Market Prognosis

A concise summary of the major macro events of the past 24 hours, and selected UK company-specific news.

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December 1, 2023

OPEC+ struggles to hold the line

Macro & Overnight

The market was dismissive of the news of production cuts from the OPEC+ meeting on a volatile day for oil prices, which ultimately ended with prices lower amid increasing signs that the producer cartel is struggling to implement its supply quotas.

Non-OPEC+ supply is growing while global demand remains static. The US recorded its highest-ever oil production in September as output also increases in Brazil and Guyana.

US inflation, as measured by the core PCE data, much favoured by the Federal Reserve, was in line with expectations and lower for October.

Jay Powell speaks in Atlanta later today, which will be closely scrutinised for pivot tells.

In the EuroZone, inflation measures were sharply lower on the flash headline basis, registering at just 2.4% for November.

In the UK, house prices rose for the third straight month in November, according to lender Nationwide.

With rising real incomes and lower mortgage rates, UK housing affordability has recently improved. There is also an insufficient supply of used housing stock in many areas.

UK housebuilders have led the recent equity market recovery in the last few weeks.

UK Company News

On a typically quiet Friday for UK company news, small-cap activist Kelso received notice from THG’s CEO Matt Moulding that he now owns a 3% stake in the investment company. Kelso, a THG shareholder, has been actively seeking Moulding to demerge THG’s nutrients business to enhance shareholder value. Perhaps Moulding has decided to give Kelso a bit of its own medicine. Kelso also has declared stakes in small-cap retailers The Works and Angling Direct.

 

Prognosticator 

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