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Base metals rally on combination of dovish Powell and Beijing’s easing of zero-covid policy

Copper and iron ore both rallied overnight, with copper testing $8,300/t and iron ore futures in Singapore rising to $101/t.
An apparent shift in Covid policy from Beijing officials has encouraged traders to bet on a recovery in China’s metals demand, with a top official noting the country is ‘entering a new stage.’
Powell’s comments of a slowdown in rate hikes has also proved supportive for metals, triggering a further sell-off in the dollar and boosting global economic growth expectations.
Whilst an easing of zero-covid may be supportive in the short term for manufacturing activity and thus base metals demand, we would remind readers that China’s property sector will continue to struggle with oversupply, inflated real estate prices and a debt-laden developer sector with or without restrictive Covid policies.

https://www.proactiveinvestors.co.uk/companies/news/999980/today-s-market-view-999980.html

The airline industry has racked up a collective net loss of almost $220bn (£180bn) since the Covid pandemic began, according to recent research.

Analysis published today by analytics firm Cirium shows that revenues for the world’s airline groups went down by more than 50 per cent in 2020, ending 2021 still 40 per cent below pre-pandemic levels.

Despite several carriers – including British Airways’ owner IAG or Lufthansa – returning to black in the past few months, the overall industry is expected to post another loss for the whole of 2022.

Nevertheless, Bowen remains positive as he said the industry could break even in the second half of this year, “if we assume that there are no further shocks to the industry.”

European airline groups could be leading the way as traffic within western Europe has surged to 95 per cent of 2019 levels.

https://www.cityam.com/airline-industry-racked-up-180bn-collective-net-loss-since-pandemic/

The British Pound swept higher against the Euro, Dollar and a host of other major currencies at the start of December after global risk sentiment received a boost from the U.S. Federal Reserve.

The 'high beta' Pound rallied after Federal Reserve Chairman Jerome Powell effectively validated market expectations for a 50 basis point rate hike later in the month, confirming the Fed was approaching the tail end of its rate hiking cycle.

Theosus

Sorry late reply yes china sneezes the rest of the world catches a cold, I see they starting to ease COVID restrictions,

https://www.bbc.co.uk/news/world-asia-china-63805188

China eases some virus restrictions improving market sentiment share price pushes towards.50p

Tickets flying out for Santa's grotto inside the ****pit of a British Airways Boeing 747

https://www.manchestereveningnews.co.uk/whats-on/family-kids-news/tickets-flying-out-santas-grotto-25632954

Dr. John Glen, Chief Economist at the Chartered Institute of Procurement & Supply, said:

“A lethal ****tail of Brexit, logistics constraints, high costs and low demand contributed to the continued decline in manufacturing output in November which also fed into deteriorating job numbers for a second month in a row.
“Manufacturers reduced their operational capacity without the safety net of new pipelines of work as domestic and particularly export orders fell. Evaporating consumer confidence and fewer orders from previously strong markets such as the EU, US and China compounded the problem of a weakening marketplace.
“A depressing result for the country’s makers as optimism fell to its lowest since April 2020. One vestige of hope is that with stock levels rising at the fastest rate for over three and a half years, supplier deliveries to end consumers and other manufacturers should be much quicker once the economy starts to improve as pressure on delivery times was the least marked since January 2020.”

Manufacturing downturn continues as output, new orders and employment fall further

Key findings
Intermediate goods remains weakest performing sector
Business sentiment dips to lowest since April 2020
Input price inflation eases to three-month low
November saw the UK manufacturing sector contract further, as companies reported lower output, weaker new work intakes and reduced employment. The intermediate goods sector fared especially poorly, while downturns also continued at consumer and investment goods producers.
The seasonally adjusted S&P Global / CIPS UK Manufacturing Purchasing Managers’ Index® (PMI®) edged up to 46.5 in November, from 46.2 in October. The PMI remained below the neutral 50.0 mark for the fourth month running and posted one of its lowest levels during the past 14 years.
Manufacturing production contracted for the fifth successive month, linked to reduced inflows of new business, supply chain disruptions and ongoing shortages of numerous components on international markets. The rate of contraction was slightly sharper than in October.

https://www.pmi.spglobal.com/Public/Home/PressRelease/8017352d392b407ea72042f469f3838a

Commenting on the latest survey results, Rob Dobson, Director at S&P Global Market Intelligence, said:

“November saw a further contraction of the UK manufacturing sector, as weak demand, declining export sales, high energy prices and component shortages all hit industry hard.
“The outlook for the sector also darkened, as confidence among manufacturers fell to its lowest level since April 2020. Weak sentiment and declining intakes of new work led to job losses, a retrenchment in purchasing activity and an accumulation of finished goods inventory that will likely provide a further brake to output during the months ahead. Companies are also reporting rising recession fears, weak consumer spending and subdued client confidence.
“The trend in new export business was especially weak, as Brexit issues and supply chain stresses exacerbated the effects of a weakening global economic backdrop, leading to lower sales from the US, the EU and China. On a slightly more positive note, manufacturers saw a welcome easing in input price inflation. However, firms are still reporting that the direct and indirect impacts of high energy prices remain a major concern.”

