Derren Nathan, head of equity research, Hargreaves Lansdown: “There are few tricks or treats expected to drive markets today with corporate reporting largely taking a mid-earnings season breather, and scheduled US inflation data delayed due to the ongoing government shutdown.
The FTSE 100 is down slightly this morning after eking out yet another record close yesterday marking a climb of over 4% for the month. With November around the corner there’s a growing focus on the forthcoming Budget.
With UK public borrowing near its highest ever levels and long-term borrowing costs coming down slower than previously hoped, it’s not just the ongoing furore over Rachel Reeves breach of Southwark council’s property letting rules that’s giving the embattled chancellor a headache. Speculation over manifesto-breaking tax rises and her future as a resident of 11 Downing Street is unlikely to quieten down as Budget-day approaches.
Housing taxes are likely to be one area for particular attention on 26 November, with rumours circulating about the abolition of stamp duty in favour of an annual property tax. Despite the evolving higher for longer outlook for mortgage rates today’s Nationwide House Price Index paints a resilient picture for the property market. Prices have expanded 0.3% in October albeit at a slower clip than seen in the previous month. That’s an annual rise of 2.4%.
Mortgage approvals are close to pre-pandemic levels despite nearly a doubling in rates. With UK housebuilder share prices in the doldrums it’s an interesting time to consider the sector but risk-averse investors may choose to wait for more clarity on any changes to the tax-regime at the end of November.
Brent crude oil prices have dipped below $64 per barrel and look set to mark a third straight month of declines. A strengthening dollar and reports that OPEC+ is primed to announce a 137,000 barrel per day production hike on Sunday are keeping a lid on prices. The easing of trade friction between the US and China should also release some tension in the market after Donald Trump revealed that China will start to buy US energy products.
US stock futures are pointing broadly upwards today, with new record highs in sight for the major indices. Big Tech sentiment was boosted after the bell as Amazon and Apple both revealed Q3 earnings beats, prompting after-hours share prices rises of 13% and 2% respectively.”
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