Derren Nathan, head of equity research, Hargreaves Lansdown: “The FTSE opened up around 0.25% this morning, taking it about 2% higher than when the week started, with the Chancellor delivering what was widely seen as a fiscally responsible Budget. Gilt yields remain below where they were on Monday, a sign of growing trust by those who lend to the Treasury. The market’s now pricing in a 94% chance of a quarter-point cut by the Bank of England next month.
Pub and restaurant group Mitchells & Butlers is one of the first consumer-facing companies to assess the impact of tax rises and the further hike in the National Living Wage. In its full-year results, like-for-like sales growth was a smidgen ahead of recent guidance, up 4.3%, with total revenue coming in at £2.7 billion. Operating profit rose £22 million to £322 million. After a slowdown in fourth quarter trading, markets should respond well today to news of a bounce back in the last 8 weeks, with resilient like-for-like growth of 3.8%. Cost inflation guidance for this year was already high at 6% so there may be some relief that this remains unchanged in the wake of recent policy announcements with the shares up 8% at the open.
Black Friday is upon us, with PwC forecasting a 1.5% increase in spending to £6.4bn. Under the bonnet, less people are expected to be drawn into the promotional frenzy but those that do are set to spend 13% more. Encouragingly for retailers, only a minority of those shunning the shops are doing so for financial reasons, with just 7% citing the Budget as a deciding factor when polled ahead of the speech.
US futures are up a touch as Wall Street prepares to return from Thanksgiving for a half day’s trading. US stocks have all but recovered from this month’s earlier sell off but nerves could still be on edge in December, typically a strong month for stocks. Since the turn of the century, Santa has delivered a December rally 18 out of 24 times. With expectations firming of a December rate cut, and the US government shutdown resolved, at least a few obstacles to Rudolph’s flight path have been removed.
Brent Crude oil prices have recovered slightly this morning but are just shy of the $63 mark as a barrel of the black stuff heads for its fourth monthly value decline in a row. Rising output and the prospect of another round of peace talks aimed at ending the Russia/Ukraine war are fuelling concerns of oversupply. The prospect of Russia pipelines reopening has also driven European gas prices to 18-month lows with losses further extended today.”
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