FTSE 100 flat points at 8,822 Shell trims production guidance Donald Trump to send tariff letters to countries today 3.13pm: Oil prices rising
Oil prices are rising, with Brent crude spiking above $69 a barrel in the past few minutes, up 1% today and well above the $66 seen a week ago.
This is despite crude producers cartel Opec announcing that its restrictions are all but over.
There have been reports from Dubai that Houthi rebels have claimed an attack on a ship in the Red Sea.
The bulk carrier Magic Seas, a ship registered in Greece, is now sinking in the Red Sea, following what was reported to be an attack by drones.
However, the attack was first reported several hours ago, so it is not clear that this is what oil traders are concerned about.
2.52pm: US stocks open lower, led by Tesla
Wall Street has come back with a sore head after the long weekend, with the Dow Jones down 0.2%, the S&P 500 falling 0.3%, the Nasdaq dropping 0.45% and the Russell 2000 sinking 0.9%.
Tesla, down 7.4%, is leading the S&P decline, with most of the top 10 largest stocks in the red or flat at best.
In London, the FTSE 100 is back to flat, meanwhile.
In currency markets, the US dollar is up generally, with the DXY dollar index back up over 97 points, while down slightly against the pound but up versus the euro.
1.58pm: Greggs weather scepticism
After Greggs PLC (LSE:GRG) profit warning last week, Barclays worries if there was more than just the weather to blame.
Following the weaker-than-expected trading revealed in the unscheduled update, the bank’s analysts have lowered their 2025 and 2026 earnings forecasts by around 11% and 10% respectively, citing slower like-for-like sales growth, margin pressure, and increased finance costs.
Discussions with the company indicate that hot weather was the single largest reason for the downgrade, which some investors have questioned, as not all parts of the UK experienced a heatwave.
“Our analysis of previous Greggs trading updates during hot weather suggests that the heat wave is a credible explanation of weaker trading, but we believe that as the business sells more cold drinks vs much earlier in its history, the impact of warm weather has become less severe.”
However, Barclays has kept its ‘overweight’ stance, though analysts conceded their rating has been “far too optimistic”, highlighteing Greggs’ vertically integrated model, strong returns on capital in new locations, and long-term positioning as supportive of value for money.
1.04pm: Future enters bond market
Future PLC (LSE:FUTR) has issued its first bond, and this has been noted by analyst Johnathan Barrett at Panmure Liberum to flag his liking of the “extremely cheap” stock.
The online publisher has issued £300 million of five-year unsecured notes at a 6.75% coupon, alongside a new £300 million, four-year revolving credit facility. The facilities replace existing arrangements totalling £650 million.
Analysts at Panmure Gordon said the new financing structure would not impact FY25 earnings per share but would reduce FY26 and FY27 EPS by 3.3% and 7.1% respectively due to a higher gross debt balance.
The broker expects the company could announce further share buybacks, which would boost earnings accretion.
12.49pm: US set for sluggish start with Tesla on the brakes
US stock futures have come off their worst, but the tech-dominated Nasdaq and S&P 500 are both still expected to decline as Wall Street opens after the long weekend.
Dow Jones futures are just below flat, while those for the S&P 500 and Nasdaq 100 are down 0.3% and 0.4% respectively.
Another big fall for Tesla is going to weigh on the latter two indices, with the stock down over 6% as investors fret about the beef between Elon Musk and Donald Trump.
12.10pm: Currys too hot for RBC
Currys PLC (LSE:CURY) is the biggest faller on the FTSE 350 this afternoon, down 6% after an RBC Capital Markets downgrade.
London analysts for the Canadian bank lowered the stock to ‘sector perform’ as they felt the recent rerating has left limited scope for further multiple expansion, also making comments on the discretionary nature of its product range and low operating margins.
RBC suggests that investors seeking valuation upside might consider peers such as B&M European Value Retail instead.
11.52am: European equities a little more optimistic
European equities have turned a little more optimistic as the morning comes to an end, with Germany’s DAX up 0.6% and the FTSE managing to hold in positive territory for the past half hour.
Today has seen a range of better-than-expected economic metrics out of Europe, points out market analyst Joshua Mahony at Rostro.
This was kicked off with an improved German industrial production figure, rising to 1.2% to counteract last month’s concerning contraction, before the surge in the Eurozone investor confidence survey.
“Coming off the back of over three-years of pessimism for eurozone investors, today’s reading of 4.5 represents the first convincing sign of optimism for a long time,” Mahony says.
“Part of this optimism will come as a result of the promise of expansive spending policies in Europe, while the global diversification away from US assets has also provided a boost for stocks in the region.”
Traders are otherwise weighing up the implications of a possible delay to US tariffs and the new threat of a 10% extra BRICS tax.
“The obvious benefits of holding off rather than implementing a swathe of tariffs also have a likely unintended consequence of writing off a July rate cut from the Fed,” says Mahony.
“While Trump can point towards the inflation levels and claim that his policies are not inflationary by nature, the FOMC will want to judge based on the stable and long-term policies rather than simply a lull before the higher tariffs come into effect.
“Thus, if Trump wants rate cuts, he arguably needs to either implement or call off the remaining tariffs, allowing the Fed with a period of months to see that prices do not surge once the final rates are in place.”
11.20am: Crypto ETF demand remains strong
Flows into crypto ETFs have increased in recent months, with global Bitcoin ETP holdings reaching $158.62 billion and flows into Ethereumm ETPs also flying, according to data from Morningstar.
This has been driven by both macroeconomic and political tailwinds, says research director Monika Calay.
“The pro-crypto stance of the Trump administration, marked by the launch of the strategic bitcoin reserve, and a broader push to make the US the ‘crypto capital of the world,’ has boosted investor confidence.
