| UK & US Equities (week ending 06.06) | Notable Markets (week ending 06.06) | ||||
| Index | Close 06.06 | Week | Market | Close 06.06 | Week change |
| FTSE 100 | 8,837.90 | 0.75% | Gold Futures | 3,375.10 | 2.62% |
| FTSE 250 | 21,157.30 | 0.61% | Bitcoin (Friday) | 104391 | 0.34% |
| FTSE AIM 100 | 3,667.39 | 1.43% | UK 10yr GB Yield | 4.65% | 0.00% |
| S&P 500 | 6,000.36 | 1.50% | CBOE Volatility (VIX) | 18.48 | -0.47% |
| Dow Jones | 42,762.90 | 1.17% | Euro STOXX 50 | 5,430.17 | 1.18% |
| NASDAQ 100 | 21,761.80 | 1.97% | GBP/USD | 1.3526 | 0.45% |
Source: ShareScope
Markets Recap
US equity stocks closed higher last week, with the S&P 500 rising 1.5% to close just above the 6,000 mark, whilst the Nasdaq 100 and Dow gained 2.0% and 1.2% respectively. A notable feature of the rally was its broadening participation. Unlike the initial phase of the market’s recovery from Donald Trump’s Liberation Day tariffs, where gains were largely concentrated in the “Magnificent 7” tech stocks, the rising advance-decline (A/D) line now signals that a greater number of stocks are contributing to the uptrend. This suggests that the market move is healthier and more sustainable than it was a short while ago.
Economic data presented a mixed but ultimately reassuring picture. Midweek, ADP private payrolls came in at just 37,000, the weakest reading in two years, sparking fears of a slowdown. However, Friday’s non-farm payrolls report slightly exceeded expectations with 139,000 jobs added along with steady wage growth, easing recession concerns and pushing back immediate expectations for Federal Reserve rate cuts. Treasury yields rose modestly, and risk appetite held firm.
Thursday saw a spectacular public blow up in the Trump-Musk bromance. Musk intensified his criticism of the President last week, accusing him of fuelling the deficit after earlier labelling his “Big Beautiful Bill” as a “disgusting abomination”. Trump threatened to pause EV subsidies in response, a move which would hurt Tesla. Musk escalated the row on X, accusing the President of being tied to Jeffery Epstein. Trump then labelled Musk “CRAZY” and threatened to terminate government contracts in what would be a major blow to SpaceX. Musk went on to hint at the creation of a third political party, causing the President to call off any kind of reconciliation and warn of “serious consequences” if the billionaire were to back the Democrats. The row had a pronounced effect on Tesla’s share price, with the EV manufacturer falling 14.3% on Thursday alone, as the volatility spilt over into the tech sector more broadly, contributing to a 0.8% drop in the Nasdaq 100 for the day.
UK stocks continued to push closer to all-time highs last week. Financials received a boost from resilient US jobs data, which indicated that the Federal Reserve would be in no rush to lower interest rates, which tends to benefit banks. The mid-cap FTSE 250 Index posted modest gains, with Alphawave and Spectris trading significantly higher on Monday following takeover bids from Qualcomm and Advent respectively, a sign that M&A activity is rebounding.
Notable Corporate Earnings Reports
No FTSE 100 companies reported earnings last week. In the US, Broadcom, CrowdStrike, Dollar General, and DocuSign were amongst the larger names to report.
Despite slightly bettering analyst estimates, Broadcom fell 5.0% as a result of not quite meeting the lofty expectations set by the market in the run up to earnings. The semiconductor and infrastructure software designer has spoiled investors in recent quarters, posting revenue and earnings growth far in excess of expectations, causing the market to get slightly ahead of itself in terms of expectations. Broadcom is still positive on the year and is well positioned to benefit from the ever-rising wave in AI capex.
Cybersecurity market leader, CrowdStrike, met revenue estimates and beat on earnings, as well as announced a $1 billion share buyback. However, the stock fell 5.8% as a result of management issuing weaker than expected guidance on current quarter revenue.
Dollar General’s stock surged 15.9% as the discount retailer beat by a healthy margin on both revenue and earnings expectations. The company also raised its outlook, saying it drew in more middle- and higher-income shoppers due to fears that tariffs would push up prices.
Docusign cratered 19.0% on a surprise miss in billings growth, followed by a cut to guidance.
Upcoming Data Releases
This week is relatively busy in terms of macroeconomic data releases on both sides of the Atlantic. Wednesday brings US headline and core inflation data for May, with comparisons of both month-on-month and year-on-year. The previous three months have seen the year-on-year rate decline. Pressure will be ratcheted up on the Federal Reserve to cut rates if this trend continues.
US producer price inflation for May will be reported on Thursday. Another move lower following the retreat from January’s highs of 3.8% will result in further calls for Jerome Powell to loosen monetary conditions.
The Michigan Consumer Sentiment survey for the first half of June will be published on Friday. The survey, which has seen readings dive from 71 at the beginning of the year to 52 last month, gives insight into how confident respondents feel about the state of the economy and prospects for consumer spending.
In the UK, we will get the unemployment rate on Tuesday. The Labour government will be hoping that there will not be a continuation in the uptrend, which has been in place since mid-2022. GDP for April will be reported on Thursday. The UK has had a strong start to the year, most notably in February, where the economy surprised with a 0.5% expansion from the month prior.
Upcoming Corporate Earnings Reports
In the US, Adobe and Oracle are due to report this week. The former will be looking to buck the trend of recent disappointing earnings, largely resulting from disruption in the design space from AI competitors. Oracle on the other hand will be looking to take capitalise on the continued growth in cloud computing.
Halma is the only FTSE 100 company reporting this week. Investors will be looking for evidence that the company’s recent M&A activity is beginning to bear fruit in both the top and bottom line.
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