- Trump claims “Big progress” in trade talks with Japan
- Powell highlights inflation risk
- Sainsbury results welcomed – positive outlook for FY26
- Rentokil Initial – not getting any worse
- Deliveroo sees takeaways take off
- Brent crude firm at $66.20, US dollar claws back some lost ground
Steve Clayton, head of equity funds, Hargreaves Lansdown:
“Tariffs continue to make the headlines, with Donald Trump claiming that “big progress” had been made in talks with Japanese negotiators, aimed at lowering the hefty tariffs that the US will otherwise impose in under three months’ time. No details were given. Japan has strong links with the major US defence contractors and some US commentators are suggesting that tariff concessions may be granted if Japan ups its spending on US arms. Asian markets took the news as a reason to recover some of the previous session’s losses, with Japan’s Nikkei index posting gains of over 1%.
Investors will have to become accustomed to information deficits under this most transactional of Presidents. Trump’s tactics so far have been to claim that injustices have been inflicted upon America and that punishments will be delivered, unless the offending nations bring something shiny to the table. With negotiations happening behind closed doors, investors are left guessing. But with most of the Reciprocal Tariffs stayed for three months, the window of uncertainty is not that long.
Federal Reserve Chairman, Jerome Powell, unnerved markets last night, warning of the potential impacts of current policy actions upon inflation and growth in the USA. He indicated that the Fed would probably put its anti-inflation mandate ahead of the target to see full employment in the USA if price pressures ticked higher. That led to selling on Wall Street, with the tech sector bearing the brunt. Nvidia plummeted almost 7% as it caught up from after-hours weakness the night before. Other major tech players saw their stocks under pressure; Microsoft was down almost 4%, the wider NASDAQ composite fell over 3% and Tesla lost 5%.
Sainsbury’s reported a well-received set of results that saw the group reporting underlying retail operating profits of £1,036m, up 7% on last year. Their outlook statement was relatively upbeat, in contrast to the gloomier messaging from Tesco when they reported their own figures last week. The shares opened up 2.4% on the news.
Rentokil Initial released results that showed a stabilisation of trading in their core US pest control business. Sales inched ahead by 0.7% but the group is still struggling to grow sales leads in North America, holding the business back. Beneath the surface, Rentokil are claiming progress in some of the nuts and bolts of the business. Terminix is achieving more five-star reviews from customers and Technicians are proving more effective at selling incremental services on site. The group are also set to launch a door-to-door sales programme, which should be interesting to watch. The shares were 0.6% lower in early trading.
Brits, it seems, can’t be bothered to cook. That’s the message at least from Deliveroo, who have reported a 7% jump in Q1 sales. The news was enough to put a spring into the stock, which rose 1.3% in response. Order values themselves edged up 1% in the UK, with customers spending an average of £25.80 on their takeaways. The quarter marked an acceleration from the run-rates achieved late last year and leave the group well placed to reach market expectations for 3% revenue growth for the year as a whole.
Oil markets are firmer today, with Brent Crude futures showing a rise of 39 cents to $66.22, while the dollar has clawed back a little of its recent losses to stand at $1.323 against sterling, with the greenback making gains across the board against other major currencies
