NFP to pull the trigger for Fed, Miners now a barometer for the FTSE 100

David Buik, Senior Market Commentator for Panmure Gordon, joined Nick Batsford and Zak Mir on the Tip TV Finance Show to discuss a widespread macro outlook including views on the Fed and the strong NFP number, the miners and China, as well as Vodafone and ITV.

Fed focusing on the US, not the rest of the world

Buik noted that the extraordinary non-farm payroll number released last Friday may indeed pull the trigger for the Federal Reserve on a US interest rate hike, with the bond market showing a 70% chance for rates to rise in December. He continued that the US is very strong, yet the global economy around it is weak, including the suffering emerging markets as a result of USD strength. However, Buik commented that weakness outside the US isn’t a problem, as both Fischer and Yellen have spoken only about the US, and they are not concerned with the rest of the world. He concluded that the Fed should go ahead with a December hike, even if Yellen has to detract the rate rise in February.

Miners won’t pick up as long as China is weak

Buik outlined that the miners have become a barometer of the FTSE 100, with a major concern for Buik being the BHP disaster in Brazil, which he believed to be another nail in the resources and minerals coffin. He continued that China will be the catalyst for miners to pick up, but at the moment we are seeing weak data, and this may continue tomorrow with Chinese retail sales and manufacturing data being released.

Good results for ITV, Vodafone in trouble

Buik finished on the media and mobile arena, and in terms of IT, he expressed that they have had good results and are doing well, but are in the need of new blockbuster programmes following the end of Downton Abbey and the poor performing X Factor. When concerning Vodafone, he highlighted the management are asleep at the wheel and the stock is as dull as dishwater.