8.31am: Market moves
Losses for the S&P 500 last night took the index below what’s often viewed as an important technical threshold for the first time in 139 trading sessions, points out Jim Reid, macro strategist at Deutsche Bank, talking about the index’s 50-day moving average.
“That was the longest such run since 2007,” he says, adding that AI weakness was “a key driver” that sent the Philadelphia Semiconductor Index 1.55% lower, while also being a day of broad weakness, with 407 decliners within the S&P 500, the most in five weeks.
The small cap Russell 2000 (down 2%) and the equal-weighted S&P 500 (down 1.3%) both fell to their lowest levels since August, he also points out, while the Mag 7 group had a better day mostly thanks to Alphabet rising 3% on news that Berkshire Hathaway took a stake in the company last quarter.
“In addition to the AI concerns, the risk-off tone was reinforced by the latest signals from the Fed, as investors continued to price out the likelihood of a December rate cut. Futures now imply just a 41% probability, down from 43% on Friday – with the highest rate priced for the December contract since late August.”
Reid also flags that the sell-off in Asia, led by Korea’s Kospi and Japan’s Nikkei, both down around 3%.
“Japanese long-bonds continue to sell-off as markets fear a larger-than-expected supplementary budget later this week from the new Takaichi administration.”
8.15am: FTSE plunges at open
The FTSE 100 plunged over 107 points in the first trades of the day, but has already seen those losses pared somewhat, down 87 points to 9,588, taking the index back to where it was three weeks ago.
Miners are leading the slide, with precious metals diggers Fresnillo and Endeavour down 6% and 3.7% as gold and silver take another small step back from recent highs.
Anglo American, Antofagasta and Glencore are all down over 3%, with Rio Tinto down 2%.
Financials, including Schroders, Barclays and HSBC, and oil giants Shell and BP are also weighing.
Meanwnile, Bitcoin has also plunged to its lowest level in seven months as investors shy away from risk, dipping below $90k overnight and back above that now, while still down 5.2% over the past 24hrs.
7.57am: CMA probes launched
The UK competition watchdog has launched enforcement action against eight companies, including Viagogo, StubHub, AA and BSM driving schools, Marks Electrical Group PLC (AIM:MRK) and Wayfair Inc (NYSE:W), over misleading prices and illegal pressure selling online.
A major consumer protection initiative was launched by the Competition and Markets Authority (CMA) using new powers granted by the Digital Markets, Competition and Consumers Act that was passed into law last year.
The regulator has opened investigations into the eight firms, which also includes Viagogo parent StubHub, Appliances Direct and Gold’s Gym, and focused on potential breaches such as drip pricing, misleading countdown timers, and default opt-in charges.
The CMA has also sent advisory letters to 100 firms across 14 sectors, warning them to review their practices. These include companies in travel, ticketing, retail, fitness, and food delivery.
7.40am: No surprises with Imperial numbers
Imperial Brands PLC’s (LSE:IMB) new chief executive, Lukas Paravicini, who started on 1 October, reports his first set of final results, including an increased £1.45 billion share buyback and dividend up 4.5%.
But these were already known thanks to an update last month, while the long-term strategy was shared under his predecessor back in March.
Paravicini said: “Our consistently strong operational and financial delivery provides a firm platform on which to build as we embark on the next phase of our strategy.”
Our performance in FY25 adds to our track record of consistent growth, demonstrating the sustainability of our tobacco business and the exciting growth opportunities in next generation products.”
He added: “During the next strategic period, we will evolve the distinctive challenger approach which has underpinned our recent success. This means we will continue to invest in consumer insights, innovation and marketing capabilities. We will also continue to make deliberate, focused choices about which opportunities we pursue, and develop a simpler, more efficient and more agile organisation.”
7.15am: FTSE set to plunge as global sell-off deepens
The FTSE 100 is predicted to plummet at the open on Tuesday.
A 135-point plunge is being called on the futures market for the London index, more of a scream than yesterday’s whimper when the index fell 22.9 points to close at 9,675.43.
Overnight on Wall Street, US stocks extended a three-day slide as investors grew uneasy about the Federal Reserve’s next move and braced for a pivotal week of economic and tech-sector news.
The Dow Jones fell 1.2%, the S&P 500 dropped 0.9% and the Nasdaq slipped 0.8%.
Asian markets are bathed in red this morning, with Japan’s Nikkei plunging 3.2%, and Hong Kong’s Hang Seng diving 2.1%.
Here’s market analyst Ipek Ozkardeskaya at Swissquote with a summary of why: “All of a sudden, economic data pointing to slowing economies and rising debt is making investors increasingly uncomfortable — and with good reason.
Ozkardeskaya notes that Japan’s economy printed its first quarterly contraction in six quarters; while China’s property crisis lingers, while consumer spending remains weak and a 25% drop in shipments to the US “is difficult to replace in the short run”; European growth “continues to limp along — military-spending boosts don’t yet show up in headline GDP”, and even Switzerland is not immune, with a contraction in growth and rare strikes by public sector workers.
“The good news is, all of the economic angst doesn’t automatically translate into poor investor sentiment. Markets run on different vibes — and slowing fundamentals don’t always spook risk appetite,” she says.
“The bad news is that some of the more bullish vibes — AI enthusiasm, massive government stimulus, dovish central-bank expectations — are starting to fade.”
