- FTSE 100 briefly shoots past 9000 mark in early trade.
- UK retail sales accelerate in June, helped by the steamy weather.
- Chancellor’s Mansion House speech awaited for plans to spark an investment culture in the UK.
- Financial Conduct Authority eases rules on prospectuses and launches new funding platform.
- China’s economy slows less than expected in a show of resilience.
- Thames Water’s debt mountain becomes even more precarious.
- Brent Crude trades around $68 dollars a barrel as Trump extends Russia sanctions deadline.
- Nvidia is set to resume selling its China-specific chips to China.
Susannah Streeter, head of money and markets, Hargreaves Lansdown:
‘’Tariff tensions are still swirling but the Footsie found a pulse of positivity in early trade shooting past the 9,000 mark. The move comes just as measures are unveiled to try and revitalise the London market. Experian has shot to the top of the leader board, after posting a strong set of numbers. The global data and tech company, famous for providing credit scores, saw total revenue growth come in at 12% for the first quarter. With the outlook unchanged, despite the unpredictable economic climate, it’s reassured investors and seen shares make strides.
Steamy temperatures and sports and music events meant the sun shone on UK retail sales in June. According to the British Retail Consortium, sales accelerated in June, coming in at 2.7% significantly ahead of the 0.2% forecast. Warmer weather and Wimbledon’s tennis fever sparked a sportswear buying frenzy. There will be hope that an Oasis oomph may benefit retailers in July, as fans snap up bucket hats and memorabilia during their hyped reunion tour around the UK. Summer surges of spending enthusiasm around tours and events are becoming part of the calendar. June’s retail boost hasn’t moved retailers much on the London market, with investors seemingly still wary about the underlying confidence of consumers.
There are hopes the Chancellor’s Mansion House speech later will provide sparks to ignite an investment culture in the UK. The Financial Conduct Authority has already revealed changes in prospectus rules which should encourage more companies to raise money on the London market and make the UK more attractive place to list. In addition, it will result in more capital raisings being open to retail investors. One of the big challenges faced by companies hoping to raise capital was knowing where to look and which levers to pull. The lack of a centralised funding platform made it a much harder slog. So, the establishment of public offer platforms marks a big step of progress. Companies will be able to use the platform to offer big chunks of bonds or shares without needing to compile a costly and lengthy prospectus. Crucially, offers will also be available to retail investors via authorised firms. The public are used to the crowdfunding concept so this should help spark the imagination and revitalise interest in investing. By fostering a retail investment culture and making UK markets a more attractive place for listings, it will help build a more dynamic and equitable financial ecosystem. It’s still not going to be easy to compete against the might of New York, but with continued collaboration across the industry, these changes should provide more fuel to power an engine of growth and innovation.
President Trump has that the door to the Oval office was still open for talks with trade partners. After an early wobble, indices in Europe gained back ground. The EU came out fighting yesterday after being threatened with 30% tariffs, promising countermeasures. The US President says he’s still willing to talk to nations who are facing onerous duties. As well as the EU, Mexico, Japan, South Korea and Canada face duties of 25- 35%. Although there remains hope that there will be deals done to lower the cost of doing trade with the United States. However, the baseline assumption that most negotiations will end with a 10% blanket tariff with some exemptions, as agreed with the UK, is being tested.
US futures point to another positive open later today as investors prepare for this week’s crucial inflation numbers. US Consumer price inflation numbers are out later, and markets are expecting a small tick higher than the 2.4% year-on-year rise seen in May. This data is crucial if markets want to keep their steam. Any indication that tariffs are starting to have a meaningful impact on consumer prices would add fuel to the Fed’s wait-and-see approach to cutting interest rates. On the flip side, continued signs that the tariff impact is limited will give plenty of ammunition for President Trump to continue his verbal attacks against Fed Chair Jay Powell for not cutting quick enough.
China’s defensive measures against the trade threats from Trump have been paying off. The latest growth figures showed that the economy slowed less than expected, in a display of strength against adversity. Expansion of 5.2% year-on-year for the second quarter in Q2 2025, still marked a slowdown, but it the number came in slightly above forecasts. Industrial production also saw a unexpected pick up, accelerating 8% year-on-year. The partial deal agreed with the US administration is likely to have helped boost business confidence, despite the longer-term uncertainty remaining. However, consumers are still highly cautious, with their resilience tested by the after-effects of the property crisis and fractious international relations. Retail sales grew at the slowest pace in four months, and the lack of domestic demand is likely to prompt authorities into considering more stimulus measures.
Oil prices have eased off, after Trump retreated from what appeared to be an immediate threat to impose secondary tariffs on Russia. The US President has become famous for pushing back deadlines, and he’s now given Moscow 50 days to reach a peace agreement with Ukraine. This has eased some concerns about global crude supplies. Nevertheless, the US does appear to be trying to turn the screws tighter on Russia, with Trump appearing increasingly frustrated by Putin’s intransigeance. He has threatened sanctions on buyers of Russian exports unless Russia agrees a peace deal, and in the meantime has agreed to supply air-defence systems to Ukraine.
Thames Water’s debt mountain has become even more precarious. The leaky utility appears to be lurching from crisis to crisis. It’s sunk to a £1.65 billion annual pre-tax loss, from profits of £157 million the previous year. Debt continues to pile up, now at £16.8 billion and counting. Given the deteriorating state of its finances, it’s little wonder private equity firm KKR pulled out of a rescue deal last month. It makes ongoing talks with senior creditors to recapitalise the business even more urgent. Thames Water has been hosed down for imposing a hosepipe ban, with the GMB union pointing out that 200 billion litres of water had leaked from its systems over the past year.
Matt Britzman, senior equity analyst, Hargreaves Lansdown.
‘’Nvidia is set to resume selling its China-specific chips after CEO Jensen Huang met with White House officials to iron out the details. This is a major catalyst for Nvidia shares, as many had written off the chance of any meaningful revenue coming from China after the White House blocked the sale of Nvidia’s weaker H20 chips a few months ago. Not only does this represent incremental upside to future revenue, to the tune of $15-20 billion this year, depending on when approval is granted and how quick deliveries can ramp back up. But there’s also a chance Nvidia can reverse some, or all, of the $5.5bn impairment charge taken in the first quarter, providing a double boost for earnings.’’
