OCR, Fed and UK Budget: What investors need to know - Thu 29 Oct

The Federal Reserve is widely expected to keep interest rates unchanged in its upcoming meeting, according to Forsyth Bar's Zoe Wallace. Analysts are particularly focused on potential splits within the committee regarding future rate hikes, as well as upcoming economic data, including US GDP and the PCE inflation measure. These indicators will be crucial in shaping the Fed's decisions moving forward, especially if inflation pressures continue to rise.

In the UK, Chancellor Jeremy Hunt's recent budget announcement appears to have been well-received by markets. The measures introduced are aimed at alleviating cost-of-living pressures, including targeted payments to households and a freeze on VAT for electricity. Despite concerns about a potential increase in bank taxes, the actual proposal to double the profit tax from 3% to 6% did not significantly dampen bank stocks, which rallied instead, indicating that the market had anticipated harsher measures.

Looking ahead, Wall Street braces for significant earnings reports from major tech companies like Alphabet and Amazon. Investors are particularly interested in the performance of cloud revenues and the impact of AI investments on future growth. The overall market sentiment remains cautiously optimistic, with a keen eye on how these earnings will shape expectations for the coming year.

Forsyth Barr's Zoe Wallis breaks down the latest OCR and Fed decisions, the UK Budget and what the big economic calls mean for investors and markets. See omnystudio.com/listener for privacy information.