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London open: FTSE nudges up on positive US cues; Burberry surges
London stocks nudged higher in early trade on Friday following a positive session on Wall Street, after US President Donald Trump said he would “rather not” impose tariffs on China.
At 0830 GMT, the FTSE 100 was up 0.1% at 8,576.35.
Derren Nathan, head of equity research at Hargreaves Lansdown, said: “The FTSE is testing record highs once again this morning after Donald Trump’s address to the World Economic Forum sent a pulse of optimism across global markets, with the S&P also reaching a new high-water mark of 6,118.71.
“The prospect of an olive branch in the form of a trade deal with China has had a calming effect. The US president’s wish for lower interest rates also soothed some nerves, but that failed to stop 10-year yields in US Treasuries nudge up to 4.638%.
“This sets Trump on a potential collision course with central bankers. Yesterday’s US jobs data came in a little cooler than expected, but that’s unlikely to be enough evidence to sway monetary policy makers decisions any time soon. Markets are pricing in next to no chance of a rate cut at next week’s Fed meeting.”
On home shores, a survey released earlier showed a sharp fall in consumer confidence as the new year got under way.
The GfK consumer confidence index for January came in at -22, a five-point drop on December and three points lower than January 2023.
Within that, expectations for personal finances in the coming year dropped back into negative territory, losing three points to -2.
Respondents were similarly gloomy about prospects for the wider economy, with the sub-index sliding eight points to -34.
Spending was also shelved in favour of saving. The major purchase index lost four points to -20 while the savings index jumped nine to 30.
Neil Bellamy, consumer insights director at NIQ GfK, said: “New Year is traditionally a time for change, but looking at these figures, consumers don’t think things are changing for the better.
“These figures underline that consumers are losing confidence in the UK’s economic prospects.”
He added that the sharp increase in saving intentions was “unwelcome, because it’s another sign that people see dark days ahead and are therefore thinking of putting money aside for safety”.
In equity markets, miners were the top performers on the FTSE 100, with Antofagasta, Glencore, Anglo American and Rio Tinto all up.
Burberry surged as it said the rate of sales decline eased significantly in the luxury fashion brand’s third quarter as recent actions to turn the business around started to bear fruit.
Retail revenues were down just 7% year-on-year in the three months to 28 December at £659m, following a 22% sales slump in the first half.
Burberry said it was “encouraged by the response from customers and partners over the festive period”, which the company attributed to the ‘Burberry Forward’ brand reset initiated in November.
“In light of our Q3 performance, it is now more likely our second-half results will broadly offset the first-half adjusted operating loss, notwithstanding the uncertain macroeconomic environment,” it said.
Elsewhere, Rolls-Royce was little changed after it was awarded a £9bn nuclear submarine contract by the UK Ministry of Defence (MoD).
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Antofagasta Plc | +3.99% | +69.00 | 1,799.00 |
| 2 |  |
Wise Plc | +3.14% | +34.00 | 1,117.00 |
| 3 |  |
Bhp Group Limited | +2.51% | +50.00 | 2,040.00 |
| 4 |  |
Wpp Plc | +2.50% | +18.20 | 745.00 |
| 5 |  |
Glencore Plc | +2.46% | +9.20 | 382.70 |
| 6 |  |
Prudential Plc | +2.42% | +15.80 | 667.80 |
| 7 |  |
Rio Tinto Plc | +2.07% | +102.50 | 5,050.00 |
| 8 |  |
Anglo American Plc | +1.90% | +48.50 | 2,596.50 |
| 9 |  |
Mondi Plc | +1.87% | +22.50 | 1,227.00 |
| 10 |  |
South32 Limited | +1.85% | +3.30 | 181.80 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Relx Plc | -1.41% | -56.00 | 3,924.00 |
| 2 |  |
Barclays | -1.29% | -3.85 | 294.80 |
| 3 |  |
Compass Group Plc | -1.28% | -35.00 | 2,705.00 |
| 4 |  |
Marks And Spencer Group Plc | -1.23% | -4.10 | 328.70 |
| 5 |  |
Pearson Plc | -1.08% | -14.00 | 1,276.50 |
| 6 |  |
Shell Plc | -1.08% | -29.00 | 2,654.00 |
| 7 |  |
Imperial Brands Plc | -1.07% | -28.00 | 2,599.00 |
| 8 |  |
Ferguson Enterprises Inc. | -0.94% | -140.00 | 14,720.00 |
| 9 |  |
Natwest | -0.93% | -4.00 | 425.60 |
| 10 |  |
Flutter Entertainment Plc | -0.92% | -200.00 | 21,630.00 |
US close: S&P 500 hits new high after Trump speech at Davos
US stocks rose on Thursday as investors digested a host of blue chip earnings and comments from Donald Trump as he pledged his “America First” strategy to the world at Davos.
