London-listed stocks closed in positive territory on Monday, with the FTSE 100 index adding 0.19%. Markets are focusing on the upcoming US presidential elections and major interest rate decisions later this week. Polls will close on Tuesday, but results are not expected to be formally announced 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 the estimated timeline is proven right, the new US president will be named after the monetary policy decision of the US Federal Reserve.
The Federal Open Market Committee is widely expected to ease monetary policy. "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 term ends in 2026, so his reappointment or choosing a successor could be impactful," Scotiabank added. Additionally, the Bank of England is set to announce its monetary policy on Thursday, with analysts anticipating a reduction of interest rates by 25 basis points. In corporate news, Anglo American ($AAL) agreed to divest a 33.3% stake in the joint venture holding the Jellinbah East and Lake Vermont steelmaking coal mines in Australia to investment manager Zashvin for AU$1.6 billion.
The company's shares dropped 0.23% at closing. "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 of 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," RBC Capital Markets commented, rating the mining giant as sector perform..