Week in Review: 12-16th May
The week represented a dramatic turnaround for markets that had been negatively impacted by trade tensions in previous weeks, with both US and UK markets posting substantial gains as investor confidence returned. A week after erasing liberation day falls, US equities have now erased their losses since the start of the year.
The biggest market event of the week was the surprise agreement between the US and China to significantly reduce tariffs. The US and China agreed to slash most tariffs to 30% and 10% respectively for a 90-day period while further trade talks continue. Trump’s visit to the Middle East has proven fruitful with large investment pledges secured from Saudi Arabia, UAE and Qatar. Especially in the areas of AI, semiconductors, defence and aviation, positively impacting the likes of NVIDIA and Boeing.
| UK & US Equities (week ending 16/5) | Notable Markets (week ending 16/5) | ||||
| Index | Close 16/5 | Week | Market | Close 16/5 | Week |
| FTSE 100 | 8,684.56 | 1.64% | Gold Futures | 3,205.30 | -4.11% |
| FTSE 250 | 20964.23 | 2.24% | Bitcoin (Friday) | 104067 | 0.82% |
| FTSE AIM 100 | 3554.69 | 1.38% | UK 10yr GB Yield | 4.65% | 0.08% |
| S&P 500 | 5958.38 | 5.03% | CBOE Volatility (VIX) | 17.24 | -4.79 |
| Dow Jones | 42654.74 | 3.17% | Euro STOXX 50 | 5427.53 | 2.22% |
| NASDAQ 100 | 21,427.94 | 6.81% | GBP/USD | 1.3282 | -0.17% |
American shares are now flat year to date (in US Dollars)
The S&P 500 index has erased all losses for 2025. It is as if nothing has happened since the start of the year. The reality is far different. American investors have been on a white-knuckle ride, facing a sharp market correction that briefly touched bear market territory, while predictions of recession and stagflation dominated the consensus. Then, within a couple of weeks, it all went away. The S&P 500 has rallied about 20% from its post liberation day lows and is now a couple of hundred points shy of all time highs! But for British investors in US stocks? Not so much. Yes, UK investors in US ETFs have seen a strong bounce too, but when considering the US dollar’s value in sterling has fallen, when we convert back, we are getting less pounds for the same dollars. With a circa 10% strengthening in pound sterling v the greenback; British investors are still down about 6% holding the same S&P 500 index ETF unhedged.
Demonstrating the impact of currency risk – VUSA (Vanguard S&P 500 ETF (GBP)- unhedged) in blue vs IGUS (iShares S&P 500 ETF- GBP hedged) in pink. Source: SAXO Markets.
U.K. Market Performance
The FTSE 100 extended its winning streak, with UK equities closing higher on Friday as the global tariff de-escalation supported risk appetite. The index is up 13.09% from its April lows, up 6.26% year to date and now just 2% shy of its all time highs set in March.
FTSE 100 Movers
Gainers: Airtel Africa +13.6%, Int’l Consolidated Airline +10.4%, JD Sports +9.7%, Entain +9.7%, Standard Chartered +7.9%, Polar Capital +6.6%, Convatec +6.2%
Losers: Imperial Brands -12.4%, Endeavour Mining -6.8%, 3I Group -5.3%, DCC -4.3%, Tesco -4.3%, Frensillo -2.4%, Coca Cola EuroPacific -2.4%, Unilever -2.09%
Macro
Economic Growth: The UK economy expanded more than anticipated in the first three months of 2025 after virtually stagnating in the previous two quarters, reflecting the services sector strength and an increase in production. Britain’s gross domestic product grew 0.7% in the first quarter, following a 0.1% increase in the previous three-month period and beating the consensus estimate of a 0.6% rise per the preliminary data from the ONS. On a yearly basis, the economy grew 1.3%, against expectation of 1.2% and last reporting period’s 1.5%. Services output rose 0.7% in the first quarter, while production grew by 1.1%. Construction was flat over the three-month period, pointing to continued uncertainty in housing and infrastructure activity. Business investment in the UK gained 5.9% on a quarterly basis in the three months to March, compared with the 1.9% decline in the prior quarter.
Trade: The UK Trade deficit shrank to £3.7b in March from £4.86b in February.
Labour market: the Office for National Statistics showed that the UK unemployment rate grew to 4.5% in the quarter to March, in line with the consensus, up from the previous reading of 4.4%. The annual growth in average earnings excluding bonuses stood at 5.6%, while total earnings including bonuses rose 5.5%.
