- FTSE 100 builds on yesterday’s gains
- UK retail sales offer hope ahead of key trading period
- Anglo and Teck merge to create global copper giant
- US markets gear up for data heavy week
- Oil prices extend yesterday’s gains
Matt Britzman, senior equity analyst, Hargreaves Lansdown:
“The FTSE 100 has opened higher this morning, building on yesterday’s gains after last week’s rally lost steam on Friday.
UK retail sales surprised on the upside in August, with like-for-like growth of 2.9%, the strongest in four months and well ahead of July’s 1.8%. Warmer weather and back-to-school demand lifted food and home-related categories, while non-food also managed a modest gain despite the gloomy macro backdrop. It’s another sign that discretionary spending is holding up better than feared, which could offer some relief for UK retailers as they move into the crucial autumn/winter periods.
Anglo American’s merger with Teck is its latest strategic pivot that cements copper at the heart of its portfolio. With over 70% copper exposure and a top-five global position, the combined group is positioned to ride the structural demand story tied to electrification and energy transition. The $800m in annual cost synergies and $1.4bn EBITDA uplift from Chilean asset integration are compelling. But the real prize is growth optionality, leveraging a pipeline of brownfield and greenfield projects across the Americas. For Anglo investors, the $4.5bn special dividend sweetens the near-term picture, while the long-term upside hinges on execution and a green light from the regulator. Back-of-the-hand maths suggests Teck holders are getting a healthy premium from the deal, and shares of the Canadian miner have soared in after-hours trading.
A quiet Monday masks a big week ahead for US markets, with the Nasdaq hitting an all-time high as tech and retail led a modest rebound. The S&P 500 added 0.5%, while the Russell 2000 lagged after its recent run. Treasury yields continued their descent, with the 10-year near 4%, its lowest in five months, and the 2-year hovering around 3.5%, levels last seen in 2022. Markets are fully priced for a 25bps cut this month, and expect more to come. With PPI, CPI, and a key labour revision on deck, plus long-term inflation expectations holding steady, the Fed has room to manoeuvre. But the data will dictate how far and fast easing goes.
Brent crude oil climbed above $66 a barrel this morning, still buoyed by news that OPEC+ opted for a modest 137,000 bpd output hike, far smaller than recent increases. Geopolitical risk added support, with Trump threatening tougher sanctions on Russia after its heaviest strikes on Ukraine since the war began. Gains were capped, however, as Saudi Arabia cut prices for Asian buyers, underscoring demand concerns.“
