There was a whiff of rebellion among bitcoiners yesterday. Or bitconistas. Or bitcoin addicts. Whatever term one prefers. As I explained at length yesterday, there is a (long) transmission chain that begins with Japan's key interest rate and ends with risky assets. Importantly, this chain functions unidirectionally: the rise in bitcoin has no bearing on Japanese monetary policy - at least not at this stage of economic development. What it does impact, however, is investor risk appetite. When cryptocurrencies rise, investors tend to shift towards tech equities.

That's precisely what happened yesterday. Cryptos staged a marked rebound after testing symbolic and technical lows that had raised concern. Bitcoin, for instance, dropped to USD 83,838 on Monday before climbing to USD 93,868 this morning. That's roughly a 12% increase over two days, based on extreme price points. The bounce silenced some of the doomsayers who had been revelling in the downturn, smugly proclaiming "I told you so". It also reassured younger, panic-stricken investors who had doubled down after the initial slide, only to be caught off guard by a second wave. And it probably allowed a few executives of zombie companies hastily repurposed as bitcoin treasury vehicles to sleep a little easier.

This rebound followed a pronounced decline and subsequent relapse, indicating the presence of technical drivers. It was also aided by confirmation that the US Securities and Exchange Commission will implement a highly flexible regulatory framework dubbed the "innovation exemption" for digital asset firms—viewed as both a breath of fresh air and, paradoxically, a last rites of sorts for the sector. This development coincides with the broader tokenisation movement.

The sudden surge in cryptocurrencies helped propel the Nasdaq 100, which closed 0.84% higher. That contrasts with a more muted 0.25% gain for the S&P 500, which saw just one of its eleven sectors post a significant advance: technology. Industry shares also rose, but largely due to a 10% jump in Boeing stock.

In Europe, the session arguably better reflected the prevailing caution. The Stoxx Europe 600 eked out a 0.07% gain, while markets in Paris, London, Amsterdam and Stockholm all declined. Germany managed to edge higher, largely thanks to a 12% surge in Bayer shares, amid speculation that the American administration might help shield the company from hefty liabilities linked to Roundup.

On the geopolitical front, talks between Vladimir Putin and US envoys aimed at ending the war in Ukraine were described as "useful and constructive" by both sides—diplomatic code for "no breakthrough". Meanwhile, Emmanuel Macron is in China from today through Friday. These are his fourth set of Chinese engagements since his first term. His visit comes at a time of tense EU-Beijing relations. Yet Xi Jinping needs Europe to prevail in his showdowns with both the United States and Japan, which could give the French President leverage to extract a few concessions.

Turning to macroeconomic data, the backlog in US statistics following the government shutdown is starting to clear. Markets are particularly focused on Friday's release of the PCE inflation index: the only consumer price data available ahead of the Fed's 10 December policy decision. The data pertains to September and is thus slightly stale, but beggars can't be choosers. In the meantime, investors will digest this afternoon's batch of US figures: the ADP private payrolls report for November, import-export prices, and September's industrial production.

According to the CME's FedWatch tool, markets still assign a 90% probability to a quarter-point rate cut next week.

Finally, tech stocks received a further boost after the close thanks to Marvell, whose earnings were warmly received, lifting the stock by 9% in after-hours trading. This offered some relief to AI enthusiasts who have taken a battering over the past month.

In Asia-Pacific, the tech rebound is supporting Japan's Nikkei 225 (+1.1%) and South Korea's KOSPI (+1%). China, Hong Kong and India remain in decline. Australia edged up 0.2%. Europe looks set to open higher, supported by Wall Street's momentum and robust US leading indicators post-Marvell results.

Today's economic highlights:

On today's agenda: Japan's PMIs, followed by those of China, France, Germany, the Eurozone, and the United Kingdom; In the United States, the PMIs, ISM Services Index, ADP employment changes, and DOE crude oil inventories will be in focus. See the full calendar here.

  • GBP / USD: US$1.32
  • Gold: US$4,208.77
  • Crude Oil (BRENT): US$62.55
  • United States 10 years: 4.07%
  • BITCOIN: US$93,328.4

In corporate news:

  • Quantum Base Holdings PLC is raising GBP 4.75 million through a GBP 4 million placing and a GBP 750,000 conditional retail offer via RetailBook.
  • HSBC has appointed Brendan Nelson as the new Group Chair, marking a significant leadership transition.
  • WPP plc successfully issued a €1 billion, 5.5-year senior unsecured bond with a 3.625% coupon, attracting orders over €2.9 billion.
  • J Sainsbury is facing a stake sale worth approximately GBP 272 million by Qatar Holding.
  • Airbus has lowered its 2025 aircraft delivery target to 790 due to inspections needed on 628 jets.
  • Vulcan Energy has secured €2.2 billion in financing for its Lionheart lithium project in Germany.
  • Novo Nordisk had its price targets lowered by Morgan Stanley and BNP Paribas Exane after GLP-1 semaglutide trials in Alzheimer's patients showed no significant cognitive slowing.
  • Hugo Boss anticipates a decrease in revenue and operating profit for 2026, projecting EBIT between 300 and 350 million euros.
  • Dovalue signed a new strategic service level agreement with Banco Santander for NPL servicing in Spain, effective from 2026.
  • ENI announced the early launch of Phase 2 of the Congo LNG project, potentially influencing Italian markets.
  • Amazon is intensifying its AI and cloud computing initiatives through partnerships and innovations, while facing competition in reusable orbital rockets from China's LandSpace.
  • Boeing's CFO forecast has sparked a rally in industrial stocks, with a positive outlook for jet deliveries and free cash flow by 2026.
  • UPS faces wrongful death lawsuits from families of victims of a cargo jet crash in Louisville.
  • Embraer finalized a share buyback program approved in November.

See more news from UK listed companies here

Analyst Recommendations:

  • Whitbread Plc: Deutsche Bank downgrades to hold from buy and reduces the target price from GBX 3375 to GBX 2815.
  • Bunzl Plc: Bernstein maintains its outperform recommendation and reduces the target price from GBX 2900 to GBX 2800.
  • Drax Group Plc: Citi upgrades to buy from neutral and raises the target price from GBP 6.89 to GBP 8.50.
  • Hays Plc: Morgan Stanley maintains its underweight recommendation and reduces the target price from GBX 55 to GBX 50.
  • Pagegroup Plc: Morgan Stanley downgrades to underweight from equalwt and reduces the target price from GBX 245 to GBX 215.
  • Persimmon Plc: Morgan Stanley maintains its overweight recommendation and raises the target price from GBX 1400 to GBX 1600.
  • The Berkeley Group Holdings Plc: Morgan Stanley maintains its equalwt recommendation and reduces the target price from GBX 4180 to GBX 3750.
  • Severn Trent Plc: Morgan Stanley maintains overweight with a price target raised from GBX 3300 to GBX 3350.
  • Sse Plc: Morgan Stanley maintains its overweight rating and raises the target price from GBX 2400 to GBX 2500.
  • Astrazeneca Plc: Morgan Stanley maintains its overweight recommendation and raises the target price from GBX 14000 to GBX 15500.
  • Bellway P.l.c.: Jefferies maintains its buy recommendation and reduces the target price from GBX 3489 to GBX 3476.