Derren Nathan, head of equity research, Hargreaves Lansdown: “The FTSE 100 is once again showcasing its merits as an attractive venue for investors seeking stability. It’s flat at today’s open, barely changed over the week and remains within touching distance of its all-time high. Key movers of note this morning are airline conglomerate IAG which flew slightly under third quarter sales estimates, and ITV which is up after entering preliminary discussions to sell its media and entertainment arm to Sky’s parent Comcast. This week’s FTSE performance is a sharp contrast to the main US indices which have been in negative territory every day this week. Yesterday’s session saw a slide in the share prices of six of the Magnificent Seven. However, the move needs to be viewed in the context of strong year-to-date gains with all major benchmarks still well ahead of where they were in January, and investors can’t be blamed for taking a few chips off the table in the face of worsening jobs numbers.
Official economic data has been thin on the ground as the longest US government shutdown in history rolls on. But Challenger, Gray & Christmas showed a big spike in October job cuts to 153,074, the largest monthly number in 20 years. The flip side could be more support for accelerated US rate cuts, but for now investors are looking on the downside, with the CNN fear and greed index sitting in ‘extreme fear’ territory at 24, close to a six-month-low.
For those brave enough to stomach market gyrations, that could present opportunities. Qualcomm was the latest tech name to provide evidence that demand for semiconductors remains robust. The chip designer beat forecasts for the fourth quarter, with guidance also topping estimates. It’s not been a frontrunner in the AI race but is refocussing its attention on the space.
CEO Cristiano Amon thinks the AI opportunity may be underestimated despite the wall of cash being deployed in the build out. He draws parallels with 1999 expectations for the internet which has become more omnipresent than anybody could have imagined at the turn of the century. That time comparison however is also a stark reminder of the dot.com crash. The big names that have driven market gains in recent years are matching the rhetoric with real sales and profit growth backed by enviable financial firepower. Qualcomm however still has a lot to prove if its to have a seat at the table, and fearful investors backed away from the stock yesterday despite the financial progress.
Brent crude oil prices are up around 1% at close to $64 per barrel but remain on track for a second weekly decline in the face of supply concerns with output on the increase across a wide spread of nations, with lower-than-average demand growth expected to persist into 2026.”
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