Market Report

Monday 12th February 2024 16:40 GMT

UK and European markets were subdued Monday in quieter trade with a thin week in prospect for the UK with the Mid-Term holiday.

U.S. stocks continued to rise after the S&P 500 notched a record high last Friday on optimism about eventual Federal Reserve interest rate cuts and easing inflation.  
 
The next pressure point for markets is Tuesday’s consumer price index report.  The annual US inflation rate is forecast to have dropped to 2.9% in January from 3.4% the prior month and would be the first reading below 3% since March 2021.

Oil prices were flattish after some initial profit-taking following last week’s rally which saw prices lift 6% higher on increased tensions within the Middle East.
 
Gold saw relatively muted price action as markets continued to seek greater clarity on Fed rate cuts and awaited comments from Federal Reserve officials due later in the week.
 
In corporate news, Diamondback Energy Inc agreed to buy fellow Texas oil-and-gas producer Endeavor Energy Resources LP in a $26 billion cash-and-stock deal to create the largest operator focused on the prolific Permian Basin. 

The agreement is the latest in a string of massive deals transforming the US energy sector landscape over recent months as companies push to line up future drilling sites and cut costs. 
 
The consolidation marks a maturing of the long-fragmented shale industry, which has traditionally had few players of significant size and struggled to attract mainstream investors.  It comes as oil remains in high demand globally despite efforts to transition away from it, with consumption expected to rise through 2030 – and perhaps beyond!