Gloomy tone prevails across markets
|In mid-morning trading, the FTSE 100 is down 50 points, while oil prices are steady ahead of the OPEC decision.
The reversal in US markets last night has taken Europe down too, and despite some hopes of a bounce just after the open the overall tone remains gloomy. The bounce of Wednesday’s European session is now a distant memory, as the discovery of US cases of the new variant show that the spread of this new enemy has already begun. Now the issue becomes one of mitigation, and here the policy responses may yet provoke a further short-term hit to equities. A gloomier December now looms, as risk-off trades dominate. Expectations of growth are being reined in, indicated by the fall in US Treasury yields, and global growth names like Anglo American and other miners are in retreat on the FTSE 100 once more.
It is decision day for OPEC+, but the 20%+ drop in oil since October will have likely prompted a change in thinking among the cartel and its associates. Oil prices have essentially factored in any output increase, and thanks to the drop of the past week are also now heavily discounting a reduction in global growth estimates, so if the group opt to hold steady or even throttle back on planned production increases we could yet be treated to a rebound in oil prices.
Ahead of the open, we expect the Dow to start at 34,253, up 231 points from Wednesday’s close.
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