Daily Brief - 2 May 2024

Fed stands firm with rate cuts delayed amid economic uncertainty

In their latest meeting on 1st May 2024, the Federal Reserve chose not to change interest rates, keeping them steady between 5.25% and 5.50%.

Originally, many expected up to six rate cuts this year, but now, fewer than two are anticipated due to changes in market expectations. The decision to cut rates in the future will heavily rely on new data, particularly regarding inflation and job market trends.

Although the Fed is not lowering rates now, there is adjustment in how quickly they reduce their financial holdings, a process known as quantitative tightening. For those watching the economy, it's clear the Fed might lower rates later, but they're waiting for clearer signs from economic data before making a move.

Universal Music and TikTok resolve dispute with groundbreaking licensing agreement

Universal Music Group and TikTok have announced a new licensing deal effective from May 2, 2024, ending their previous standoff. This agreement promises significant benefits for UMG's artists, songwriters, and labels, and reintroduces UMG's extensive catalog back to TikTok's global community. The deal focuses on fair artist compensation, the protection against AI-generated content, and enhancing online safety. UMG's and TikTok's joint efforts will explore new monetization avenues, integrating e-commerce and promotional campaigns to deepen artist-fan engagement. This collaboration marks a significant advancement in supporting artists' creative and commercial potentials through innovative social music integration.

FTSE 100 sees positive movement thanks to strong corporate strategies and results

The FTSE 100 has opened with an encouraging rise of 0.4%, propelled by outstanding corporate performances and effective strategic maneuvers in London's financial markets.

Notable developments include Standard Chartered’s impressive 5.5% increase in pretax profit due to advantageous interest rates, and the London Stock Exchange Group's strategic move to initiate a £500 million share buyback.

Furthermore, HSBC Holdings remains competitive with its lending rates in Hong Kong, and there’s a resurgence in oil prices, partly driven by the US’s decision to replenish its strategic reserves. These trends are key for investors to monitor as they provide insights into potential shifts in the commodity markets and overall economic direction.