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London Quick Take - Tuesday - Oil dips, equities rise and upbeat tech vibes ahead of Fed meeting
Neil Wilson
Investor Content Strategist
Note: This is marketing material. This article is not investment advice, capital is at risk.
Equities
Diploma shares shot +17% higher on a bumper upgrade to its full-year 2026 guidance. The company today said trading remains very strong, as its forecast organic revenue growth increased to 9% from 6%.
Risk sentiment is positive with equities rising for a third day – oil prices rangebound, upbeat tech vibes from Nvidia’s AI event, bond yields down in the last couple of sessions ahead of the central bank smorgasbord with Fed, ECB, BoE, BoJ, BoC and SNB all in action today and tomorrow.
The FTSE 100 added about a quarter of a percent early doors, now trades above 10,400, about 200pts above the lows of Friday, with the DAX and CAC each about +0.5% this morning. Wall Street climbed Tuesday with the S&P 500 +0.25% with Energy leading gains and now +4% MTD, Nasdaq +0.5%, and tech helped push Asia broadly higher overnight.
Oil prices were down with Brent in the $012-103 range as Iraq said it’s resume oil exports via Turkey. Iraq’s Kirkuk fields has resumed pumping oil via Turkey’s Ceyhan port at a rate of 250,000 bpd – a drop in the ocean – Iraq's production is at about a third of where it was before the war - but still another positive headline relative to the simmering war. It's still all about the Strait of Hormuz and increasingly it looks like Trump is going it alone. France says it could help but only once the shooting stops. That isn't happening soon with Iran launching a flurry of "retaliatory" attacks against the US overnight.
Broadly, equities are bouncing off levels because oil looks to be stabilising, with Brent basically trading a $10 range since March 11th between $95 and $105. Crude spiked spiked aggressively but has failed to hold the move to $120 let alone extend higher...Intraday pullbacks suggest immediate physical worries are not materialising yet and so stock markets are breathing easier as energy shock impact fades. Why oil has stabilised is another question - we see oil on water rapidly depleting and signs of pressure on refining margins with Iran continuing to step. Remember $100 oil is still stagflationary, but equities had already to some extent adjusted.
Vibes: Chinese AI stocks including some of the less-known names MiniMax and Knowledge Atlas Technology soared after upbeat comments from Nvidia CEO Jensen Huang on OpenClaw, which is an open-source AI agent popular in China. He said it was definitely the next ChatGPT”. Alibaba shares are up 3% pre-mkt in the US.
Fed Day – lame duck Fed chair, a war in the Middle East, a president screaming for rate cuts...hard to really get much of a steer today from the FOMC meeting. Strong consensus the Fed holds rates in the 3.50-3.75% range, but we wonder if it could revise up forecasts for unemployment and inflation give the situation in the Middle East. The war likely delays rather than stops rate cuts. Rather like the BoE and ECB (although their reaction is immediately to talk about hikes), the answer to a supply shock is not via monetary policy – unlike in 2022 this supply shock has not coincided with a post-pandemic surge in demand. In December the FOMC members pencilled in a rate cut in 2026 and 2027 but they could remove the 2026 cut - but do the dots work anymore? Given the backdrop it's going to be hard to have any conviction and Powell cannot easily guide the market beyond the end of his tenure after the April meeting. Markets indicate the Fed won't be looking to cut until September at the earliest.
The FTSE 100 added about a quarter of a percent early doors, now trades above 10,400, about 200pts above the lows of Friday, with the DAX and CAC each about +0.5% this morning. Wall Street climbed Tuesday with the S&P 500 +0.25% with Energy leading gains and now +4% MTD, Nasdaq +0.5%, and tech helped push Asia broadly higher overnight.
Oil prices were down with Brent in the $012-103 range as Iraq said it’s resume oil exports via Turkey. Iraq’s Kirkuk fields has resumed pumping oil via Turkey’s Ceyhan port at a rate of 250,000 bpd – a drop in the ocean – Iraq's production is at about a third of where it was before the war - but still another positive headline relative to the simmering war. It's still all about the Strait of Hormuz and increasingly it looks like Trump is going it alone. France says it could help but only once the shooting stops. That isn't happening soon with Iran launching a flurry of "retaliatory" attacks against the US overnight.
Broadly, equities are bouncing off levels because oil looks to be stabilising, with Brent basically trading a $10 range since March 11th between $95 and $105. Crude spiked spiked aggressively but has failed to hold the move to $120 let alone extend higher...Intraday pullbacks suggest immediate physical worries are not materialising yet and so stock markets are breathing easier as energy shock impact fades. Why oil has stabilised is another question - we see oil on water rapidly depleting and signs of pressure on refining margins with Iran continuing to step. Remember $100 oil is still stagflationary, but equities had already to some extent adjusted.
Vibes: Chinese AI stocks including some of the less-known names MiniMax and Knowledge Atlas Technology soared after upbeat comments from Nvidia CEO Jensen Huang on OpenClaw, which is an open-source AI agent popular in China. He said it was definitely the next ChatGPT”. Alibaba shares are up 3% pre-mkt in the US.
Fed Day – lame duck Fed chair, a war in the Middle East, a president screaming for rate cuts...hard to really get much of a steer today from the FOMC meeting. Strong consensus the Fed holds rates in the 3.50-3.75% range, but we wonder if it could revise up forecasts for unemployment and inflation give the situation in the Middle East. The war likely delays rather than stops rate cuts. Rather like the BoE and ECB (although their reaction is immediately to talk about hikes), the answer to a supply shock is not via monetary policy – unlike in 2022 this supply shock has not coincided with a post-pandemic surge in demand. In December the FOMC members pencilled in a rate cut in 2026 and 2027 but they could remove the 2026 cut - but do the dots work anymore? Given the backdrop it's going to be hard to have any conviction and Powell cannot easily guide the market beyond the end of his tenure after the April meeting. Markets indicate the Fed won't be looking to cut until September at the earliest.
Equities
Diploma shares shot +17% higher on a bumper upgrade to its full-year 2026 guidance. The company today said trading remains very strong, as its forecast organic revenue growth increased to 9% from 6%.
Prudential launched a £1.2bn buyback and raised its dividend 15% to 26.60 cents per share. New business profit at $2.78 billion, ahead of forecast $2.75 billion, with margins at 42% also ahead of consensus.
Yesterday in the US of note - Delta jumped 6.6% and American Airlines gained 3.5% after both raised current-quarter revenue guidance, Uber rose 4.2% on plans to roll out robotaxis in 28 cities using Nvidia software, and Blackstone climbed 4.6% as financials recovered from last week’s private-credit scare. Lemonade jumped almost 16.0% after a Morgan Stanley upgrade, Western Digital rallied 9.6% on a stronger earnings outlook, and Swarmer surged 520.0% in its Nasdaq debut after pricing its IPO at $5 a share. Rocket Lab jumped 10% on a $1bn placing before retreating 5%. Today Micron, Jabil, General Mills and Macy's report earnings.
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