- FTSE stable mirroring global market inertia
- Trump and Xi’s ‘very good’ call fails to lift Asian stocks
- European markets nonplussed by rate cut
- US markets steady ahead of expected slowdown in non-farm payroll growth
- Musk and Trump trade insults – $152bn wiped off Tesla’s valuation – biggest ever daily loss
- Oil rises on supply concerns
Derren Nathan, head of equity research, Hargreaves Lansdown:
“The FTSE looks unlikely to move much this morning with little scheduled in the way of corporate news for investors to hang their hat on. That sentiment reflects an unremarkable 24 hours on markets across the globe. But world markets remain at close to all-time highs, despite the reality of higher tariffs and diminishing confidence for both businesses and consumers. So, it’s little surprise investors are taking their foot off the gas.
Donald Trump has accepted an invitation to visit his Chinese counterpart Xi Jinping after a ‘very good’ phone call on trade. But that wasn’t enough to provide a boost to Asian markets, which largely traded sideways. Japanese indices recovered some, but not all, of the week’s earlier losses. Data showing an unexpected fall in April’s consumer spending saw odds fall of an interest rate hike when the Bank of Japan next meets on 17 June.
There’s little action to report on European exchanges either, following yesterday afternoon’s widely anticipated 25 point cut to interest rates by the European Central Bank.
US indices had a slight dip yesterday, weighed down by Tesla shares which tanked 14%, instantly destroying $152bn for shareholders after a row erupted between former besties Musk and Trump. The pair traded insults on their respective social media platforms, and with the President threatening to pull the Tesla CEO’s governmental subsidies and contracts.
Otherwise, it was a largely uneventful session on Wall Street. Looking to the open, US futures are pointing up around 0.3% as markets eye up jobs reports for later today. The print’s expected to show unemployment stable at 4.2% despite a forecasted slow-down in the rate of non-farm payroll growth in May to about 130,000 compared to around 180,000 for each of the previous two months.
Brent crude oil prices are broadly flat this morning holding onto gains of around 4% accumulated over the week, clawing back some of the losses seen in recent weeks. It’s mainly short- term factors that have been influencing traders right now with falling US inventories raising hopes for high seasonal demand over the peak summer travel season. Wildfires in Canada continue to burn tempering fears of oversupply but that may be short lived as OPEC+ nations plan to lift production by 411,000 barrels per day next month. “
Matt Britzman, senior equity analyst, Hargreaves Lansdown:
“Just when Tesla investors were hoping for a period of calm on the global political stage, Elon Musk has started a new war of words, this time with the very man he’s been so voraciously backing – President Trump. Government spending is the topic in question, with Musk perhaps one of the harshest critics of Trump’s so called Big Beautiful Bill that some forecasts suggest will add $2.4 trillion to the US debt mountain by 2034.
Investing in Tesla isn’t for the faint of heart, and Musk’s enthusiasm for topics close to heart is both a blessing and, at times, a curse. Let’s not forget, Tesla has its own battles, with disappointing sales numbers and brand damage weighing on sentiment in the near term. For now, markets are willing to look past the weakening auto business with AI and automation the real prizes. But with such a pivotal few months ahead for the autonomous strategy, investors will want to see Musk give his full attention back to Tesla.”
The author holds shares in Tesla
