London’s market is set for a stable session after yesterday emerging that US policymakers are prepared to ease huge economic support before the end of the year.
The latest Federal Reserve minutes and September US inflation data failed to destabilize Wall Street, meaning the FTSE 100 index is expected to open up 35 points.
While there is no easing of the prevailing inflationary pressures, both Brent crude oil and natural gas prices have been rising overnight. In corporate news, Dunlam said recent sales growth has been encouraging as it stuck to the growth in the city’s recent profit forecast.
Wall Street Earnings
Banking giant JPMorgan Chase got off to a strong start to Wall Street’s third-quarter earnings season yesterday when it delivered forecast-beating results prompted by a recent surge in M&A activity and the issuance of more debt loss reserves.
Net income rose 24% to $11.7 billion, aided by a 30% increase in revenue in its investment banking and markets division.
Chief Executive Jamie Dimon said: “JP Morgan Chase delivered strong results as the economy continues to grow well – despite the impact of the delta variance and supply chain disruptions.”
Shares are up 28% so far this year, but closed more than 2% cheaper yesterday amid weak performance in the banking sector.
Bank of America, Citigroup and Morgan Stanley are due to post their results later today.
European stock markets are expected to open higher this morning after a stable overnight performance in the US and Asian markets.
The focus on inflation continues as it emerged that US consumer prices rose 0.4% on a monthly basis in September, the fifth time in the past seven months that figure has come above average estimates.
Deutsche Bank senior analyst Jim Reid said the CPI release only added to speculation that the Federal Reserve may be forced to hike rates earlier than previously estimated.
He added: “Investors are now pricing in about four hikes through the end of 2023, which is more than a greater increase than the pricing a month ago.”
Gold’s traditional inflation hedge posted its strongest daily performance since March, making panic in the overnight markets evident.
China overcame an overnight inflation trend with official data showing a fall in the annual rate to 0.7% from 0.8% in September. However, this was offset by a 10.7% rise in the producer price index, the highest since record, indicating that inflationary pressures remain in China’s value chain.
Oil prices turned higher overnight, leaving Brent crude futures at $83.73 and West Texas crude at $80.96.
The increase came despite OPEC’s monthly oil market report revising its forecast for world oil demand this year. European natural gas prices also rose 9% as they continue to ease some of the declines following Vladimir Putin’s intervention last week.
According to CMC Markets, the FTSE 100 index is expected to open 35 points higher at 7,176.