”
Morgan Stanley
“Like Goldman Sachs before it, US investment banking giant Morgan Stanley has cashed in on a rebound in dealmaking.
“With profit up 14% it’s not a bad first report for new boss Ted Pick, but he’s undoubtedly benefitting from the end of a two-year slump and increasing confidence that M&A activity is back with a vengeance.
“The bank still faces ongoing regulatory scrutiny over the onboarding of wealth management clients, but this update suggests it has found a higher gear in the race to catch up with rivals.”
Bank of America
“On the flip side, Bank of America shares slipped back following its announcement of a fall in profits as it seeks to set aside additional cash to cover bad loans.
“Despite high rates its net interest income margins have been squashed, with cautious consumers happy to reap the benefits of saving more and wary of spending on big ticket items until the Fed pivots.
“But the bank’s CFO was bullish when it came to the outlook and with rate cut expectations being pushed back, higher for longer should be a boon for the company as long as the US economy continues to show resilience.”
These articles are for information purposes only and are not a personal recommendation or advice.
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- Wed, 24/04/2024 - 10:15