HL commentary as it happens

Brent crude on track for a second weekly decline

Brent crude oil prices are up around 1% at close to $64 per barrel but remain on track for a second weekly decline in the face of supply concerns with output on the increase across a wide spread of nations, with lower-than-average demand growth expected to persist into 2026.

FTSE 100 steady and US stock futures tick up

The FTSE 100 is once again showcasing its merits as an attractive venue for investors seeking stability. It’s flat at today’s open, barely changed over the week and remains within touching distance of its all-time high.

This week’s FTSE performance is a sharp contrast to the main US indices which have been in negative territory every day this week. Yesterday’s session saw a slide in the share prices of six of the Magnificent Seven. However, the move needs to be viewed in the context of strong year-to-date gains with all major benchmarks still well ahead of where they were in January, and investors can’t be blamed for taking a few chips off the table in the face of worsening jobs numbers.

Official economic data has been thin on the ground as the longest US government shutdown in history rolls on. But Challenger, Gray & Christmas showed a big spike in October job cuts to 153,074, the largest monthly number in 20 years. The flip side could be more support for accelerated US rate cuts, but for now investors are looking on the downside, with the CNN fear and greed index sitting in ‘extreme fear’ territory at 24, close to a six-month-low.

US government shutdown in record territory

As well as valuation fears, the US grappling with a nation in shutdown – now the longest in US history. And while it has yet to impact markets in any meaningful way, consumers are being affected. As well as public sector workers not receiving pay, one key impact is travel disruption. The US is nearing peak travel period, with Thanksgiving later this month. Listed airlines are likely to see share prices fall should flights be cancelled en masse. The stalemate also adds to macroeconomic concerns regarding the attractiveness of the US to do business and invest new money – potentially benefiting Europe in a best-of-the-rest trade.

Stock markets have fallen on AI concerns

Halloween may be over, but markets are feeling spooked over AI stock valuations fears. Overnight, the S&P 500 fell 1.18% and the Nasdaq pulled back 1.84%, as Wall Street giants including Morgan Stanley and Goldman Sachs warned that AI stocks were in bubble territory. The negative momentum rippled through Asian markets in the early hours this morning, with Bloomberg estimating a total of $500 billion wiped off semi-conductor stock valuations globally.

The concerns are valid. While a number of AI firms have benefits from strong revenue and profit growth, this has been a narrow and extreme rally. Earlier this year, following both the DeepSeek disruption in January and the tariff tantrum in April, returns seemed to be more broad-based, with the equal weighted S&P 500 outperforming the market cap for periods. But this did not last, and once again high growth, tech biased, AI focused businesses have delivered much of the aggregate S&P 500 returns over the past six months.

Investors should use this opportunity to crystallise impressive gains and diversify their portfolios to include a range of sectors, geographies and asset classes – adding resilience to portfolios. The gold price tipping up is screaming a warning again – a siren that this rally will not last.