Retail Sales: Retail sales in the UK gained 6.8% year over year on a like-for-like basis in April following a 0.9% rise in the previous month, according to data from the British Retail Consortium published Tuesday. The reading beat the consensus estimate of a 2.4% increase, signalling the fastest growth in over three years. The jump was primarily attributed to Easter coming in April and the favourable spring weather.
Notable Corporate News:
U.S. Market Performance
Market Jump: US markets posted their strongest single-day gains in over a month on Monday, with the Dow jumping nearly 1,200 points (2.8%), S&P 500 up 3.3%, and Nasdaq Composite surging 4.4%.
S&P 500 Erases 2025 Losses: By Tuesday, the S&P 500 had erased all of its losses for 2025, driven by tech stock rallies. The Nasdaq had recovered dramatically, up 30% from its April low.
S&P 500 Movers
Gainers: Super Micro Computer +43.6%, First Solar +33%, NRG Energy +32%, Tesla +20.6%, Dell +17%, Carnival +15.6%, NVIDIA +15/4%, Stanley Black & Decker +14.7%
Losers: UnitedHealth -24.3%, Fiserv -8.1%, CVS Health -7.7%, IQVIA -7.1%, Newmont -6.3%, Hershey -6.2%, Humana -6.1%, Akamai Technologies -6%, Market Axess -4.9%
Macroeconomic Data
Interest Rates: Fed Chair Jerome Powell spoke on Thursday, expressing concern about “more frequent, and potentially more persistent, supply shocks” that could challenge the economy and monetary policy. He indicated that April PCE inflation likely fell to 2.2%, though this doesn’t yet reflect potential tariff-driven price increases.
Inflation: The annual inflation rate in the US eased to 2.3% in April 2025, the lowest since February 2021, from 2.4% in March and below forecasts of 2.4%. However, the market isn’t getting too ahead of itself as the data only captures a limited period of tariff related price increases, which are likely to start showing from next month onwards.
Consumer: Retail sales halted to a rise of 0.1% for the month of April as expected. The University of Michigan Consumer survey results showed a worse than expected slump in consumer confidence and a higher-than-expected inflation expectation figure on Friday. The soft data is getting softer, and pundits are wondering when the hard data will start getting softer.
Retail & Consumer Goods
Walmart reported stronger than anticipated comparable sales growth and earnings but withheld next quarters earnings guidance citing uncertainty and saying they may not be able to absorb much of the cost associated with tariff which will ultimately flow to higher prices for consumers. Trump says that Walmart should ‘eat the tariffs.’ The share fell price post announcement, but the stock edged higher over the remainder of the week.
Fast casual food retailer CAVA Group, a popular Mediterranean style fast food restaurant chain, reported a revenue increase of 28.2% year-over-year and a doubling of their EPS of $0.22 for the year. Investors sold off the company’s shares over fears of inflationary pressures, however the CEO remained upbeat. Sandal maker Birkenstock lifted on the back of strong sales and beating earnings expectations for the quarter. The company said they will be rising prices of their footwear in response to tariff pressures. Swiss sneaker maker On Holding AG reported stronger than expected sales and a lower-than-expected fall in earnings. Like Birkenstock, the company can use its market position and brand strength to hike prices in the face of tariff pressures.
Technology, Cybersecurity & Health
Cisco Systems surpassed expectations for revenue growth and earnings for the quarter as well as offering positive guidance for the period ahead, leading to a bump in its share price. CyberArk is anticipated to report a 38% revenue increase, driven by heightened demand for cybersecurity solutions. The company is expected to post an earnings growth rate of approximately 15% year-over-year. Dynatrace saw strong momentum in revenue and earnings exceeded expectations, the company also raised full year guidance citing strong demand for its AI driven application performance monitoring platform. The stock rose modestly considering the bumper result. Monday.com saw an increased adoption of its work operating system across various industries. Q1 FY2025 results exceeded expectations with strong revenue growth and the company raised their full year outlook. Applied Materials supplies equipment, services, and software for semiconductor manufacturing. Q4 FY2024 EPS of $2.32, exceeded expectations; revenue of $7.05 billion, up 4.8% YoY. The company was optimistic on future earnings citing strong semiconductor demand. Doximity the Telehealth provider declined 16% despite earnings beat. They reported Q4 FY2025 EPS of $0.38 on revenue of $138.3 million, beating expectations of $0.27 EPS and $133.7 million revenue. Issued cautious guidance due to macroeconomic and policy uncertainties and investors are worried over their future growth potential.
