11 January 2024
If you are covering the latest news in financial markets, please find below a comment from Lindsay James, investment strategist at Quilter Investors:
“Providing further evidence of a good festive period for the UK’s food retailers, M&S and Tesco today both announced strong trading updates with the latter upgrading their expectations for the full year, supporting expectations for a modestly positive UK GDP result in November and reversing the 0.3% contraction seen in October. Comments from Andrew Bailey on Wednesday to a Treasury Committee session saw him adopt a slightly different tone to recent exchanges, cheering the big drop in market interest rates in recent months, which are bringing down the cost of mortgages, in perhaps an early signal of a dovish pivot. He also noted events in the Red Sea were a growing risk due to the extent of oil and LNG which transits Suez, although recent oil and gas price declines have so far been helpful in the fight against inflation.
“Across the Atlantic, and after a false start earlier in the week due to a hacked X account, the SEC approved the first spot bitcoin ETFs in what could prove to be an important milestone. It appeared to have been done somewhat begrudgingly following lawsuits, with the SEC Chair issuing a statement to clarify that whilst certain bitcoin ETP (exchange traded product) shares had been approved, bitcoin itself had not been. However in working with providers which include giants such as BlackRock and Fidelity, this will ultimately lower trading costs whilst improving liquidity, and will see numerous product launches now follow suit. For investors, however, Bitcoin remains an incredibly speculative product subject to sharp sentiment-driven price swings. This decision from the SEC could bring about fresh volatility in the price of Bitcoin whilst the significant number of risks associated with wider cryptocurrencies remain unresolved.”
