Oil slides, Nasdaq sets a record, and UK households brace for the Budget

Cheaper crude, dearer technology shares

Monday's move began in the oil market and ended in the technology sector. Falling crude prices did the unlocking, according to the Wall Street Journal's account of the session, and the Nasdaq Composite finished at a record. Artificial intelligence positions were where the buying concentrated, with the Journal describing AI bets as surging as the oil price extended its slide.

The bond market barely acknowledged any of it. Treasury yields changed little despite the fall in oil, the Journal reported, in a piece that also carried Citi's decision to raise its forecast for the 10-year US Treasury yield. Separately, the paper charted what it called the 10-year yield's wild ride on the road to 5%, a reminder in chart form of how far the long end has travelled.

Enthusiasm for the AI trade is not uniform across regions. Bank of America told the South China Morning Post that Asian investors are now demanding proof of AI revenue, with the focus shifting from exposure to earnings — a different question from the one being asked in New York on Monday.

In Tokyo, the Journal reported that the Nikkei could rally on modest catalysts because short positions have piled up, leaving the index sensitive to small pieces of good news. Institutional investors, meanwhile, have been moving the other way: a survey reported by the South China Morning Post found them stockpiling cash in response to geopolitical risks.

British households and the Budget

UK consumer confidence fell to a three-year low, the Guardian reported, with fears over an interest rate rise and over jobs driving the decline ahead of the Budget. This is Money's account of the same slump listed the specific worries: job security, rising energy bills and higher interest rates.

Fuel costs are the sharp end of it. The BBC reported that soaring fuel prices are hitting small businesses, including one tow truck operator whose costs rose by £10,000, and that drivers are rethinking their spending as prices climb. Winter support for vulnerable residents is being planned, the broadcaster reported separately.

The inflation backdrop has a geopolitical source. City A.M. reported that Andy Burnham is to meet Donald Trump amid an inflation spike caused by the Iran war.

The fiscal argument around the Budget is running in several directions at once. City A.M. asked whether the fiscal psychodrama will ever end, and reported a warning that a business rates cut will backfire for Soho and the West End. The Guardian, meanwhile, reported calls for the UK to strengthen the financial muscle of its national wealth fund to aid the economy. City A.M. also carried the argument that Brexit has held back investment for a generation.

Deals, listings and plumbing

Paramount has settled lawsuits with 12 US states, clearing the way for its $110bn merger with Warner Bros. The BBC, the Guardian and Sky News all reported the settlement, which removes one of the larger obstacles to a deal of that size.

Nscale has promised to stay in the UK despite a £35bn stock market listing in the United States, City A.M. reported — the sort of split arrangement that keeps operations on one side of the Atlantic and the share register on the other.

Exchanges themselves were busy. The Hong Kong stock exchange moved to ease its rules on spin-offs and shareholder approval, the South China Morning Post reported, while four mainland Chinese firms jumped into what the paper called a cooling Hong Kong IPO market. Mainland exchanges have responded with a charm offensive of their own amid the Hong Kong listing boom. Hong Kong stocks are also eyeing fresh inflows from mainland insurers sitting on US$6 trillion.

In Europe, the Greek stock market joined the ranks of the world's leading exchanges, Euronews reported, some years after the debt crisis. The European Central Bank launched a platform called Pontes to settle tokenised assets in central bank money. Societe Generale shares climbed after the bank raised its profitability target and its plans for shareholder payouts.