S&P 500 — US Large Cap Index
FTSE 100 — UK Blue Chips
Euro Stoxx 50 — Eurozone Leaders
DAX 40 — German Equities
CAC 40 — French Market Index
Nikkei 225 — Japan Benchmark
Hang Seng — Hong Kong Index
Shanghai Composite — China Mainland
ASX 200 — Australian Market
TSX Composite — Canada Index
Nifty 50 — India Large Cap
STI Index — Singapore Market
KOSPI — South Korea Index
Bovespa — Brazil Equities
JSE Top 40 — South Africa Index
IPC Index — Mexico Market
Key takeaways
- Airtel Money makes its London debut in the largest IPO since 2021 with a £5.3bn valuation.
- Oil prices decline 1.4% to around 102 USD per barrel after political updates regarding Iran.
- US Treasury yields drop following oil price declines and economic adjustments.
- OpenAI reports lower revenue estimates of 70bn USD, triggering a sell-off in tech stocks.
- SpaceX enters the mobile carrier business, putting downward pressure on US telecom shares.
Risk appetite is improving as we reach the end of the week. The oil price is lower by 1.4%, and Brent crude is trading around $102 per barrel. Relief in the oil price came after President Trump reversed his former position and said that he won’t bomb Iran before the US midterms. Airtel Money is London’s biggest IPO since 2021 This is not the only good news, the FTSE 100 is set to rise later this morning, as mobile payments firm Airtel Money is set to make its debut on the LSE later today. This is expected to be the largest London IPO since 2021, and the company is valued at £5.3bn, which is big enough for it to be included in the FTSE 100. It is hoping to raise £529mn from the listing.
This will be a key test for the London market, and hopes are high that this will revitalise London’s position as a hub for corporate listings. The company will trade freely from next week, but initial indications look like demand for Airtel Money is strong. Trump poses major risk for 2027 With the Midterm elections now less than a month away, news that Trump won’t bomb Iran over the next 4 weeks is unlikely to soothe investors for long, as bombing could resume into 2027. This is now a major risk for the new year. Oil and Bond market relationship remains strong However, the decline in the oil price, which peaked at $105.75 on Thursday, did push bond yields lower.
The 10-year US Treasury yield dropped sharply. It had traded as high as 5.35%, and is now trading around 5.22%. Early trading on Friday suggests that the bias remains lower for bond yields. Will the UK 30-year bond close the week above 6%? There have been some wild swings in bond yields in the US, UK and Europe this week. On a weekly basis, French, Italian and US yields are lower, UK yields have risen over the week and the 30-year yield is hovering around 6% as we move towards the end of the week. A weekly close above this level could add to fiscal concerns in the UK, and BOE governor Andrew Bailey gave a guarded warning to the chancellor about extra spending commitments ahead of the Budget in a speech on Thursday evening. OpenAI jolts the tech stock rally Stocks were under pressure on Thursday, and tech stocks sold off sharply.
The Nasdaq declined more than 1%. This was led by the chip makers, which fell more than 3%. The decline was down to OpenAI’s latest annualised revenue figures. It announced that revenues would be $70bn for this year, driven by enterprise sales. This is $20bn less than some previous estimates. AI trade scepticism never seems to last for long The revenue estimate spooked the market late on Thursday, as questions about the sustainability of the AI capex boom came into focus ahead of earnings season. However, as we have seen since the summer, the AI trade is attracting waves of inflows coupled with waves of outflows in recent months. Although there is some scepticism about the scale of the AI build out, the costs involved and whether the payoff will be big enough to justify the spend, it never lasts for long. The scepticism over OpenAI’s revenue might evaporate on Friday, and US equity futures are pointing to a higher open later today.
However, signs of cooling AI growth and a fall in Treasury yields could trigger a rotation back into cyclical sectors of the stock market, allowing non-tech names the chance to play catch up. Delta earnings in focus As we move to the end of the week, the focus is likely to shift to earnings season. Delta Airlines will kick things off today, and the market expects the company to report Q3 revenue of $18.92bn.
Delta’s report will be an important read on consumer strength, especially the high end consumer, and how companies are coping with higher energy and fuel costs. Mobile operators face trouble from SpaceX There was also news from SpaceX, after it announced that it was moving into the mobile carrier business. This is weighing heavily on the share prices of US mobile providers such as AT&T, Verizon and T Mobile. T Mobile’s share price was down nearly 7% in the post-market trading on Thursday night, and the market sees SpaceX as a formidable competitor. It will be worth watching to see how European mobile providers are affected by this news. Deutsche Telecom, Vodafone, Orange, and Telefonica will be in focus today.
