- FTSE up at the open.
- Significant reduction in UK public borrowing.
- Surge in UK retail sales in January.
- US stock futures are pointing higher.
- Amazon dethrones Walmart as the largest company by revenue.
- Brent crude prices rise to a six-month high over US-Iran fears.
- Gold edges higher, despite resilient US jobs data.
Aarin Chiekrie, equity analyst, Hargreaves Lansdown:
The FTSE 100 has opened higher this morning, supported by news of a significant reduction in public borrowing and a surge in January retail sales. For context, the UK government almost always runs a budget surplus in January, but this year’s £30.4bn was the largest on record, well ahead of market expectations and more than double the prior year’s level of £14.5bn. The 1.8% month-on-month uplift in retail sales volumes was also well ahead of forecasts for 0.2% growth, driven by gains across all major categories except department stores. That leaves sales volumes at their highest level since August 2022. But with employment growth flagging and wage growth slowing, households likely won’t be able to maintain this level of spending for long.
US stock futures are also trading higher this morning, following the recent AI-related tech sell-off. Many of the big tech names are now among the most under-owned by institutional investors, relative to their sector weighting. After Walmart’s results yesterday, Amazon has officially dethroned it as the biggest global company by revenue. Equipment and infrastructure names continue to perform well, with agriculture equipment maker Deere & Co. pushing on from a strong year-to-date start as first-quarter numbers came in better than expected. 2026 guidance has also been raised above consensus expectations, which sent the shares up nearly 12% yesterday, taking the year-to-date gains to more than 42%.
Brent Crude prices rose to just over $72 per barrel this morning, hitting a six-month high and marking a weekly gain of more than 5%. The higher prices are being driven by fears over potential future supply disruptions as President Trump set a deadline for Iran to reach a nuclear agreement. Negotiations have no more than 10-15 days left to advance, and to put pressure on Iran, the US has deployed its largest military buildup in the Middle East since its 2003 invasion of Iraq.
Gold prices have edged higher to around $5,010 on Friday as rising geopolitical tensions, particularly around Iran, were enough to offset tempering expectations for rate cuts by the Fed following stronger-than-expected economic data. US jobless claims fell to 206,000 (225,000 expected), highlighting resilience in the labour market. Some policymakers are even considering rate hikes in the near future if inflation remains elevated.
