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Written by: Susannah Streeter | Hargreaves Lansdow
- Tariff threats continue to hang over financial markets, with duties looming on imports from Mexico and Canada.
- Copper prices surge, helping lift the FTSE 100, as the metal is caught in Trump’s sights.
- Brent Crude falls to two-month lows amid concerns about the US economy.
- Trump’s crypto bump reverses amid a collision of concern about the industry, with Bitcoin trading below $89,000.
- S&P 500 set to take a breather as investors wait for Nvidia’s results.
- BP is set to unveil a strategic reset at its capital markets day, with a refocus on oil and gas.
- Corona sales crown AB InBev results, which beat expectations.
- Heathrow posts record passenger numbers and 31% surge in profits.
The threat of more potential tariffs from Trump is moving markets as investors assess the knock-on effect on goods across the global economy. Not only has the President re-committed to introducing 25% tariffs on imports from Canda and Mexico but he’s been scouting for other targets. Copper prices have shot up, as the metal is caught in the President’s sights. Mining stocks have helped drive the FTSE 100 higher in early trade after copper futures jumped around 4%, sparked by the President ordering an investigation into extra duties on imports. The plan would be to spark higher US production and put a dent in China’s huge share of the global market. Copper is sought after as a key component in renewable energy systems, for wind, solar power and electric vehicles for example, and prices have been steadily rising this year, after dipping back at the end of 2024. This surge is in expectation that orders will pile up with US manufacturers expected to build up stocks ahead of any tariffs being brought in. However, it could be just a short-term boost; if tariffs lead, as expected, to increased consumer prices and higher-for-longer interest rates, there is likely to be a knock-on effect on growth and orders across a range of industries, which could lead to lower metal demand for metals and a drop in prices.
Concern about the implications of Trump’s trade policies for the mighty US economy is showing up in the oil price trajectory. Brent Crude is trading below $74 a barrel, the lowest level in two months as traders assess trickier times ahead for the world’s largest economy, and expectations that there will be lower demand for energy as a result. US consumer confidence has dropped back to the lowest level since mid-pandemic as concerns rise about inflation. The characteristic resilience that has been the hallmark of the American consumer even during the cost-of-living crisis appears to have taken a battering.
There’s little relief in sight in the crypto world which was shaken by sharp falls in valuations in a matter of hours. Crypto’s ‘Trump bump’ has reversed, with digital currencies dropping sharply, back to levels not seen since November. Bitcoin, which has sucked in huge sums of speculative money fell 8% on Tuesday, amid a collision of concerns. It gained back a little ground as some speculators were drawn back in, but it’s still down almost 17% in just a month. Crypto mirrors broader investor sentiment, which has taken a hit due to Trump’s renewed vows to impose 25% tariffs on neighbours Mexico and Canada. The absence of more regulatory support from the new administration has also been greeted with deep disappointment. Trump hasn’t yet come good on promises to make the US the crypto capital of the world, by setting up a Bitcoin strategic reserve for example. While the President and the First Lady cashed in on inauguration euphoria by launching their own meme coins, which rose and then fell back to earth in spectacular ‘pump and dump’ fashion, broader support for the industry has been lacking. Speculators have also been spooked by the mega theft of $1.19 billion crypto assets from a wallet held on the Dubai-based Bybit exchange. While sharp falls in digital coins and tokens aren’t unusual, the losses this week have been painful, and it’s a reminder of the ‘wild west’ nature of the crypto industry.
The S&P 500 is expected to take a little pause for breath, after the slides of recent sessions as investors wait for Nvidia’s results, which are set to be a key driver of sentiment. Given the AI euphoria, which has swamped markets and led to the chip giant’s heady valuation, there is a keen interest in whether the seemingly insatiable demand for its products is going to continue. The arrival of low-cost Chinese model DeepSeek rattled investors but, given Nvidia’s first mover advantage and the huge infrastructure investment plans from tech giants like Meta, it’s an indication that Nvidia’s high-end chips will remain in demand. However, investors have come to expect a lot from Nvidia given its previous record beating results so it could still be a volatile ride ahead especially if Nvidia’s misses forecasts of 72% revenue growth.
BP is set for a strategic reset, and it looks highly likely that there will be a sharp refocus on the core oil & gas business to help put BP on a firmer financial footing given that it’s the core driver of profits, and so increased investment in selective hydrocarbon projects and optimising existing production could well be on the cards. CEO Murray Auchincloss appears to have hinted at this, stressing that the reset will ‘drive further improvements in performance, all in service of growing cash flow and returns. Although there is unlikely to be a complete reversal of the integrated energy company strategy, which aimed to balance oil and gas activities with significant investments in low-carbon technologies, it’s likely there will be some rolling back of investments in green energy. In areas like offshore wind, BP’s already taken a less direct approach by moving the assets into a joint venture thereby sharing the investment burden. It wouldn’t be surprising to see similar moves in the solar and biofuels space, or even a full disposal. Refocusing on the core growth drivers is likely to lift investor sentiment, particularly given that so far, the company’s ambitious efforts to move towards renewables have been met with limited success. But the challenge will continue to be balancing profitability with sustainability efforts in the evolving energy landscape. Questions have been raised about the potential for change at the top of BP. Given that Murray Auchincloss was appointed as BP chief executive officer permanently a year ago, a change at the top at this time would be more unsettling than reassuring, but if the strategy underwhelms, there may be calls for a shake-up. The tenure of Helge Lund as chair may be more likely to come to an end sooner, given that he’s been in the seat since 2019, through a volatile and disappointing journey for BP. It might be seen as the symbol of the change of direction for BP, without the upheaval of losing another CEO.
Drinkers are indulging in bubbles of light relief amid the gloom descending about the prospects for the world economy. Indulging in favourite brews has helped the beer giant Anheuser-Busch InBev beat quarterly-profit expectations. Organic operating profit rose 10.1%, smashing analyst forecasts of 7.7%. Corona sales crowned company results, helping deliver record revenues. The label may be more expensive, but a combination of taste and branding has been a winning formula for the company. AB InBev has managed to pour out impressive results despite a sharp drop in volumes in China and weakness in Argentina. Although this shows that demand in other markets is still pumping, and costs are being kept under control, there will be concerns about future growth if the slowdown in China takes hold.
Sunseekers paying for a spot on the sun lounger and globetrotters eager to see more of the world have led to record numbers of air passengers using Heathrow. 84 million people used the airport last year, traveling to far corners of the world. What appeared to be post-pandemic pent-up demand has unfurled into new patterns of steady growth as people ring-fence available budgets to spend on experiences instead of buying more stuff. This growing trend for travel has led to a 3% jump in annual profits for Heathrow and has led the airport to call on the government to make policy changes to ensure plans for a third runway can proceed to capitalise on growth prospects.