- FTSE 100 stays in the red as uncertainty swirls ahead of Trump’s tariff announcement.
- Gold hovers at record levels amid a flight to safe havens.
- S&P 500 has clawed back some ground depsite stagflation worries rising.
- Bargain hunters out at the start of the week hoping to snap up an American bargain.
- The drop in Tesla delivery numbers comes in worse than expected.
Susannah Streeter, head of money and markets, Hargreaves Lansdown:
‘’Nervousness about incoming wave of US tariffs has kept the FTSE 100 in the red, as investors assess the UK vulnerability and the knock-on effects for the global economy. The S&P 500 also opened on the back foot but has clawed back some ground. Concerns continue to swirl about stagflation taking hold in the US, given that tariffs are expected to push up consumer prices and act as a drag on growth, and worries ricochet about further turmoil ahead. Tesla’s disappointing delivery numbers have added to jittery sentiment, highlighting the growing power of consumer feeling against the brand.
There won’t be quick retaliation from the UK, with the Prime Minister Keir Starmer underlining his determination to take a pragmatic approach, but this will leave sectors like car manufacturing exposed to the ratcheting up of duties. The threat of an escalation of tariffs looms large, with the EU preparing to respond, and there are renewed fears about the impact on global growth. It’s not surprising, given that uncertainty is so high, that gold is hovering at record levels. The gold rush has been sustained as investors have sought safer havens for their money amid worries that ‘Liberation Day’ will lead to a more severe trade war.
Equities look set to remain highly volatile and sentiment remains more cautious around US stocks. HL clients were withdrawing from US funds at the start of March with investor confidence in North America falling by 17%. The most recent data shows that this trend has continued, with clients placing more net sells of US equities and North American funds than buys. It’s important that amid the volatility that eyes are kept on long-term investment horizons and investors ensure they are well diversified, without too much concentration on a particular market, and with money spread across different asset classes and geographies.”
Matt Britzman (pictured above), senior equity analyst, Hargreaves Lansdown:
“There’s no way to sugarcoat it, Tesla’s first-quarter delivery numbers are a disappointment, though many investors were already preparing for a soft number. A drop from last year is no surprise, but the scale is worse than many had expected. On a positive note, high-margin energy deployment was very strong, and that should help to balance out the earnings impact of the delivery disappointment.
Headlines will point to branding issues, and it’d be naive to assume that’s not a factor here, but it misses the key point. Deliveries have been significantly impacted by downtime at factories as Tesla launched the long-awaited refreshed version of the Model Y, its best-selling car. If reviews are anything to go by, the new Model Y should be a major hit, and with it coming in as China’s best-selling car in March, demand in this key market is clearly strong.
But in Western markets, simply having the best car doesn’t solve Tesla’s challenges. The brand is under pressure, and while it’ll take a few months to get clean year-on-year delivery comparisons to truly assess the damage, there’s clearly an underlying impact. It’s rare to see sentiment toward a company so closely tied to a polarising White House, and until Musk pulls his focus back to Tesla, shares will remain volatile.
That said, while volatility isn’t going away anytime soon, it’s making good progress behind the scenes on a host of longer-term growth drivers. Tesla still has a massive opportunity to monetize AI through real-world hardware, with autonomous driving and further down the line, robotics.”
