- FTSE 100 edges higher on rate cut hopes
- UK consumers show early signs of pressure
- US markets hover near all-time highs as US-China talks continue
- Apple fails to ignite the AI flame
- Oil jumps to its highest level in over a month
Matt Britzman, senior equity analyst, Hargreaves Lansdown:
“UK consumers are starting to lose some steam, as retail sales in May grew at their slowest pace in six months and the labour market shows signs of cooling. Still, the FTSE 100 opened higher at the open, on hopes that the easing wage pressure will prompt further rate cuts from the Bank of England.
A few factors are likely at play – ranging from the lingering effects of higher prices to growing uncertainty about the future. While we haven’t yet heard from the major retailers, these numbers suggest the environment is getting tougher. Supermarkets are still holding up well, with food sales rising 3.6%, but non-essential items took a hit in May. One month doesn’t make a trend, but in the current climate, modest, low single-digit growth is likely where retail sales are headed.
The S&P 500 and Nasdaq are inching back toward their record highs after a strong two-month comeback. Yesterday was a quiet session and futures suggest a muted open later as well, with investors tuned into trade talks between the US and China in London, where officials called the conversations “fruitful” and said they’ll pick things up again today. As far as the first day goes, this was probably as positive as investors could have hoped for. A report from the New York Fed showing lower inflation expectations gave the market a little extra lift, just ahead of key inflation numbers coming this week.
Apple kicked off its world-renowned developer conference yesterday, but the opening day made more of a splash than a bang. A flashy new operating system is on the way for all Apple devices – though on first look it may come with some readability issues – along with broader tools to help developers integrate AI into their apps. Still, there was a clear sense of frustration among investors, who were hoping for more substance around Apple’s slow-moving AI strategy. The company was late to the AI party, stumbled with the initial rollout of its “Apple Intelligence” features, and it’s not immediately obvious what the catch-up plan is. What Apple does have in its corner is a massive and loyal customer base, which gives it time to get this right – but it needs to start making progress.
Oil climbed to around $67.30 a barrel this morning – its highest level in over a month – as markets pinned hopes on progress in US-China trade talks. At the same time, ongoing geopolitical tensions and OPEC+ supply moves are keeping traders on high alert.“
