Week in Review: 26th to 30th May
Another week, another wild ride! Whilst commentary started on the Big Beautiful Bill, US federal debt concerns and trade negotiations between the US and EU, the US Court of International Trade stepped up to kibosh Donald Trump’s tariff plans in their entirety, citing a widely touted overreach of power from the White House. This sent a rocket up markets, until everyone started to ponder the different options left to the Trump Administration. An appeal was lodged, and the tariffs will remain in place subject to the legal process. This halted further enthusiasm, and the market traded sideways to end the week.
Elsewhere, NVIDIA delivered the goods again and continue to prove the momentum in the AI infrastructure build out, upon which its GPUs are an essential ingredient, holds firm. It seems everyone has been waiting for the party to end, but the band is still playing, and the bar is still serving.
| UK & US Equities (week ending 30/5) | Notable Markets (week ending 30/5) | ||||
| Index | Close 30/5 | Week | Market | Close 30/5 | Week change |
| FTSE 100 | 8,772.38 | 0.62% | Gold Futures | 3,313.10 | -1.57% |
| FTSE 250 | 21028.01 | 1.54% | Bitcoin (Friday) | 103744 | -4.60% |
| FTSE AIM 100 | 3615.70 | 1.44% | UK 10yr GB Yield | 4.65% | -0.03% |
| S&P 500 | 5911.69 | 1.88% | CBOE Volatility (VIX) | 18.57 | -3.72 |
| Dow Jones | 42270.07 | 1.60% | Euro STOXX 50 | 5366.59 | 0.76% |
| NASDAQ 100 | 21,340.99 | 2.03% | GBP/USD | 1.3454 | -0.80% |
Word of the Week: TACO
Every now and then the stock market throws up a new parlance or acronym to describe its comings and goings. Think Mag 7, TINA, FOMO, FAANG etc. Over the past few months, as with his behaviours during his first term as President, we have become accustomed to what is known as the ‘Trump put’. This term implies that the President uses the stock market as a barometer for how well the economy is doing and will make announcements to change tack, or use social media to stoke confidence if policy announcements negatively impact markets, creating an insurance policy against further market falls. We saw this with his pausing of reciprocal tariffs in the face of a volatility spike and bond market melt down, along with a reversal on China as recent examples. Following the President’s step down from imposing 50% tariffs on the European Union, it was Taco Day. TACO being an acronym for ‘Trump Always Chickens Out.’
U.K. Market Performance
The FTSE 100 was up 54 points for the week or 0.62%. May saw its largest one month gain since January up 3.27% and snapped a 2-month losing streak. We are now 1.12% from its record close of 8871.31 on 3rd March. Year to date the FTSE 100 is up 599.36 points or 7.33%. Risk on sentiment buoyed miners, financials and industrials, whilst utilities and consumer staples fell given their defensive nature.
FTSE 100 Movers
Gainers: M&G Plc +7.7%, Glencore +6.4%, Unite Group +5.7%, Segro +5.5%, Land Securities +4.6%, GSK +4.6%, Anglo American +4.4%, Fresnillo +4.4%, Babcock +4.2%
Losers: Auto Trader -11.4%, Kingfisher -8.3%, Pearson -4.7%, National Grid -4.5%, Coca Cola Hellenic -3.7%, Rio Tinto -3.4%, Compass Group -3.3%, Games Workshop -3.3%
Macro
- Bank of England officials shared cautious views. Alan Taylor said recent inflation was likely due to temporary factors and warned of risks from new tariffs. Governor Andrew Bailey called for a stronger UK-EU trade deal to support growth and ease Brexit-related disruptions.
- The Confederation of British Industry distributive trade survey’s retail sales balance fell to -27% in May from -8% in April, according to data published Tuesday. The consensus estimate was -18% for the month.
- Food inflation rose by 2.8% year-on-year in May, according to the British Retail Consortium (BRC).
- The International Monetary Fund said Tuesday the UK’s “persistently weak” productivity remains the main obstacle to boosting its growth and living standards. The IMF noted that the country’s slowdown in productivity – worsened by Brexit, the COVID-19 pandemic and the energy price crisis – is mainly due to chronic under-investment, low private research and development and skill gaps, among other things.
Notable Corporate News:
– M&G led the gainers this week, announcing a partnership with Japanese insurer Dai-ichi Life. M&G will be Dai-ichi’s preferred asset manager in Europe and Dai-ichi will also take a 15% stake in M&G along with a board seat.
