The FTSE 100 rose to a fresh record high to 9,600 as Natwest provided the latest lift to the blue chips. Gold and oil have both pulled back a bit this morning, while bitcoin is higher. Spot gold has found a bit of near-term resistance around the $4,150 level and has pulled back under $4,070 this morning – seems to maybe want to retest the key support at $4,000. Meanwhile, gold buying has boosted UK retail sales figures: that and the iPhone 17.
The FTSE hit an intraday record on Thursday, driven by oil stocks as crude prices surged on US sanctions on Russian oil majors Lukoil and Rosneft, while upbeat results from Rentokil and LSEG contributed to the upbeat session. Index heavyweights Shell and BP climbed around 3 per cent as crude prices extended their gains. Fresnillo and Endeavour Mining rallied as gold recovered its poise, but are pulling back this morning as gold retreats. Burberry jumped yesterday as Gucci-owner Kering surged in Paris to give luxury stocks some added lustre. It’s really not a huge leap to 10,000, and I’d not be surprised to see 12,000 by the middle of next year.
Wall Street rallied and Asian stocks firmed up overnight after it was confirmed that US President Donald Trump will meet Chinese President Xi Jinping next week as part of a trip to Asia. The S&P 500 closed out 0.58 per cent higher on the day, led by gains for tech, with stocks hitting session highs on news of the meeting, which seems to point to a potential détente. Momentum stocks – which were subject to a big unwind on Wednesday – rallied, led by quantum stocks. A bit slow at first to respond but quantum stocks (Rigetti, D-Wave, IonQ) did race higher on reports of the US government taking equity stakes. Ford beat expectations but fell. IBM also fell despite beating earnings expectations as software revenues were just in line.
Overnight, we have strong flows in tech names. South Korea’s Kospi hit a record high – it’s the best-performing major equity index this year. The latest bump up came as chipmaker SK Hynix rallied over 6 per cent as it provided a strong Q3 outlook. A big boost for Chinese tech names lifted Shanghai to a 10-year high as China’s latest plenum reaffirmed plans to become more self-reliant on tech and boost consumption (same old, but taken positively). The Nikkei climbed over 1.3 per cent as the yen fell.
So on the face of things, good news on trade is supporting risk sentiment across the board into the weekend. But given this is Trump and brinkmanship goes hand in glove with showmanship, talks with Xi could go either way. And indeed, the trade picture is not so optimistic everywhere we look.
Attention moves to a delayed inflation report from the US, which will be released later today and is a key piece of data for the Federal Reserve meeting next week. Headline CPI is seen rising to 3.1 per cent from 2.9 per cent, and core CPI inflation is steady at 3.1 per cent. It seems unlikely that anything will seriously dissuade the market from believing that a cut next week is assured, but a hotter-than-expected reading could impact perceptions about any further cuts beyond.
By Neil Wilson, investor strategist at Saxo UK