Data out today house prices have fallen 1.4% since October Nationwide’s house price index this will have a big effect on consumer sentiment

House price growth in the UK slowed “sharply” last month, representing the biggest monthly drop in value since June 2020, according to the latest data.

The average cost of a home has fallen by 1.4 per cent since October – the equivalent of around £4,500, to £263,788, Nationwide’s house price index has revealed

a drop in house prices will have a big effect on consumer sentiment

1st December start of Santa's rally

The Federal Reserve could scale back the pace of its interest rate hikes “as soon as December,” Fed Chair Jerome Powell said on Wednesday, while cautioning the fight against inflation was far from over and that key questions remain unanswered, including how high rates will ultimately need to rise and for how long.

“It makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down. The time for moderating the pace of rate increases may come as soon as the December meeting,” Powell said in remarks prepared for delivery at the Brookings Institution think tank in Washington

https://www.cityam.com/federal-reserve-could-scale-back-interest-rate-hikes-from-december/

FTSE 100 set to make a bright start to the day, building on yesterday’s gains, after US markets soared following comments by Federal Reserve Chair Jerome Powell who confirmed that the central bank will slow the pace of its aggressive rate-hiking campaign.

Spread betting companies are calling the lead index up by around 30 points

The UK economy faces a “lengthy period of stagnation” amid persistent inflation, JP Morgan warned as it published an updated forecast for the coming year, with fellow investment bank Citigroup predicting a much bigger decline.

Rising fuel prices, tighter monetary and fiscal policies, global economic downturn, rising ill-health and knock-on effects from the pandemic and Brexit will all continue to impact the UK economy next year, JP Morgan said.

https://www.proactiveinvestors.co.uk/companies/news/999901/uk-faces-dreaded-long-period-of-stagflation-in-2023-warns-jp-morgan-999901.html

Looking at technical analysis chart it's a head and shoulders formation occurring the market trend is in the process of reversal either from a bullish or bearish trend

As at 30 November 2022, the total number of shares issued by Lloyds Banking Group plc with rights to vote which are exercisable in all circumstances at general meetings is 67,278,416,588 ordinary shares

Mulberry Group (AIM:MUL) shares fell 15% to 240p on Wednesday as deteriorating consumer sentiment caused revenues to dip 1% in the first half of 2023, according to the British luxury fashion company’s interim results.

UK retail sales were the worst hit with a 1% decline to £34.1mln year on year, while China retail sales actually increased by 6% despite harsh Covid-19 restrictions.

Pre-tax losses came to -£2.8mln against pre-tax profits of £4.5mln in the first half of 2022, and while net cash fell sharply, the group retains £4.3mln in the bank.

Chief executive Thierry Andretta commented: “We have delivered a resilient performance across the group, supported by strong international demand and continued investment in the UK.

“Looking ahead, we are confident in our ability to execute our strategy and to continue to invest across the group for our future growth, in spite of the challenging economic and geopolitical backdrop.

“We are well placed for the festive trading period and will continue to drive the business forward to the benefit of all stakeholders.”

Equities analysts at Shore Capital noted an investment case “predicated upon Mulberry being well-positioned to deliver on the Asian-focused geographical expansion and potential product extension strategy” in combination with MUL shares trading at a 30% discount to its peer group.

AIM-quoted MUL shares are around 19% down year to date with a market capitalisation of £144mln.

High-end accessories retailer Mulberry is beginning to feel the effects of the cost of living crisis and recession in the UK, with sales and revenue slipping over the past six months.

The British fashion firm reported a one per cent revenue dip to £64.9m. While sales sank 10 per cent to £34.1m in the six months to the beginning of October.

https://www.cityam.com/mulberry-feels-the-chill-of-recession-but-eyes-christmas-boost/

Brits will continue to travel amidst the current cost-of-living crisis, according to Easyjet’s boss Johan Lundgren.

The chief executive said that, despite limited visibility, the carrier is already seeing a strong demand for next year.

https://www.cityam.com/easyjet-shrinks-losses-as-it-braces-for-rocketing-fuel-prices-next-year/