- FTSE 100 bounces back
- NASDAQ leads US futures higher
- Meta soars after Q4 results
- No change to Fed rates, Powell surprised by US economic strength
- Brent Crude reaches four-month high as Iran standoff intensifies
- easyJet shares up despite widening winter losses
- Tesla goes all in on robots and driverless cars
- Investors take glass half empty approach to Microsoft numbers
Derren Nathan, head of equity research, Hargreaves Lansdown:
“The FTSE 100 has bounced back this morning after losing half a percent yesterday. Lloyds kicked off earnings season for the UK banks with a profit beat, while easyJet revealed strong momentum in forward bookings.
After a steady session yesterday, which briefly touched fresh highs, US stock futures are up slightly with the NASDAQ posting the biggest gains after earnings beats across the board for Tesla, Meta and Microsoft. There were after-hours gains for Tesla and Meta as investors embraced Mark Zuckerberg’s turbo charged investment plans to bridge the AI gap, and Elon Musks vision of tomorrow’s world. However, Microsoft stock devalued by 6%, with in-line cloud growth of 39% not enough to lift spirits as markets focussed on lighter than expected margin guidance.
As expected, there were no changes to US base rates yesterday, but Jerome Powell’s commentary painted a picture of underlying strength in the world’s largest economy, which even he admitted had caught him by surprise. Easing inflation, solid growth and stable employment mean the bank’s in no hurry to cut rates again with markets not expecting a further cut before Powell’s scheduled departure in May.
As it stands, his successor looks set to inherit an economy heading for a soft landing, or better still, no landing at all. But he was quick to stress the importance of continued independence and the need to steer clear of elected politics, most likely a response to Donald Trump’s continuing pressure for looser monetary policy. If the economy is allowed to overheat, there’s a chance that these solid foundations start to crack.
Brent Crude oil is now at over $69 per barrel, the highest level seen in four months as the war of words between hardened leaders Donald Trump and Iran’s Ali Khamenei ratchets up. If this spills over into military conflict, the concern for energy is not only over 3 million barrels of daily oil production but also disruption to tankers carrying oil and Liquid Natural Gas through the Strait of Hormuz”
Aarin Chiekrie, equity analyst, Hargreaves Lansdown:
“easyJet’s top line continues to roar ahead, helped by strong demand in its package holiday arm as the group landed its largest-ever January booking period. While the top line is flying in the right direction, headlines will likely be grabbed by growing winter losses. However, that was already expected as easyJet looks to set up new strategic bases in Milan and Rome. It also misses the bigger picture: easyJet’s underlying performance continues its ascent.
The no-frills airline is doing a great job of growing its fleet and, on average, more of the available seats are being filled by jetsetters. That’s good news for investors. Given the high fixed costs associated with flying planes, keeping them as full as possible is key to profitability. Total costs are only expected to rise modestly this year, helped by a continued easing of fuel costs. This is the group’s largest cost, equivalent to around 23% of revenue. With jet fuel prices sitting below the rates locked into its current hedges, there should be a continued benefit to the bottom line through 2026 and 2027 as it locks in new fuel hedges at lower rates.
The package holiday arm delivered another period of impressive growth, with revenue up 26% over the first quarter. Given that the addressable market for package holidays is huge, there’s a long runway ahead for this segment if it can keep nailing delivery. With a favourable long-term outlook and a solid balance sheet, there’s room for upside to the current valuation.”
Matt Britzman, senior equity analyst, Hargreaves Lansdown:
“S3XY is no more, as Tesla slams the accelerator on its evolution from carmaker to autonomous giant. This quarter’s numbers were almost a footnote, though they were actually fairly solid, with auto margins picking up and strong cash flows. What really grabbed attention was Elon Musk’s torrent of big reveals, each one painting a picture of a very different Tesla a few years from now. The call felt less like earnings and more like a curtain‑raiser for a tech future Tesla insists it’s already building.
The headline move was a near‑doubling of 2026 capex to $20bn, signalling Tesla’s intent to build everything at once. New Cybercab facilities, Tesla Semi production, retooled lines shifting from S and X to its humanoid robot Optimus, data centre expansions – the to‑do list reads like a manifesto. The key is consistent progress, and that’s what we’re seeing. Tesla is currently part manufacturer, part venture lab, with unlimited ambition and a war chest to back it up. That pitch‑deck energy is exactly what keeps investors hooked and continues to support the lofty valuation. Still, sentiment needs something to feed on, so 2026 needs to be a year of consistent progress with the full self-driving system, rapid Robotaxi expansion, sprinkled with news on the dangling carrot that is Optimus.
Microsoft’s 6% after‑hours drop feels harsh, but it speaks to a market that’s looking at a stock caught between being an AI‑infrastructure powerhouse and a software giant facing, somewhat unjustified, disruption fears. Guidance for next quarter came in a touch soft, and with nearly half of the cloud backlog tied to OpenAI, investors are jittery about what looks uncomfortably like a single point of failure. Still, the foundation remains strong – Azure cloud revenue is held back only by supply, not demand, and new compute capacity is already attracting long‑term, locked‑in customers.”
The author holds shares in Tesla.
