Today at 7pm (UK time), the Federal Open Market Committee (FOMC) will decide what happens next to US interest rates, with the big question for markets this week being whether the FOMC will cut rates by 25 or 50 basis points. After stronger-than-expected US consumer price index data last week, many traders anticipate a 25-basis-point move, but the possibility of a bigger move has increased dramatically in recent days.
While the market weighs up the possibilities of today’s meeting, trading was quiet yesterday. However, drilling down can reveal pockets of interest. For example, the Philadelphia Stock Exchange Oil Services index rallied by 3.19% and the wider S&P 500 energy sector added 1.41% as tensions in the Middle East were raised again by an attack on Hezbollah personnel. All but one energy sector constituent finished up on the day, though Brent and WTI crude are trading down early in the European session.
The biggest mover in the S&P 500 on the upside is associated with a different sort of power. Enphase Energy added 6.31% on the session, taking its five-day gains north of 13%. The stock was lit up by the launch of new software designed to run its new home battery technology.
Hewlett Packard Enterprise was another gainer, rallying by 5.63% as the Bank of America said it was getting more bullish on the stock. The stock recently reported earnings and issued a sizeable trance of convertible bonds, though despite rallying by more than 13% in the last week, it remains down by almost 16% over the last three months.
There weren't any significant fallers in the US blue-chip index apart from consultancy Accenture, which fell by 4.82% as Bloomberg reported that management had delayed internal promotions by six months. The firm lowered its outlook twice in 2024, and the news was seen as a bad omen which went against the recent trend in the stock.
In Europe, payments group Adyen rebounded from Monday's fall, rallying by 3.9%. Agri-chemicals giant Bayer added 2.8% and fellow Dax members BASF and Siemens rose by 1.9% and 2.1% respectively.
At a sector level travel and leisure stole the show, bouncing by 2.8%, helped in no small part by a 6.1% rise from low-cost airline Ryanair, which reported better momentum in bookings and less discounting of fares. However, CEO Michael O’Leary said it was still possible that profits may be down slightly this year.
Bourses in mainland Europe opened flat this morning. Gold and silver are modestly lower, while copper has yet to make up its mind. Turning to the softs, sugar and coffee rose by 4.07% and 2.92% respectively, and are now up by 11.05% and 7.99% on the month.
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