A number of blue chips reported quarterly results ahead of the opening bell, including American Airlines, GE Aerospace, Freeport-McMoran and McCormick & Company. Meanwhile, heavyweights Intuitive Surgical, Texas Instruments, CSX Corporation and East West Bancorp were all due to report after markets close.
The S&P 500 rose 0.5% to a new high of 6,118.71, surpassing an earlier closing peak of 6,090.27 reached on 6 December. Meanwhile, the Nasdaq gained 0.2% and the Dow rose 0.9%, with both indices nearing their own record highs reached last month.
With very little economic data out across the globe, the market’s focus was (again) firmly on Donald Trump as he addressed the World Economic Forum in Davos, reinforcing his protectionist stance on manufacturing and trade.
“My message to every business in the world is very simple: Come make your product in America and we will give you among the lowest taxes of any nation on Earth,” Trump said in a video address. “But if you don’t make your product in America, which is your prerogative, then, very simply, you will have to pay a tariff.”
“His comments that companies should make products in the US if they don’t want to face tariffs won’t come as much of a surprise to the business leaders listening, nor will his stated desire to cut taxes and lower inflation, though plenty will wonder how those two things might be achieved at the same time,” said AJ Bell’s head of financial analysis Danni Hewson.
In economic news, claims for unemployment benefits in the US rose 6,000 to a six-week high of 223,000, with new claims in California at a two-year high as wildfires spread across the north-west LA area. The consensus forecast was 220,000. Claims in California alone rose nearly 6,744 to 60,988, even as seasonal factors anticipated a sharp decline.
Nationwide continuing jobless claims – the number of people continuing to receive benefits – jumped 46,000 to 1.899m, their highest level since November 2021 and well ahead of the 1.860m estimate.
Market movers
Shares in American Airlines dropped 9% despite the news of record quarterly and annual sales, as the carrier’s outlook for the first quarter disappointed investors. The airline expects to report an adjusted loss per share of 20 to 40 cents for the fourth quarter, with the market having pencilled in a figure closer to a 4 cents loss.
General Electric shares jumped 7% after GE Aerospace reported a strong set of results for the fourth quarter, exceeding analyst expectations. Net income surged 49% to $1.9bn, driven by a 14% increase in revenue to $10.8bn. The company also announced a $7bn share buyback programme for 2025, and a 30% increase in its quarterly dividend.
Freeport-McMoran finished slightly in the red after the mining group said that production in the fourth quarter declined and costs would be higher than anticipated this year.
Meanwhile, McCormick & Company gained after the food manufacturer posted a less-than-expected decline in fourth-quarter profits, reassuring investors despite a under-consensus forecast for 2025.
Friday newspaper round-up: Thames Water, CMA, UAE
The UK government has reportedly approached multiple restructuring advisers for the role of special administrator for Thames Water if the troubled utility falls into bankruptcy. Teneo, Interpath and EY are among the companies contacted by the government as it prepares contingency plans should Britain’s largest water company be forced into nationalisation, the Financial Times reported, citing people familiar with the process. – Guardian
The Barclays chief executive, CS Venkatakrishnan, could have his maximum pay package rise by 45% to more than £14m, as part of a deal being considered by the bank’s board. The high street lender is understood to have written to the bank’s largest shareholders regarding potential plans to overhaul its pay structures for Venkatakrishnan and its finance chief, Anna Cross. – Guardian
Britain’s competition regulator is cutting almost 10pc of its staff after a wave of accidental overspending. The Competition and Markets Authority (CMA), whose chairman was unexpectedly ousted by the Government earlier this week, recently announced a scheme to cut around 100 roles. – Telegraph
The United Arab Emirates is at risk of total wipeout on a £600m loan it provided to the Barclay family as part of its doomed bid for control of The Telegraph. The Gulf petrostate’s media arm, International Media Investments (IMI), helped the Barclay family pay off £1.2bn in overdue borrowing from Lloyds Banking Group with a new loan in 2023. – Telegraph
AstraZeneca has announced a £460 million investment in Canada as uncertainty over a large investment in the north of England continues. Britain’s biggest public company said it would create 700 new scientific and “high-skilled” jobs as part of the move to a larger, “state-of-the-art office” in the greater Toronto area, Ontario. – The Times
Strong earnings growth over the past year has made purchasing a home for first-time buyers slightly more affordable, according to Nationwide. Britain’s biggest building society said that the typical first-time buyer with a 20 per cent deposit would have to make mortgage payments equal to 36 per cent of their monthly take-home pay, down slightly compared with 2023. However, that ratio remains well above the long-run average of 30 per cent. – The Times
