Morning Note: A round-up of market news.

Market News

China escalated a brewing spat with Japan over comments the PM made about Taiwan, warning its nationals against travelling to Japan. Japanese tourism and retail-related shares fell and NHK reported Tokyo sent its top diplomat to China to ease tensions. Throughout the region, equities drifted lower: Nikkei 225 (-0.1%); Hang Seng (-0.7%); Shanghai Composite (-0.5%). Japan’s economy contracted for the first time in six quarters, though at a slower rate than economists expected.

This week is a pivotal one for US economic data and earnings from AI bellwether Nvidia, both expected to set the tone for markets. Quarterly results will also be released by Walmart, Target, Imperial Brands, Medtronic, Deere, and Intuit. Berkshire Hathaway has revealed a $4.3bn stake in Google parent Alphabet and said it further reduced its stake in Apple. Alphabet is trading up 5% in the futures market.

After Friday’s pullback, the gold price has steadied at $4,080 an ounce. The board of Barrick Mining has raised the possibility of splitting the company into two separate entities, one focused on North America and the other on Africa and Asia.

The theme of US consumer resilience held firm, with AmEx citing steady Q4 billing trends and BofA reporting US card spending up 2.4% y/y in October, the strongest gain since early 2024. The 10-year Treasury yields 4.14%.

Brent Crude trades at $64 a barrel after Russia’s Novorossiysk port resumed operations following a two-day shutdown caused by a Ukrainian drone strike

The FTSE 100 is currently 0.2% lower at 9,690, while Sterling trades at $1.3165 and €1.1345. Gilt yields remain elevated – the 10-year trades at 4.56% – after last week’s political upheaval.

Source: Bloomberg