The FTSE 100 was fairly flat on Monday as investors adopted a tentative approach to equities ahead of the Federal Reserve’s rate cut decision later this week.
Traders also took the latest assassination attempt on Donald Trump in its stride, with very little movement in European stocks or US futures on Monday.
“Markets have not shown any panic after yesterday’s apparent assassination attempt on Donald Trump,” said Russ Mould, investment director at AJ Bell.
“Futures prices imply a fairly muted session when Wall Street opens on Monday, while there were only minimal changes to the major equity indices in Asia and Europe.
“The key focus for investors this week is the scale of any interest rate cuts by the Federal Reserve. A quarter percentage point would be seen as the Fed starting a ‘softly, slowly’ path to easing monetary policy in light of concerns about a weaker jobs market. However, traders are increasingly focused on a bigger cut, with a 59% probability of a half-percentage point reduction at the meeting.”
Although markets were flat on Monday, one would expect volatility to pick up as we approach Wednesday’s rate decision.
The Bank of England will follow the Federal Reserve on Thursday with a decision on UK interest rates, although the BoE is thought to be taking a more measured approach to rate cutting after reducing borrowing costs by 25bps in August.
Marks & Spencer
Marks & Spencer was the top riser after RBC Markets analysts upgraded their price target to 400p, sending MKS shares 2% higher. Marks & Spencer, like the other FTSE 100 food retailers, have been on a steady yet convincing rally in 2024, and shares in the premium retailer are at the highest levels since 2017.
Phoenix Group’s uninspiring interim results sent shares down 2% and to the bottom of the leaderboard.