FTSE 100 outperforms US markets, defence stocks pull back on Trump Ukraine comments and Hershey’s shares jump amid takeover rumours

“It’s been a funny old day for markets as London’s FTSE 100 has enjoyed what’s felt like a rare occurrence of late and outperformed US markets,” says AJ Bell Head of Financial Analysis Danni Hewson.

“China was the day’s double-edged sword with miners and big oil giants listed on London’s blue-chip index buoyed by expectation of further stimulus to boost growth, whilst Nvidia shares slunk back as Chinese regulators said they would investigate the chip maker for allegedly violating strict anti-monopoly laws.

“It’s another sign of continued tension between the US and China which has put chip makers up front as potential pawns in what seems to be a game of brinkmanship when it comes to tech development.

“For US markets this week should give further clarity on what the Fed is likely to do next week, with expectation sitting around 90% that the US central bank will deliver one last rate cut for 2024.

“The latest CPI data is due mid-week, with the all-important core number expected to be pivotal when it comes to sign off for another quarter percentage point cut. Too hot and market expectation could be sloshed with a bucket of tepid water, dampening the optimism that’s been washing through Wall Street as we speed towards the end of the year.”

Defence Stocks

“Shares in the European defence sector have pulled back after Donald Trump demanded an immediate ceasefire between Russia and Ukraine, with Rheinmetall one of the day’s biggest fallers on the Stoxx 600.

“Defence stocks have enjoyed a strong run since Russia’s invasion of Ukraine in 2022 as that has spurred governments around the world to look more seriously at their military and cybersecurity capabilities and strengthened the pipeline of work for defence contractors.

“Signs that conflict might come to an end could act as the trigger for some investors to close out positions in defence stocks in case earnings momentum for the sector starts to ease.

“While Trump is not yet in power, the market is watching his remarks closely as an indication of what he might do once returning to the White House.”

Hershey's / Mondelez

“What could a mash up of Cadbury and Hershey’s chocolate taste like? Purists will be hoping that taste sensation won’t make it onto shelves, but the two brands could end up in the same stable if reports that Mondelez is exploring the possibility of taking over the kisses maker result in firm action.

“At the moment it seems to be preliminary exploration but the cost cutting opportunities are pretty evident in a tie up which would create the world’s largest confectionary maker.

“It’s not the first time Mondelez has set its cap at Hershey’s. Back in 2016 the latter rejected a $23 billion bid.

“Shares in Hershey’s jumped by more than 14% on the news whilst Mondelez sank back a modest 2% in early trading.”

These articles are for information purposes only and are not a personal recommendation or advice.