– National Grid closed the sale of its renewables business to Brookfield.
– Despite reporting solid in line earnings and a well-maintained market position, Auto Trader was one of the worst performers in the index. Given they have risen 23% over the past year, investors may have been wanting a positive surprise. Car supply and car financing regulatory issues weighed on the company, however management reiterated their strong position and highlighted near term prospects.
U.S. Market Performance
The macro picture has turned more positive and corporate earnings overall were solid. Risk on sentiment prevailed with the S&P 500 rising 1.88% and leading to a 6.15% gain for May, its best month since November 2023. The index is now 3.78% shy of its record close on 19th February.
S&P 500 Movers
Gainers: Ulta Beauty +17%, Hologic +15%, Warner Bros. +12.7%, Royal Caribbean +10.3%, Nordson +10%, Lamb Weston +9.9%, Enhpase +9.6%, Southwest Airlines +9%
Losers: Regeneron Pharma -16.5%, The Cooper Companies -12.9%, Texas Pacific Land -11.3%, Copart -10.4%, HP -10%, Cadence Design -8%, Synopsys -6.3%, Coinbase -6.2%
Macroeconomic Data
FOMC Minutes: The Federal Open Market Committee can wait for more clarity on the progression of the economy before making changes to policy.
“In considering the outlook for monetary policy, participants agreed that with economic growth and the labour market still solid and current monetary policy moderately restrictive, the Committee was well positioned to wait for more clarity on the outlooks for inflation and economic activity,”
Consumer/Retail: U.S. consumer confidence improved in May after deteriorating for five straight months. The Conference Board’s Consumer Confidence index increased 12.3 points to 98.0 this month. Economists polled by Reuters had forecast the index inching up to 87.0. The Redbook Index indicated a 6.1% year on year increase in retail sales in May.
Labour Market The weekly jobless claims bulletin showed new unemployment claims rose to 240,000 in the week ended May 24 from 226,000 in the preceding week, compared with estimates for a smaller increase to 230,000. Could this start accelerating?
Economic Growth The Q1 GDP was negative for the quarter. The report showed a revised contraction of -0.2%, compared with estimates compiled by Bloomberg for a no revision at -0.3%.
Inflation The Fed’s preferred inflation measure, PCE price index came roughly in line with expectations, with both the headline and core readings edging up 0.1% month-over-month. On an annual basis, both measures slowed, offering some relief over inflation pressures.
Corporate Earnings
AI Infrastructure
NVIDIA (NVDA) beat earnings expectations with Q4 EPS of $0.89 beating the $0.85 expected. The company also gave slightly higher than expected revenue guidance for the next quarter. Despite the strong result, the market enthusiasm was short lived, indicating a high hurdle of investor expectation. Dell reported strong earnings on the back of increased demand for AI servers, with shares rising following the announcement. Marvell demonstrated and increased in AI attributed demand, but shares fell despite positive earnings. Synopsis initially reported stronger than expected results, however management withdrew guidance for the current quarter and remainder of the fiscal year citing issues surrounding U.S export restrictions to China, sending the stock down.
Enterprise Software, cloud and cybersecurity
Salesforce reported quarterly earnings that led to a 3% decline in share price, indicating results have fallen short of investor expectations for higher growth amidst the rollout of its new Agentforce Agentic AI offering. Zscaler reported adjusted EPS of $0.78, exceeding the anticipated $0.63. Market reaction was positive, with shares rising 8% as the company raised its annual forecast, driven by strong demand for its Zero Trust platform and AI integration.
Okta reported impressive earnings and revenue growth for Q1, however a cautious outlook from management pointed to slower sales growth expectations for future quarters, albeit at a 9-10% increase on last year, resulting in a 16% drop following their announcement. There was a similar story for NetApp who announced better than anticipated earnings and revenue growth, however management highlighted mixed signals for the global macroeconomic outlook reflecting an overall slowdown in growth, lingering inflation concerns and a significantly higher uncertainty for future revenue.