Media & Entertainment
Fox Corporation is diversifying its revenue streams, projecting $500 million in annual revenue from non-cable ventures such as streaming and digital advertising. Results were in line and the company maintained its full year guidance, resulting in a stable share price. Take-Two Interactive (TTWO) saw fall post earnings as its revenue rose, beating expectations, however its earnings were impacted by a goodwill impairment. Company full year guidance was trimmed as its highly anticipated GTA VI game is facing delays for its release.
Energy & Industrials
NRG Energy (NRG) Q4 FY2024 EPS of $1.56, surpassing the forecast of $1.08; revenue was slightly below Wall Street forecasts, but the company reaffirmed its earnings guidance and the stock surged to be one of the better performers on the S&P 500.
Deere & Co. (DE) experienced volatility post earnings, Q4 FY2024 EPS of $4.55, beating estimates; however, revenue declined 28% YoY to $11.14 billion. The company is remaining cautious due to market challenges.
UK-Based Companies
Compass Group Reported strong H1 FY2025 results with revenue and EPS growth. Raised full-year outlook due to robust demand for its food and catering services, sending the share price climbing.
Experian FY2025 revenue and EPS met expectations; noted growth in North America and EMEA regions and maintained guidance.
Imperial Brands H1 FY2025 profits slightly declined; revenue aligned with expectations. The company maintained growth targets, but also announced the retirement of CEO Stefan Bomhard, seeing a fall in share price, leading to it being the biggest laggard on the FTSE 100.
Burberry FY2025 revenue declined 15% to £2.46 billion; adjusted operating profit fell 88% to £26 million. They did not provide formal guidance, focusing on cost-cutting and brand revitalisation. Investors are optimistic over the company’s turnaround plans.
3i Group dropped after the key Net Asset Value metric of the private equity firm, which reflects the value of its investments, rose over fiscal 2025 but missed analyst expectations.
Sage (SGE) H1 FY2025 results showed revenue and profit growth, exceeding expectations. The company raised full-year outlook due to strong cloud adoption. However, shares fell on slowing North American revenue growth.
National Grid FY2025 results met expectations with stable earnings. Guidance was maintained outlook amidst regulatory challenges. Shares remained largely unchanged post-results.
The Open: Monday 19th May
The FTSE 100 has opened the week 21 points lower and slid further south shortly after open. The German Dax and French CAC both down slightly in early trade. The Japanese Nikkei is down circa 0.7%, the Hang Seng and Shanghai Composite are both up slightly before the Asian close, whilst the ASX 200 closed down 0.58%.
Moody’s has downgraded the United States to Aa1 from Aaa on concerns over tax and spend. Scott Bessent has described the move as a lagging indicator, as the ratings agency has moved some 14 years later than its peers. The credit rating drop has led to a rise in yield for long term US treasuries (bond prices down) as US Government 30 year bonds are now yielding over 5%.
Gold Futures are up, Sterling and the Euro have strengthened against the greenback and American equity markets look like opening lower to start the week. Dow Futures down 350 points and NASDAQ futures down 1.4%.
Week Ahead: 19th to 23rd May 2025
Key things to watch
UK economic data on unemployment and inflation will lead to further clarity from the BoE on the trajectory of further interest rate cuts. UK-EU trade negotiations will be in focus as the government aims to reset relations with Europe and walk the fine political line between pragmatic trade solutions and an ideological battle over principles and sovereignty.
Trade war narratives will bubble in the background, however commentary is now shifting to the US Federal debt levels and widening budget deficits as cost cutting initiatives have proven less than fruitful, the government spend remains high, tariffs are not netting enough revenue and there’s a tax cut bill on its way.
UK Macro
UK Employment Data (Tuesday) – April figures for unemployment rate, wage growth, and job creation will be crucial indicators of the labour market’s health. Current unemployment is near historical lows, but any shift could influence Bank of England policy expectations.
UK Consumer Price Index (CPI) Wednesday – April inflation data will be closely watched after recent months showed gradual progress toward the Bank of England’s 2% target. This release takes on added significance following the OECD’s recent downgrade of UK growth forecasts to 1.4% for 2025.
Producer Price Index (PPI) – Will provide insights into supply chain pressures and potential future consumer inflation.
UK Retail Sales – Friday seesApril figures that will offer a view into consumer spending patterns, a critical component of the UK economy. Analysts will look for signs of resilience despite ongoing cost-of-living pressures.
GfK Consumer Confidence will gauge household sentiment amid changing economic conditions.
Bank of England Commentary – Any statements from MPC members following the economic data releases could provide hints about the future interest rate path.
UK-EU Relations – Ongoing discussions about trade and regulatory alignment post-Brexit continue to be a background factor for UK markets amid global trade turmoil.
