The FTSE 100 was marginally higher on Monday ahead of a busy week of economic data, an interest rate decision and corporate updates in the US.
London’s leading index has been largely detached from a strong rally in US stocks so far this year but that could all change this week with a raft of globally significant events.
Microsoft, Google-owner Alphabet, Meta, and Amazon will all report this week. These are the largest companies in the world with the potential to set the tone, not only for US equities but for broad global indices.
In addition, the Fed’s highly anticipated interest rate decision and accompanying commentary will be released on Wednesday, providing 2024’s first official insight into the thinking of the world’s largest economy’s central bank on the trajectory of interest rates. Some market participants expect a dovish pivot that could fire up equity bulls.
On Friday, US Non-Farm Payrolls are expected to reveal the US economy added 180,000 jobs in the last month. A significant deviation from the consensus number will either confirm what the Fed says on Wednesday or throw it up in the air entirely.
With a packed schedule of major events in the week ahead, the FTSE 100 was pretty muted on Monday and was up just 1 point at the time of writing at 7,636.
Oil majors BP and Shell helped offset weakness in housebuilders, banks and consumer stocks. Fresh escalation in the Middle East supported oil prices and raised questions about inflation in the coming months.
“Continued attacks on vessels in the Red Sea are also making traders more skittish, with another fuel tanker targeted. Amid the escalating violence, oil prices have reached three-month highs as supply concerns rear up,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.
“Brent crude has risen above $83 a barrel, which have helped energy giants, Shell and BP make large strides in early trade.”
Fresnillo was the FTSE 100’s top gainer amid strength in precious metals prices.
This week could be pivotal for UK stocks and set the tone for the rest of Q1.
Despite the ongoing geopolitical and economic concerns, AJ Bell’s Russ Mould highlighted a general positivity among analysts rating FTSE 100 companies in early 2024.
“As we enter 2024, 59% of all analysts’ recommendations are buys and just 8% are sells for constituents of the FTSE 100, the highest and lowest scores over the past ten years, respectively. For the FTSE 350 index 62% of all recommendations are positive ratings and just 7% negative ones, again the highest and lowest percentages since 2015,” said AJ Bell investment director Russ Mould.