Consumer Discretionary
Costco’s Q2 FY2025 revenue was $63.7 billion, up 9% year-over-year, exceeding expectations. EPS was $4.03, slightly below the anticipated $4.11. Shares increased by nearly 3% post announcement, reflecting investor confidence in the company’s performance despite the slight EPS miss. Ulta Beauty’s Q1 FY2025 revenue rose 4.5% to $2.8 billion, surpassing expectations. Adjusted EPS was $6.70, smashing the $5.81 estimate. Comparable sales increased by 2.9%. Management raised annual profit forecast to between $22.65 and $23.20 per share. Shares surged approximately 14% following the strong earnings report and raised outlook, given the strength of the result and possibly that investors were cautious leading into the announcement. Electronics retailer Best Buy announced that it had raised its prices to offset tariff-related costs, noting that demand had held up well so far. However, the company also cut its annual sales and earnings forecasts. Similarly, department store operator Macy’s stated that shoppers appeared to be purchasing more items now, ahead of upcoming price increases. Despite robust sales and earnings in first-quarter fiscal 2025, The GAP Inc’s shares fell more than 15% following their earnings announcement. If the existing tariffs of 30% on most imports from China and 10% on most imports from other countries remain for the rest of the year, management forecasts a gross incremental cost of about $250-$300 million. Burlington Stores’ fiscal Q1 earnings topped market estimates and, while the CEO expressed confidence that the company can offset tariff-related headwinds at current levels, their shares still ended the week circa 6% lower.
The Open: Monday 2nd June
The FTSE 100 has opened the week flat. The weekend bought more trade war drama as Donald Trump, fresh off doubling tariffs on steel on Friday, accused China of violating the terms of their deal. China has its own accusations against America and has threatened to take action to defend its interests. As a result, it will be a risk off day. The Hang Seng dropping 2.5% before recovering, whilst the Japanese Nikkei is down over 1%. European stocks have fared worse than the UK, with the German DAX down around 0.66% and the French CAC down around 0.8%. S&P 500 futures are pointing down 0.5%. Gold up nearly 2%, US 10-year treasury yields edge higher, and the pound has strengthened, now buying over $1.35.
Week Ahead: 2nd to 6th June 2025
UK Macro
Monday: Nationwide Housing Prices, BoE Consumer Credit, Mortgage data and money supply, S&P Global Manufacturing PMI
Wednesday: Composite PMI and Services PMI
Thursday: Construction PMI, New Car Sales,
Friday: Halifax House Price Index
Earnings: Wise Plc
US Macro
Monday: Fed Speech (Waller & Goolsbee), ISM Manufacturing PMI,
Corporate Earnings
Tuesday: JOLTs Job Openings, Fed Speeches Goolsbee and Logan
Wednesday: ADP Employment Change, ISM Services PMI, Fed Speech Bostic, Fed Beige Book
Thursday: Balance of Trade, Initial & Continuing Jobless Claims
Friday: Non-Farm Payrolls, Unemployment Rate
Upcoming Corporate Earnings winds down for the Q1 season
Tech & Cybersecurity
Expectations are high for cybersecurity leader CrowdStrike following strong sector demand and growing enterprise security spend. With AI-driven threats on the rise, investors will watch annual recurring revenue (ARR) growth and margin improvement. Guidance updates will be key, especially amid heightened competition.
MongoDB has benefitted from the AI fuelled backend demand, but the focus will be on Atlas (its cloud product) growth and any signs of slowing enterprise deals in the current macro backdrop.
Semiconductor and infrastructure software giant Broadcom will be closely scrutinised for its AI-related revenue and VMware integration progress. Investors expect clarity on margin trends and long-term guidance following a robust run in the stock.
Credo Technology (CRDO) could benefit from tailwinds in AI data centre buildouts. Analysts are watching for signs of design wins and stronger than expected sales to hyperscalers or OEMs.
Fresh off its recent IPO, cloud data management and security provider Rubrik will report its first earnings as a public company. With a focus on data protection and cloud security, growth in annual recurring revenue and customer adoption will spark interest.
Hewlett Packard Enterprise continues pivoting towards edge computing and AI infrastructure. Expect commentary on demand for its GreenLake platform and enterprise IT spending trends, especially given peer experiences amidst macro uncertainty.
DocuSign will be pressed on how it’s navigating post-pandemic demand normalisation. Key metrics include customer retention, eSignature volumes, and early traction of newer offerings like AI driven intelligent agreement analytics.
Retail & Consumer
Dollar General and Dollar Tree both face pressure from inflation-strained consumers. Analysts expect commentary on price sensitivity, traffic trends, shrinkage (especially for Dollar Tree), and rural vs. urban performance. Dollar Tree’s restructuring plans may also dominate headlines.
After recent mixed retail data, all eyes are on Lululemon Athletica’s same-store sales and international expansion. The athleisure giant must also convince investors that its momentum in men’s apparel and footwear is sustainable.
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