Currency Movements – The pound’s performance against major currencies, particularly the US dollar, will influence the FTSE 100’s multinational constituents.
Upcoming Economic Data – U.S.
It will be a relatively quiet week in the US, with attention focused on developments surrounding tariffs, speeches by several Federal Reserve officials, and the release of S&P Global manufacturing and services PMIs, along with data on existing and new home sales.
Upcoming Corporate Earnings:
This upcoming week’s earnings should provide further signals on consumer health, housing trends, global industrial demand, and the outlook for tech and software growth. Importantly, the results of large retailers like Target and Home Depot, along with software companies like Snowflake and Workday, could provide valuable read-throughs to both macroeconomic trends and sector-specific momentum.
UK Companies
Diageo provided a 3rd quarter update this morning. They saw organic net sales rise 5.9% for the period with revenue of £4.38b. The company has also ratcheted down its expectations of tariff impacts.
Utilities: International Distribution Services, which owns Royal Mail and Parcelforce, earns revenue from parcel and mail deliveries. Analysts will be focused on delivery volumes and cost efficiency, especially given ongoing labour and regulatory challenges. Utility company SSE, which generates and distributes electricity, is influenced by wholesale energy prices and regulatory decisions. Expectations are centred on its renewable energy investments and how recent energy price volatility has impacted performance. Similarly, Severn Trent, a regulated water utility, will be watched for its capital expenditure plans and regulatory compliance.
Consumer: In consumer-facing sectors, Marks & Spencer (M&S), has suffered a highly publicised cyberattack, and analysts will be scrutinising the impact on its sales and recovery plans. Detail has thus far been scant, and shelves are still bare. M&S shares are down significantly as a result and the market will be keen to see any update. JD Sports, depends on brand partnerships and international expansion, with focus on like-for-like sales and inventory levels. In telecoms, Vodafone’s results will reflect subscriber trends and pricing power, while BT’s focus will be on cost cutting and the possible sale of its stake in TNT Sports to raise cash.
In financial services, Intermediate Capital Group, an alternative asset manager offering private debt and equity investments. Analysts will watch fund performance and fee income growth. Investec is influenced by interest income and market activity in banking and wealth management. Key metrics will include net interest margins and wealth inflows.
Industrials: Diploma, a distributor of technical products and services, will be assessed on organic growth and its ability to integrate recent acquisitions. Meanwhile, Tate & Lyle, which produces food ingredients, faces margin pressure from input costs, with attention on product innovation and global demand. Lastly, with defence technology company, QinetiQ, investors will look at the contract pipeline and its international expansion efforts.
US Companies
Consumer: Turning to the U.S., the retail and home improvement sector is in focus. Home Depot and Lowe’s generate revenue from DIY and professional contractor sales, with earnings influenced by housing market activity. Analysts will scrutinise same-store sales and contractor demand. Williams Sonoma, which sells home furnishings, will be evaluated on e-commerce performance and the housing market. Big box retailer Target will be monitored for traffic trends and promotional activity as tariffs and inflation affect discretionary spending. Off-price retailers like TJX, Ross, and Burlington benefit from value-seeking consumers; analysts will look at inventory management and sales per square foot. Dollar Tree faces scrutiny on margin trends and its dual-format store strategy. Best Buy depends on consumer electronics demand and product cycles, with expectations focused on category growth and service revenues. Apparel and footwear companies reporting include Deckers Outdoor and Polo Ralph Lauren. Analysts will focus on direct-to-consumer growth, regional performance, and inventory levels. Finally, cruise line newcomer Viking Holdings may provide further insights into consumer travel demand following on from positive results from its competitors. The stock has rallied strongly of late in line with its peers.
In technology and cloud software, Palo Alto Networks provides cybersecurity products and services, with analysts looking for subscription growth and customer expansion. Snowflake, a cloud-based data warehousing platform, is usage-based, and investors will track enterprise adoption and revenue retention. Zoom Communications, known for video conferencing, is expected to report on enterprise customer retention and new product and AI feature adoption amid post-pandemic normalisation. Wix, a web development platform, will be assessed on ARPU and premium subscriber growth. Intuit, which offers financial software like TurboTax and QuickBooks, will be analysed for small business service growth and monetisation of its large user base. Workday, which sells enterprise HR and financial software, will be judged on large enterprise adoption and renewals. Autodesk, a provider of engineering and computer aided design software, will be examined for growth in cloud subscriptions and international markets.
In healthcare, Medtronic, a global medical device company, is affected by procedure volumes and product innovation. Investors will be looking for updates on new product rollouts and performance in emerging markets.
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