London-listed stocks ended Monday on a positive note, with the FTSE 100 index increasing by 0.19%. Investors are closely monitoring the US presidential elections, which are set to influence major interest rate decisions later in the week. While polls close on Tuesday, formal results are not expected until the weekend.
"There's a chance that the results will be known fairly quickly this time, but the closeness of the race suggests it will go right down to the wire including full counting of overseas ballots," commented Scotiabank. If this estimated timeline holds true, the announcement of the new US president will coincide with the monetary policy decisions from the US Federal Reserve.
The Federal Open Market Committee is anticipated to ease monetary policy soon. Scotiabank elaborated, "As for implications for the Federal Reserve, they are to be taken seriously, but the ability of the President-designate to directly influence the FOMC through appointments over the 2025-28 term is more limited this time.
Influencing the Federal Reserve Act in other ways would probably take years, while facing high uncertainty in Congress including among Republicans. Naturally Chair Powell's 4-year terms ends in 2026, so his reappointment or choosing a successor could be impactful." Domestically, the Bank of England is expected to reveal its monetary policy on Thursday, with analysts predicting a 25 basis points reduction in interest rates. On the corporate side, Anglo American ($AAL) has decided to divest a 33.3% stake in the joint venture holding the Jellinbah East and Lake Vermont steelmaking coal mines in Australia, selling it to investment manager Zashvin for AU$1.6 billion.
The company's shares decreased by 0.23% by the closing bell. "We see potential for a material re-rating in the medium term as Anglo delivers on its restructuring plan, leaving a simplified portfolio with a 60% exposure to copper. An expected recovery in PGM and diamond prices could also help boost sentiment while a renewed approach from BHP cannot be ruled out, with the end November deadline soon approaching.
However, we view the outlook as more balanced in the near term given the potential for value leakage during the divestment process and the below-average FCFY in the coming two years," stated RBC Capital Markets, which rated the mining giant as sector perform..