ECB cuts rates, Taylor Swift tour set to fire up UK earnings and Nvidia share rally halted by antitrust chatter

“The big rate cut news is finally here. The ECB has slashed the cost of borrowing for the first time in nearly five years, firing the starting gun on looser monetary policy and putting pressure on the Bank of England and Federal Reserve to do the same in the UK and US respectively,” says Dan Coatsworth, Investment Analyst at AJ Bell.

“Markets were already anticipating a rate cut from the ECB, hence why we haven’t seen the mother of all equity rallies. However, it’s a step in the right direction and has helped to keep investor sentiment positive.

“Investors are constantly thinking about the next step and now we’ve had the ECB’s first cut, the narrative shifts to when the next one might happen and how deep it could be. That is going to remain a guessing game as the ECB has kept schtum on any plans to follow a particular rate path, saying future decisions will be data dependent.

“All eyes have shifted to the US where new data theoretically increases the chances of the Fed cutting rates. Weekly jobless claims are up more than expected, implying the labour market isn’t as tight as previously thought, thus giving the Fed less of a reason to sit on its hands.

“While it may not be enough to convince the Fed to cut at next week’s interest rate meeting, a few more data points like this one would strengthen the argument that we’re slowly edging towards the point where the central bank will pivot.”

Taylor Swift

“Swiftonomics is in full motion as superstar Taylor Swift prepares to kick off the UK leg of the Eras Tour in Scotland on Friday. Suggestions she might be responsible for a near-£1 billion boost to the UK economy could prove to be an understatement.

“Anecdotal evidence from studying social media groups dedicated to the UK tour implies a large chunk of the crowd are coming from overseas, particularly the US, as it’s often cheaper for them to travel and see the musician on these shores than their homeland.

“Overseas visitors might use the occasion to conduct their own tour of the UK, so it’s not just Taylor Swift’s juggernauts going up and down the country. That extra injection of spending on food, accommodation and leisure activities, potentially across multiple days, implies an extra cash injection into the economy beyond activities purely linked to a concert such as tickets, food, drink and merchandise.

“Stock market names like Premier Inn-owner Whitbread, pubs group Wetherspoons and British Airways’ parent International Consolidated Airlines are among the companies primed for a boost in customers. Management teams may have already left a ‘Blank Space’ in the draft of their next results to complete with Swift-related comments once they’ve totted up the takings.”

Nvidia

“After a stellar session yesterday, the Nasdaq failed to sustain momentum and paused for breath, with AI darling Nvidia doing the same.

“Being caught up in a potential antitrust probe doesn’t help the chip giant. Reports that the US Justice Department and Federal Trade Commission are moving forward with antitrust investigations into the dominance of Nvidia, OpenAI and Microsoft in the artificial intelligence industry is something to watch closely.

“An industry taking the world by storm is naturally going to attract attention, good and bad. With clear winners in the AI space, the authorities will want to ensure there is fair competition.

“Therefore, investors will need to consider the prospect of tighter regulation and its potential impact when they pay lofty valuations for many industry-leading firms, even if they have more than enough cash on their balance sheets to fund any fines.”

These articles are for information purposes only and are not a personal recommendation or advice.