Matt Britzman, senior equity analyst, Hargreaves Lansdown: “Global markets are in one of those strange phases where the news looks messy, but the tape looks almost bulletproof. The FTSE 100 is set for a flat open after a strong session yesterday, while US futures are pointing to more of the same after the S&P 500 and Nasdaq hit record highs last night, with Wall Street also coming off its strongest monthly gains since 2020. The message from investors is clear: this earnings cycle matters more right now than the Middle East stalemate, higher oil prices, or the inflation risk that comes with them. An AI super investment cycle is, of course, playing a major part, but this isn’t just another tech-led earnings rally, with beats coming through across healthcare, industrials, consumer staples and beyond. If oil stays in the $100 a barrel range for an extended period, the broader economic costs will eventually be harder to ignore, but for now, earnings are the bigger fish, and markets are happy to keep swimming with the current.
Apple’s long-awaited iPhone upgrade cycle is in full swing, and AI isn’t even part of the story yet. The headline numbers were strong, but the real message was in the guidance, which pointed to 14-17% revenue growth at the group level, against pre-results expectations closer to 9%, and even that comes with supply constraints clipping the wings a little. This is the power of Apple’s ecosystem in full view: even with an AI experience that has been more disappointment than differentiator, the brand still has enough pull to drag loyal consumers back into the upgrade cycle after years of stretching out their old devices. That brand power has bought Apple time, but loyalty won't last forever, and the next leg of the story now rests on whether John Ternus can turn AI from a weak spot into a reason to go out and grab the latest devices. Get it right, and the next few years should look decisively better than the last. Fail to deliver that spark, and this super cycle could start to look less like a new era and more like the final flourish of the old one.
NatWest has delivered the kind of update bank investors can work with in a nervous market - not flawless, but profitable, well-capitalised and backed by better guidance. The profit beat wasn’t really about a surge in income, but about cost discipline, lower litigation costs and strong capital generation doing the heavy lifting. That puts NatWest in a similar camp to some of the other banks this week, where the economic outlook is looking a little more fragile as Middle East tensions feed into oil, inflation, and rate uncertainty, but higher-for-longer rates are also providing a useful buffer. For investors, the message is reassuring. The loan book remains resilient, capital is a strength, and while impairments and weaker wealth balances are worth watching, there is enough here to support the shareholder returns story.
Gold is caught between two powerful forces. A weaker dollar is giving it support, but the prospect of higher-for-longer interest rates is stopping the rally from really catching fire. Bullion is holding above $4,600 an ounce after reports of Japanese currency intervention knocked the dollar, but the bigger backdrop is still the Middle East, where fading hopes of a US-Iran peace deal and a closed Strait of Hormuz are keeping energy supply fears firmly in play. If tensions stay high, gold’s safe-haven appeal may stay intact, but the rate story means this is not quite the one-way trade it might usually be in a geopolitical shock.”
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