Derren Nathan, head of equity research, Hargreaves Lansdown: “The FTSE 100 has popped its head back over the 9,000 parapet this morning. Streamlining has been the order of the day with oil giant BP continuing its strategic refocus with an agreement to dispose of its US onshore wind business, BP Wind in which the group has claims to 1.3GW of generating capacity. Health and hygiene company Reckitt, the company behind the likes of Dettol, Durex and Nurofen is to dispose of its Essential Home division in a deal worth up to $4.8bn which will leave it with a non-controlling stake of 30% in brands such as Cillit Bang, Calgon and Airwick. The move strengthens Reckitt’s balance sheet and enables a sharper focus on its power brands. Iconic luxury brand Burberry has seen its first quarter retail revenue drop 2% to £433mn year-on-year when adjusted for exchange rates. However, investors can take some comfort that comparable store sales improved in all regions when compared to the previous quarter, and that Burberry remains on track to deliver £80 million in cost savings by the end of the financial year.
The FTSE’s also catching a favourable breeze from fresh highs for Wall Street. Strong results from the world’s biggest semiconductor manufacturer, Taiwan’s TSMC also helped to lift American technology stocks, with the NASDAQ composite having the best day of the major indices. There were signs of strength elsewhere as soft drink and snacking powerhouse PepsiCo breezed past analyst forecasts despite a lack of momentum in product volumes. However strategic efforts to reinvigorate core brands and lean into healthier snacking are expected to fuel mid-single digit revenue growth for the ‘next few quarters’. The shares finished up over 7% on the day.
Shares in engine builder GE Aerospace were flying high coming into its quarterly numbers. Underlying earnings per share grew by 38% to $1.66 cruising past analyst expectations, and its upgraded 2025 revenue growth guidance to the mid-teens range. But it seems much of that good news was already priced in with the shares losing altitude to the tune of 2%.
Meanwhile, US retail sales data showed that spending rose 0.6% in June compared to expectations of just 0.1%. The broad-based rebound showed little evidence that tariffs are damaging the average American’s spending power. That may soften the case for rate cuts by the Fed. But that’s not outshining signs of economic strength and robust corporate health, with US stock futures pointing to further gains at the open.
The House of Representatives has voted overwhelmingly in favour to regulate stablecoins, digital currencies pegged to real assets such as sovereign currencies. Banks and retailers alike look set to embrace stablecoins enthusiastically with names from Walmart and Amazon through to JP Morgan and Citigroup exploring initiatives in the space. The arrival of the Trump legislation signalled an about turn in attitudes towards the crypto industry, but legislators are still exercising some caution, also passing a bill that prevents the Federal Reserve from issuing its own digital tokens. While not quite at record highs Bitcoin is also benefitting from more benign attitudes to the space and is up around 1.7% today to over $120,500.
Brent crude oil prices have built on yesterday’s gains and are now trading at around $69.7 per barrel. Seasonal travel demand is providing some support to prices with consumption so far in July edging up slightly over last year’s levels to 105.2 million barrels per day. But with tariff uncertainty set to last at least into next month, and producing nations set to open the taps on production, markets have not managed to fully erase the losses seen earlier in the week.”
|
