HL LIVE
HL commentary as it happens
Tuesday 17th February
UK jobs data reveals post-pandemic employment bounce is well and truly over
UK jobs data may not have moved the equity market much this morning, but it has ramped up market expectations of rate cuts through 2026. Unemployment rose slightly to 5.2% for the three months to the end of December, according to the Office of National Statistics, and there are more people out of work looking for jobs. Redundancies are also up. The post-pandemic jobs boom is well and truly over, and wage inflation is slowing. We agree with the market that this weakness in data confirms expectations that the Bank of England Monetary Policy Committee will cut rates next month - remember there was a split vote last time around - but we don’t think it’s bad enough to tilt the Committee to abandon its slow and steady approach. Two cuts through the year is still our base case, given where inflation is and the current trajectory. That said, if jobs data continues to weaken, and is coupled with stagnant or non-existent economic growth, we could see a ramping up of cuts in the second half.
Oil prices slipped slightly lower as US-Iran negotiations continue.
Brent Crude prices slipped slightly lower on Tuesday morning to around $68.2 per barrel, as the US and Iran are set to resume nuclear talks today. There’s speculation that Iran could agree to dilute its most highly enriched uranium in exchange for the full lifting of financial sanctions, but it’s not clear if that will be enough to seal a deal between the two parties.
Gold prices fall after traders take a holiday.
Gold prices have dropped more than 1% to around $4,920 per ounce this morning. That marks the second consecutive session of losses, partly due to weaker trading volumes resulting from public holidays in key markets such as the US, as well as in China and several other Asian countries for the Lunar New Year.
US stock futures move lower as AI-related fears continue.
After closing yesterday for a public holiday, US stock futures are trading lower today as AI-related fears continue to weigh on sentiment. Insurance brokers, wealth advisors, real estate services, and logistics were all in the firing line last week, and investors are cautiously watching for what slice of the market could be next on the AI hit list. With recent moves seeming rather disconnected from fundamentals, it’s simply not clear what part of the market the AI fears will come down on next. But for context, the US software and services sector is now trading at a discount to the broader sector for just the second time in 30 years.
FTSE marginally up at the open
The FTSE 100 had a subdued start this morning, opening only slightly up as there was little news from big hitters to nudge it in either direction. Reports continue to trickle out into the media that the UK Government is considering tweaking its support for first-time buyers by potentially reviving the Help to Buy scheme, or something similar. This comes as new home sales are struggling due to buyer affordability issues, and the government’s target of delivering 1.5 million new homes this parliament looks like a difficult hill to climb at this point. The key to any government support being effective for potential buyers will be to create a positive cost advantage over renting, likely through shared equity, which should help reduce monthly mortgage payments.
Monday 16th February
Oil prices hold steady after back-to-back weekly drop
Oil prices were steady this morning, with Brent hovering around $67.70 a barrel, as investors juggle rising geopolitical tension against a market that still looks well supplied. Talks between the US and Iran resume tomorrow, keeping traders on edge given the risk of escalation, while fresh Russia-Ukraine discussions are unlikely to unlock much extra oil anytime soon. Even so, prices are struggling to lift as OPEC+ debates adding more supply and the IEA flags a growing surplus and softer demand growth ahead.
US markets closed for Presidents’ Day, after another week of software pain
US markets are closed today, and that may be a welcome relief to many, after last week was once again dominated by violent swings linked to AI. Some stocks are flying, and others are getting crushed in moves that often feel disconnected from fundamentals. Power and utility names were the clear winners as investors bet they’ll be essential to the AI build‑out, while anything tied to data or software found itself in the firing line. Away from the AI noise, falling bond yields and softer inflation offered some relief, but a few worrying signals around growing loan defaults were one reminder that not everything under the hood is improving.
FTSE 100 opens higher
The FTSE 100 opened a touch higher this morning as sentiment steadies following last week’s sharp AI‑driven swings. European markets are also set for modest gains, but with the US, China and parts of Asia shut for holidays, trading is likely to be quieter than usual.
Thursday 12th February
Oil prices rise, but it’s not a one-way street
Oil prices pushed higher again, with Brent hovering around $70 a barrel, as geopolitical nerves around US‑Iran tensions continued to do the heavy lifting. Talk of diplomacy has done little to calm traders, who remain focused on the risk of supply disruption, even as OPEC stuck to its demand forecasts and signalled no change in its supply stance. That said, the rally is running into resistance, with US inventories jumping sharply and the IEA likely to remind markets that a global surplus is still lurking in the background later today.
US markets flat, but software selloff continues
US markets looked flat on the surface, but beneath the calm, it was a volatile session, with solid breadth in the S&P 500 masking weakness in the tech‑heavy Nasdaq. This is 2026 in a nutshell: blink, and you’re punished, as perceived AI disruption continues to separate winners from losers.
FTSE higher despite soft GDP print
UK markets opened higher, brushing off a lacklustre GDP report that showed the economy barely moving at the end of last year. Growth in Q4 was muted and narrowly driven by services and government spending, a reminder that private‑sector momentum remains thin despite hopes that Q1 will look a little brighter. That leaves the bigger picture unchanged: a fragile growth outlook, softer inflation ahead, and a Bank of England that should have room to cut rates over 2026.