Yesterday, the German DAX gained 0.7%, the Swiss SMI rose 1.5% and the US S&P 500 increased 0.8%. The broad Wall Street index even had the luxury of erasing its losses from the beginning of the week and closing at a new record high of 6502 points. Risk appetite, which had shown signs of evaporating with the September blues, has returned. The sectoral breakdown of the gains does not lie: while financials had made a few forays into the defensive arena a few days ago, technology, cyclical consumption, banking and industry are once again in favour, while healthcare and utilities are back on the shelf. The Paris stock market went it alone yesterday, falling sharply because two of its five largest weightings were crushed. Sanofi's share price plummeted 8.3% after a clinical trial on a key eczema drug proved less effective than expected. LVMH ended the day down 4.2% after Jefferies said that the company's third quarter of 2025 should show some improvement, but mainly because the basis for comparison is extremely favourable after a quartus horribilis a year earlier.

Overall, investors' renewed appetite is based on the near certainty that the Fed will cut rates at the end of its meeting on September 16 and 17. Traders' forecasts rose to 99% yesterday, after two new mediocre statistics on the state of the US labour market. The data is weak enough to justify monetary stimulus, i.e. a rate cut, but not bad enough to wake up the prophets of doom who are preaching stagflation. Thus, (not too) bad economic news is (rather) good news for risky assets, in this case equities. Even the bond market, which is sceptical by nature, seems to have capitulated on September's monetary easing: 10- and 30-year maturities have cautiously declined after rising in recent days.

The scenario needs one last confirmation today: the US Bureau of Labour Statistics, so heavily criticised for the quality of its statistics a few weeks ago, is due to release August employment figures for the United States. And there is a good chance that the scenario will remain favourable. Poor data will set the stage for a rate cut by the Federal Reserve in twelve days' time. A slightly better-than-expected figure will not derail this forecast, while reassuring the market about the state of the US economy. Only extremes would pose a problem: very poor figures would raise fears of a recession (but would revive the possibility of faster monetary easing, which would not displease the equity markets), while very favourable figures could call into question the rate cut.

In other news, oil remains under pressure due to oversupply, while gold is holding steady around record highs, despite easing investor fears. There was also a slew of earnings reports last night in the United States, with reassuring figures from Broadcom, which should help reassure the market about the continuation of the AI investment supercycle. Conversely, sportswear brand Lululemon issued a new warning that seems to confirm its downgrade: the stock plummeted 15% in after-hours trading.

In Asia-Pacific, the main markets followed in the footsteps of their Western counterparts, with the exception of India, which lost some ground. Japan, mainland China and Hong Kong posted gains of around 0.8%. South Korea was up just 0.2%, while Australia gained 0.5%. The rebound at the end of the week should allow the MSCI AC Pacific index to post a positive weekly balance. European markets are expected to open slightly higher.

Today's economic highlights:

On today's agenda: household spending in Japan and factory orders in Germany; in France, the current account balance and trade balance will be released; in Canada, the hourly wage rate for permanent employees year-over-year; in the United States, non-farm payroll changes and the unemployment rate. See the full calendar here.

  • GBP / USD: US$1.35
  • Gold: US$3,556.66
  • Crude Oil (BRENT): US$66.92
  • United States 10 years: 4.11%
  • BITCOIN: US$111,668

In corporate news:

  • HSBC appoints Maggie Ng as CEO for Hong Kong.
  • Petrofac relocates main business from Jersey to London.
  • Shell is considering selling its £3 billion stake in an Australian LNG plant.
  • Ørsted reduces 2025 adjusted EBITDA forecast to DKK 24-27 billion due to lower wind speeds and financial challenges.
  • IAG completes full subscription of its 500 million euro bond offering.
  • Mediobanca faces a negative rating revision from Fitch Ratings after rejecting Monte dei Paschi di Siena's offer.
  • UniCredit aims to increase its stake in Commerzbank to 30% by year-end.
  • Cadence Design Systems acquires Hexagon's design and engineering business for approximately $3.16 billion.
  • OpenAI to begin mass production of AI chips with Broadcom in 2026.
  • Broadcom reports above-estimate Q4 revenue forecasts and exceeds expectations in Q3 profit and sales growth.

See more news from UK listed companies here

Analyst Recommendations:

  • Ninety One Plc: SBG Securities (Pty) Ltd initiates a Buy recommendation with a target price of GBP 2.21.
  • M&G Plc: Mediobanca maintains its neutral recommendation and reduces the target price from GBX 250 to GBX 248.
  • International Consolidated Airlines Group, S.a.: Rothschild & Co Redburn maintains its buy recommendation and raises the target price from GBX 450 to GBX 475.
  • Standard Chartered Plc: BNP Paribas Exane maintains its neutral recommendation and raises the target price from GBX 1350 to GBX 1500.
  • Barclays Plc: BNP Paribas Exane maintains its outperform recommendation and reduces the target price from GBX 420 to GBX 410.
  • Lloyds Banking Group Plc: BNP Paribas Exane maintains its outperform recommendation and reduces the target price from GBX 96 to GBX 91.
  • Hsbc Holdings Plc: BNP Paribas Exane upgrades to outperform from underperform with a price target raised from GBX 880 to GBX 1100.
  • Admiral Group Plc: Peel Hunt downgrades to sell from reduce and raises the target price from GBX 2270 to GBX 2350.
  • Prudential Plc: JP Morgan maintains its overweight recommendation and raises the target price from GBP 11.50 to GBP 12.
  • Wh Smith Plc: JP Morgan maintains its overweight recommendation and reduces the target price from GBP 15.50 to GBP 9.
  • Babcock International Group Plc: JP Morgan maintains its overweight recommendation and raises the target price from GBP 13.70 to GBP 14.50.