Shares in London seem to be drifting sideways as the FTSE 100 bobbled around the 9,000 mark, while gilt yields rose after government borrowing jumped last month, raising fresh concerns about the UK’s fiscal and economic outlook. Compass Group led the gainers after raising its guidance. Mainland European stock markets opened down on Tuesday with the Dax and Cac both declining around half a per cent.
US stocks hit fresh record highs as markets seemingly shrug off all uncertainty, whether it’s the fate of the Federal Reserve or 1 August tariffs. The S&P 500 closed above 6,300 for the first time. Treasury yields and the dollar were lower yesterday to help tech out along with gold, which jumped to its best in a month before running into resistance at $3,400 and pulling back this morning.
US Treasury Secretary Scott Bessent called for an inquiry into “the entire Federal Reserve institution”, amid wrangling over the cost of a renovation of its headquarters and persistent attacks on chairman Jerome Powell by President Donald Trump. It sounds as though the administration is poking around, and the renovation seems like a useful angle to pile the pressure on.
The British government’s borrowing rose more than expected in June – second-highest since records began in 1993 for the month: tax hikes are coming. Gilt yields rose with the 30-year jumping after sliding on Monday – we’re not yet back to yesterday’s highs so nothing to get jumpy about. But I do worry that we could see bond vigilantes hit gilts this autumn.
Companies
Trump gets his way: AstraZeneca said it will invest $50bn in the US for medicines manufacturing and R&D. Shares were flat on the news…be hopeful that this is the kind of thing the President appreciates, and that he will find carve-outs and exemptions for anyone who puts their money where his mouth is.
Contract food service business Compass Group raised its full-year profit guidance on good organic growth and better-than-expected performance from acquisitions. Management said it now expects full-year underlying operating profit growth of 11 per cent, following an 8.6 per cent rise in organic revenues in the first nine months of the year. Fellow food company Greencore rallied 10 per cent after it too raised its outlook. One more to note is Kier Group, which is a beneficiary of increased infrastructure investment. Shares were down 5 per cent, though – FY results were in line, but the CEO is retiring. Read about these stories and more here
Figma released an updated prospectus ahead of its planned IPO, touting shares in the company at a range of $25 to $28 each, implying a valuation in excess of $16bn. Alphabet and Tesla report after the close tomorrow – these will be important for sustaining the AI underpinning for the broader market. Ahead of that, we have Coca-Cola, General Motors and Philip Morris.
By Neil Wilson, investor strategist at Saxo UK