Outrageous Predictions
Executive Summary: Outrageous Predictions 2026
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London Quick Take – 15 Dec - Gold jumps and European stocks firmer before central bank meetings
Neil Wilson
Investor Content Strategist
Note: This is marketing material. This article is not investment advice, capital is at risk.
Over in the US, stocks closed lower on Friday as investors continued to exit AI plays and looked for value. The S&P 500 finished down more than 1% for the session and the Nasdaq Composite dipped 1.7% as tech stocks took a hit, with Nvidia down more than 3% and Broadcom falling 11% as chip stocks took a beating - Micron, AMD and Intel down 4-6%. Both the Dow Jones and Russell 2,000 touched intraday record highs before closing lower. Visa and Mastercard were among the winners as financials came off unscathed. Tesla somehow rose against the trend for tech weakness.
This week features some delayed US data, including on employment, retail sales and inflation, which will provide a last look at the economy before the run into the year-end. The unemployment rate will be the one to watch to show whether the Fed is correct to be so dovish.
Last week we had some clues as the Fed cut for a third time this mini cycle. Layoff announcements this year topped 1.1 million, the most since 2020 when the pandemic hit, according to Challenger. The firm said layoff plans hit 71,321 in November, down from the huge (22yr high for the month) cuts announced in October...the 1.17mn total is 54% higher than the same 11-month period a year ago and job cuts in November above 70,000 have happened just twice since 2008: in 2022 and in 2008. ADP also reported a 32k drop in payrolls. But weekly unemployment claims dropped to a three-year low, so it’s a mixed picture. The fact the October data will be missing does not help, but it’s likely that the November jobless rate holds steady at 4.4%.
European stock markets opened on the front foot Monday as investors look ahead to a key week for central banks. The FTSE 100, DAX and CAC all pushed up early doors ahead of decisions this week from the Bank of England, ECB and BoJ. Gold trades sharply higher above $4,345, closing in on its all-time high as the macro backdrop turns supportive with the Fed cutting again and we could see a year-end run higher, while Bitcoin is back off below $90k - always weak at this time of year. On the FTSE 100, Endeavour Mining and Fresnillo were among the top risers with gold prices higher.
We’re going to get some diverging policy decisions this week. The Bank of England will cut, the Bank of Japan will hike, and the European Central Bank will hold rates steady. All three decisions are firmly expected so shouldn’t spook the horses.
The BoE cut is anticipated, but there is a little more doubt around what is going to happen next year. There is a sense that it's close to the end of this easing cycle, but my hunch is that it goes deeper than the market currently thinks. Sterling is at a key level with cable holding just above its 200-day moving average at 1.3340.
We’re going to get some diverging policy decisions this week. The Bank of England will cut, the Bank of Japan will hike, and the European Central Bank will hold rates steady. All three decisions are firmly expected so shouldn’t spook the horses.
The BoE cut is anticipated, but there is a little more doubt around what is going to happen next year. There is a sense that it's close to the end of this easing cycle, but my hunch is that it goes deeper than the market currently thinks. Sterling is at a key level with cable holding just above its 200-day moving average at 1.3340.
Over in the US, stocks closed lower on Friday as investors continued to exit AI plays and looked for value. The S&P 500 finished down more than 1% for the session and the Nasdaq Composite dipped 1.7% as tech stocks took a hit, with Nvidia down more than 3% and Broadcom falling 11% as chip stocks took a beating - Micron, AMD and Intel down 4-6%. Both the Dow Jones and Russell 2,000 touched intraday record highs before closing lower. Visa and Mastercard were among the winners as financials came off unscathed. Tesla somehow rose against the trend for tech weakness.
This week features some delayed US data, including on employment, retail sales and inflation, which will provide a last look at the economy before the run into the year-end. The unemployment rate will be the one to watch to show whether the Fed is correct to be so dovish.
Last week we had some clues as the Fed cut for a third time this mini cycle. Layoff announcements this year topped 1.1 million, the most since 2020 when the pandemic hit, according to Challenger. The firm said layoff plans hit 71,321 in November, down from the huge (22yr high for the month) cuts announced in October...the 1.17mn total is 54% higher than the same 11-month period a year ago and job cuts in November above 70,000 have happened just twice since 2008: in 2022 and in 2008. ADP also reported a 32k drop in payrolls. But weekly unemployment claims dropped to a three-year low, so it’s a mixed picture. The fact the October data will be missing does not help, but it’s likely that the November jobless rate holds steady at 4.4%.
Read my look at some ideas for 2026 here.
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