Most market moving like a Rolls Royce

By Jonathan Jackson. Published at Nov 11, 2020, in Market Wrap

Chris Beauchamp, Chief Market Analyst at IG, discusses what is happening in the markets.

“In mid-morning trading the FTSE 100 has powered ahead, rising 70 points thanks to gains for oil companies and Rolls-Royce.

“Huge gains for oil companies have resulted in another strong morning for the FTSE 100, as the vaccine trade continues to play out across global markets.

“BP and Shell are providing around a third of the index’s gains this morning, while Rolls-Royce enjoys yet another day in the sun with a 25% gain that has put 9 points on the FTSE 100, making a gain of around 75% for the shares since yesterday’s open.

“Also doing well today are REITs, banks and housebuilders, again benefiting from a rush into those names likely to see at least some benefit from an earlier than expected reopening of the UK and global economies.

“Previous big winners such as tech stocks are still being left out for now however, as shown by US futures, where the S&P 500, Dow and small cap Russell 2000 are once more looking much stronger than the hitherto-unstoppable Nasdaq.

“It is not just stock markets that are looking towards the time when a vaccine is available. Sterling is also in robust form despite the unemployment figures this morning, rising to two-month highs against the dollar and the euro.

Now that a vaccine is due to arrive sooner than many hoped, markets will be looking to governments around the world to extend support measures, which in the UK’s case means furlough, hoping that the chancellor will decide the cost of extending the scheme until the recovery is more firmly in place is outweighed by the hit to the economy from cutting back on support and allowing unemployment to spike.”

Stocks to watch mid-week

Here is eToro's market analyst Adam Vettese's take on what investors should look out for mid week.

Tencent Music Entertainment Group: TME is a joint venture between Chinese tech firm Tencent and Spotify to develop music streaming for the Chinese market, where its apps have more than 100 million paying subscribers. The firm, which has a US listing, has gained 28.8% in 2020 so far, behind the 63% and 83% gains posted by Tencent and Spotify themselves year-to-date. TME delivers its Q3 earnings update on Tuesday, after a recent run of quarters that have come in below expectations. Currently, Wall Street analysts heavily lean towards a buy rating on the stock.

Lyft: After rival Uber reported earnings last week that showed faster gains in its food delivery business than its ride business, Lyft will deliver its own earnings update in the US today. Lyft is only just beginning to dip its toes in the food delivery business, which has been reflected in its share price performance versus Uber. Year-to-date, the firm has lost 12% despite a 50% plus rally over the past week, versus Uber’s 62% year-to-date gain. On Monday, Lyft stock jumped 26% on the back of the Pfizer Covid-19 vaccine news, which is certain to be a key focus of its earnings call. Analysts are expecting the firm to deliver a $0.93 per share loss for Q3.

Apple event: Following the launch of its new iPhone, iPad and Apple Watch models, Apple is set to unveil its new Mac computers on Tuesday. The new laptop and desktop computers will be the company’s first powered by its own chips (built using ARM’s architecture), which are expected to be more akin to the chips found in its iPhone than a typical PC. This shift marks the end of an area for Apple, which has used Intel’s chips in its products for more than a decade.

Tickers

Dow +0.90%

S&P 500 -0.14%

Nasdaq -1.37%

FTSE 100 +1.79%

DAX +0.51%

CAC 40 +1.55%


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