The FTSE 100 experienced volatility on Tuesday, ultimately closing down by 0.29%. This decline followed investor reactions to media reports suggesting a gradual increase in U.S. trade tariffs, projected to rise between 2% to 5% on a monthly basis. The incoming economic team for U.S. President-elect Donald Trump is touted to gain negotiating leverage while simultaneously keeping inflation in check, according to Bloomberg News, which relied on sources familiar with the developments.
Nonetheless, it was noted that this proposal is still in its nascent stages and has not yet been presented to Trump. Market participants remain cautious as expectations for U.S. rate cuts are tempered. "The persistent strength in the labor market and the broader economy continues to negate expectations for any further rate relief.
The market has now adjusted its outlook, pushing the anticipated next round of cuts to mid-year, suggesting a likely pause in January 29’s upcoming meeting," elaborated analysts from Stifel. In a significant development for the UK, a partnership in minerals cooperation with Saudi Arabia is in the works.
This collaboration aims to enhance the supply of critical minerals such as copper, lithium, and nickel within the UK. Industry Minister Sarah Jones is set to visit Saudi Arabia, accompanied by 16 British critical minerals companies, including Beowulf Mining and Cornish Lithium. The strategic initiative is expected to open doors for UK businesses, as reported by the government. In corporate highlights, Persimmon, identified by the ticker symbol ($PSN.GB), announced an increase in new home completions for 2024.
This positive news propelled its shares upward, resulting in a 5.54% gain amid the blue-chip index. The British housebuilding company reported 10,664 homes constructed at an average selling price of £268,500, an increase from 9,922 homes sold at an average price of £255,752 a year earlier. Conversely, JD Sports Fashion (JD.L) saw its stock plummet by 6.81% after revising its profit guidance downward.
The company now anticipates a profit before tax and adjusting items ranging between £915 million and £935 million, a step back from its previous guidance of £955 million to £1.04 billion. This has raised concerns amongst investors regarding the brand’s growth trajectory amid competitive pressures in the sports retail environment. Overall, these developments on the financial markets highlight key adjustments in investor sentiments driven by U.S.
economic forecasts and the evolving landscape of UK trade relations amidst a backdrop of fluctuating stock performances..