Market Comments

Heading into the close the FTSE 100 is little changed, up just three points after a storm of US figures.

UK markets
----------------
The FTSE 100 has spent the day going nowhere fast, although strength in the miners has at least meant the index has been spared any sustained period in the red. Talk of Chinese stimulus from earlier in the week is still lifting the raw materials sector, but the main interest was in BT shares as EE confirmed it was in early talks with the UK operator. TUI Travel failed to get away from the fallout from Thomas Cook’s results, with the implication from the smaller rival being that the year ahead might see a tougher trading environment. On the continent the DAX continued its run of form, showing no inclination to go lower and indeed exhibiting a distinct willingness to hold on to gains above
9900. This of course is all down to the ECB meeting next week, when the optimists hope Mario Draghi will unveil the ‘stimulus to end all stimuli’. As of tomorrow European indices are broadly on their own, and with month-end looming there is still time for some additional low-volume gains.


US markets
----------
A week that sees outperforming eurozone data and poor US figures is always going to unsettle traders, with the market unable to reconcile the sudden downturn in numbers from the world’s largest economy. Today’s pre-Thanksgiving barrage of US data kept markets on the hop but provided little good news. Still, much of the weakness can be explained away by seasonality, with the expectation being that things will improve in due course. Hewlett-Packard shares bounced back from a weak open, as the low valuation and healthy balance sheet entice in investors despite an across-the-board decline in revenues.

Commodities
-----------
Gold’s rally has been stalled below $1200 for three sessions already and today doesn’t appear to be any different. It seems talk of ECB QE can only go so far in lifting the metal. The longer it remains stuck just shy of this big round number the greater the likelihood that sellers will seize the chance to put the gold bulls to flight once again. In oil, the market appears to be broadly confident that the OPEC meeting will end without a decision on cutting back production. With both Brent and US light crude probing their lows for the month a fresh leg down looks to be on the cards if OPEC cannot get its house in order.

FX
--
The pound has spent the day slowly waking up to the idea that the UK’s third-quarter GDP figures were actually quite reasonable. While yesterday’s US GD P figure was revised sharply higher, the UK number failed to produce much excitement. However, dollar weakness in the aftermath of the swathe of disappointing figures on jobless claims and durable goods meant that the pound was able to eke out some gains, even if the territory above $1.58 proved to be a step too far.