Matt Britzman, senior equity analyst, Hargreaves Lansdown: “UK markets look set for a mildly positive start, with FTSE 100 futures pointing higher despite a dip in consumer confidence, as the GfK index slipped back to -19 in February on rising unemployment. Investors are already looking ahead to next week’s Spring Statement, but expectations are low for any policy fireworks, with lower gilt yields keeping the Chancellor comfortably on track to meet her fiscal rules. The broader backdrop remains supportive, with inflation likely to drift back towards target by spring, helping real wages, while falling interest rates should act as a tailwind for both economic growth and UK equities.
US markets took a step back yesterday, with the S&P 500 falling 0.54% and heavier losses across the tech-focused Nasdaq. The standout move came from Nvidia, which fell 5.5% despite delivering blockbuster results. This looks less like bad news and more like sky-high expectations colliding with some classic “buy the rumour, sell the news” behaviour. Around earnings season, short-term traders, hedge funds, and fast-moving algorithms tend to dominate the action, creating plenty of noise. Long-term investors are usually better off looking through this kind of volatility. Nvidia’s slide also weighed on much of the semiconductor sector, dragging chip stocks lower across the board. Software stocks enjoyed a rare moment in the sun as some of the recent rotation out of that space unwound slightly – nothing dramatic, but another subtle signal that the bottom may have been found.
US fintech giant Block was in focus after announcing a hefty 40% cut to headcount, a move that immediately unlocked major guidance upgrades as more work is shifted to AI at a lower cost. It’s reignited the debate around AI-driven job displacement – and that concern is very real. But there’s another angle worth keeping in mind. CEO Jack Dorsey has a reputation for running organisations a little on the heavy side, and history offers a clue here: when Elon Musk took over Twitter in 2022, he slashed headcount by around 80% and the platform kept running. In Block’s case, this looks like a mix of AI efficiency gains and an overdue clean-up of corporate bloat.
Oil prices steadied, with Brent holding just below $71 a barrel after a choppy session. Ongoing US-Iran nuclear talks offered a hint of progress, but mixed signals from both sides and lingering geopolitical tensions kept traders cautious. Attention now turns to Sunday’s OPEC+ supply meeting, with worries about an emerging oil glut hanging over the market. Taken together, it leaves oil heading for a softer week, with uncertainty doing most of the price-setting.”
|
