Proactive Investors -
- FTSE 100 down 55 points at 8262
- Shop price inflation 'back to normal' says BRC
- Intermediate Capital hits all time high on results
US stocks open mixed
Wall Street stocks have mostly opened higher, though the Dow Jones is down 0.25% as health stocks weigh.
The Nasdaq Composite is up 0.2%, led by a near-5% Nvidia (NASDAQ:NVDA) rise for Nvidia, while the S&P 500 is flat, having traded higher initially.
Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOGL) and ASML (AS:ASML) are in the green, but they are the only ones in the Nasdaq's top 15.
Election influence for markets?
Last week's general election news is not likely to impact monetary policy but investor confidence could be influenced by changes in opinion polls, says UBS.
Markets have been pretty indifferent to the PM's rain-sodden announcement, but this is not expected continue up to polling day.
"There are certainly a few things that could get investors excited," says UBS economist Dean Turner. "The first of these will be the opinion polls.
"History tells us that opinions can, and often do, change quite quickly during an election campaign," he says, noting Theresa May's 2017 campaign when a 15% lead for the Conservatives all but evaporated by election day.
"If Labour’s lead in opinion polls, hovering around 20%, starts to erode, investors may start to question their current confidence in the result."
The other interesting development to watch is when the party manifestos are published, though we have a fair idea already, on economic matters.
There will not be much to separate the two main parties, the UBS economist says, with both likely to commit to sticking to the existing fiscal rules, which leaves neither of them with much room for manoeuvre and little impact on a macro perspective, he says, though there is always the potential for surprise.
"So, we should expect a lot of headlines and a few surprises over the next few weeks, but when it comes to investing in the UK markets, we still think investors should stick to fundamentals," Turner says, with the UK market rated as 'most preferred' for UBS.
"We... stick with this view as FTSE 100 companies, which generate a significant portion of their revenues internationally, should be largely sheltered from domestic political events.
"For bonds, rate cuts from the Bank of England should lead to falling yields, which is positive for bond prices."
Pension promise
More electioneering, this time a new higher 'triple lock' for pensions.
Prime Minister Rishi Sunak promised today that pensioners will never pay tax on their state pension under his government if it wins the next election.
Building on the "triple lock" introduced by David Cameron, Sunak said if he is returned to power he will also make sure the personal allowance for pensioners would increase by at least 2.5% or in line with the higher of earnings or inflation.
Labour’s shadow chancellor Rachel Reeves, who earlier revealed that more than a hundred leaders of large and small businesses have declared their support of the party's economic plans, called the scheme a "desperate gimmick".
Europe in the red, US hard to read
Like the FTSE 100, the major European indices are all in the red too, having mostly started higher. Germany's Dax is just below the flatline, while France's CAC is the worst position, down 0.6%.
Looking across the Atlantic, US markets are heading for a mixed start as they reopen after the Memorial Day holiday.
Tech stocks seem to be expected to drive the rise, with Nasdaq 100 futures pointing to a 0.2% gain, with S&P 500 futures up 0.1%, while Dow Jones futures are down 0.1%.
In the energy markets, WTI crude prices have steadied after rebounding sharply yesterday from more than three-month lows ahead of the online OPEC+ meeting next weekend.
In US data, consumer confidence numbers are due today, the Federal Reserve's Beige Book tomorrow, followed by the second reading of GDP and the trade balance on Thursday with the Chicago PMI alongside the PCE inflation reading that is seen as a key reading for the Fed as policymakers' preferred inflation measure.
"All roads this week point towards the April US core PCE print on Friday," says Deutsche Bank (ETR:DBKGn)'s Jim Reid. "You don't need me to tell you how well scrutinised this data will be and how important it is to the Fed."
Versus the previous month, PCE inflation is expected to edge down from 0.32% to 0.26%.
Trading volumes have been light for stock index futures markets, says market analyst David Morrison at Trade Nation.
"Stock indices are a touch firmer this morning, but it’s difficult to gauge investor sentiment. We’ll probably need to wait until volumes pick up later this afternoon."
EU hydrogen funding
The European Commission has approved €1.4 billion of hydrogen funding for 13 projects and 11 companies, including Airbus, BMW and Michelin (EPA:MICP).
The Hy2Move programmes aim to develop technologies and processes "that go beyond current technology and will allow major improvements notably in the areas of mobility and transport applications, fuel cells, on-board hydrogen storage and generation of hydrogen for the use in mobility and transport".
It is designed to help the EU reach its target of reducing transport emissions by 90%.
The hydrogen funding is also accompanied by a separate €1 billion healthcare project to help the discovery of drugs to treat rare diseases and cancers, which the EU estimates will unlock an extra €5.9 billion in private funding.