30/05/2024

Equities

The FTSE 100 continued its downward trend, falling 0.9% to mark its sixth consecutive session of losses, the longest losing streak since August 2023. This decline was influenced partly by Anglo American's shares, which dropped 3.0% after BHP Group retracted a £49 billion takeover offer. This news followed Anglo American's refusal of BHP's request for more time to negotiate, citing the proposal's complexity.

Ocado's shares fell sharply by 12.3%, landing at the bottom of the FTSE 100. This was amid indications from index provider LSEG that it might be demoted to the mid-cap FTSE 250 index.

The mid-cap FTSE 250 also experienced a decline, dropping 1.3% and marking its worst performance in over a month. Notably, International Distributions Services saw its shares rise by 4.3% after agreeing to a £3.57 billion takeover by Czech billionaire Daniel Kretinsky.

Across the Atlantic, the US stock markets also faced a challenging day, with the Dow Jones Industrial Average closing down 1.06%, the S&P 500 losing 0.74%, and the Nasdaq Composite dropping 0.58%.

Salesforce's shares plummeted over 15% in after-hours trading following a quarterly earnings report that fell short of revenue expectations. Marathon Oil's shares surged 8.4% after the announcement of its acquisition by ConocoPhillips in an all-stock deal valued slightly over its $15 billion market capitalisation, although ConocoPhillips' shares declined by 3.1%.

The airline industry also saw notable activity, with American Airlines' shares dropping 13.5% after the company cut its profit forecast for the second quarter. Dick's Sporting Goods and Abercrombie & Fitch reported positive movements, with their shares jumping 15.9% and 24.3%, respectively, following raised forecasts for annual sales and profits.

Forex & Commodities

The US dollar has recently climbed to a two-week high against the euro and sterling, spurred by rising US Treasury yields and increased demand for safe-haven assets. This surge in the dollar's value comes as Treasury yields have jumped significantly, following unexpectedly strong economic data and a series of poor debt auctions that have rattled the markets. As a result, the dollar index, which measures the currency against a basket of six major peers, reached 105.17, its highest since May 14.

Sterling has weakened against the dollar, falling to $1.2696 from a recent peak of $1.2801. This decline in sterling's value aligns with broader market trends where higher US yields have bolstered the dollar's appeal.

Turning to commodities, oil prices have seen a slight decrease due to concerns over weak US gasoline demand. Brent crude was trading at $83.45 per barrel, a modest drop, while US West Texas Intermediate crude adjusted to $79.10 per barrel. Similarly, gold prices have softened, with spot gold trading at $2,333.28 an ounce, reflecting a 0.24% decrease.