“At the same time, expectations of future Fed rate cuts and a weakening US dollar are pushing capital toward Bitcoin as a hedge against currency devaluation and inflation.
“In an environment where stocks and bonds have become increasingly correlated, cryptocurrency stands out as a diversifier. Bitcoin and other major crypto assets have historically shown low correlation, often below 0.4, with traditional asset classes like equities, fixed income, real estate, and even gold. That makes it an appealing addition to portfolios seeking uncorrelated returns.”
Bitcoin hit an all-time high above $112K in May and is currently at $108.8K.
10.24am: HSBC to sell Aussie retail banking arm?
Analysts at UBS have flagged that HSBC Holdings PLC (LSE:HSBA) is believed to be days from releasing documents for the sale of its local retail business, per Australian newspaper reports.
The bank will retain the more internationally connected corporate and commercial segment of the Aussie business.
HSBC has not yet commented on the media report, which follows up on a Bloomberg piece in January which claimed a strategic review was underway.
If the group applies its strategy under CEO Georges Elhedery of delivering retail and commercial banking in two home markets – Hong Kong and UK - and confining its focus to internationally connected corporate and retail and wealth customers in the rest of the footprint, the UBS analysts said the Australian retail business sale looks plausible.
ING was suggested as a potential buyer.
10.12am: Some macro data
The Sentix investor sentiment index in the Eurozone jumped to 4.5 in July from 0.2 in June, well above the consensus forecast of 1.1.
There was a third increase in a row for the economic sentiment index, with the upswing gaining breadth and at its highest level since February 2022.
Views about the current situation are picking up in particular, Sentix said, with a positive reading of 5.8 points also the third increase in a row.
European retail sales were down 0.7% month-on-month, coinciding with a -0.3% decline in overall services activity in April.
And there’s also UK retail footfall data from MRI, showing a steady increase across all UK retail destinations last week, driven by improved weather, seasonal demand and summer events.
Year-on-year comparisons saw notable increases in the West Midlands, Wales, and Greater London – likely boosted by events like Wimbledon and Oasis’ world tour kicking off in Cardiff.
9.50am: Small cap fallers Outside the FTSE 100, there’s a few stocks on the move.
Shares in James Cropper plc (AIM:CRPR) are down 5% after the paper and materials group said a major customer had abruptly stopped buying part of its coloured paper range.
The decision follows a sharp decline, around 50%, in sales to the merchant customer during the first quarter of the financial year.
However, it also noted that trading in the unit was ahead of expectations in the early months of the new financial year, thanks to gains with other clients and cost-cutting measures.
Eneraqua Technologies PLC (AIM:ETP) dropped even further, 34%, after the company flagged cashflow pressures caused by delayed client payments and postponed energy projects, despite confirming that full-year results will be in line with expectations.
The group expects to report revenue of £63 million and adjusted profit before tax in line with market forecasts.
It pointed to a key £7 million contract in its water division, involving the installation of its Control Flow HL2024 technology to generate nutrient credits, with payments linked to upcoming housing developments.
9.07am: European markets ‘not 100% clear on tariffs’
The FTSE 100 remains in the red after the first hour of trading of the week, with oil heavyweights Shell and BP leading the fallers.
Commodities trader Glencore, retailer JD Sports and precious metals miners Fresnillo are next, with utilities, miners and defence contractors also in the mix.
At the other end, mining and energy engineer Weir Group, and Asia-focused lender Standard Chartered are top of the leaderboard, up 1.4%.
Weir has been lifted by an upgrade from Citi over its exposure to mining.
Others in green include aerospace supplier Melrose, housebuilder Berkeley and airlines IAG and easyJet.
“Trade tensions are back in focus this week with the usual clamour,” summarises market analyst Neil Wilson at Saxo, saying the July 9 deadline effectively being extended to August 1 is good news, but on the other hand Trump’s new BRICS threat “has helped push stocks down in the overnight Asian session”.
Around Europe, the FTSE is the only major index in red due to Shell, but others are just above flat and Germany’s DAX is up 0.3%. US futures are weaker as traders return following the 4th of July holiday and last week’s record highs.
On Trump’s tariff letters, where he is telling countries that have not yet signed a US trade agreement what their tariff will be from August 1, Wilson says while the President has mentioned a tariff rate of between 10% and 70%, “the market assumes that if 70% is announced Trump will back down” and it is “not 100% clear whether July 9th is still the official deadline for a deal”.
“The fact that August 1st is being mentioned suggests they are buying themselves a little more leeway to get countries to agree deals without officially ‘chickening out’. This is classic Trump mix of confusion and 4D chess,” says Wilson.
8.55am: Music rights fund comeback
Former Guns N’ Roses manager Merck Mercuriadis is launching a remixed version of his Hipgnosis music rights fund as investors return to the sector following a bruising correction.
Mercuriades, who also managed Elton John, Morrissey, Iron Maiden and Beyoncé, and was the former chief executive of the Sanctuary Group record label, told the Financial Times that his new business would give artists and managers majority ownership, shifting power from record labels.
Mercuriadis, whose Hipgnosis was bought by Blackstone last year, says his new company has secured investor backing in the “hundreds of millions” and is eyeing its first deals.
8.42am: Tesla investors don’t like Musk’s political moves
Tesla Inc (NASDAQ:TSLA) shares have slid 4.1% in premarket trading on Monday, wiping nearly $54 billion from the company’s market value, as investors reacted to Elon Musk’s announcement of a new US political party.
The proposed ‘America Party’ deepens Musk’s shift into partisan politics and has raised questions about his focus on Tesla.
Dan Ives, a tech analyst at Wedbush and long-time Tesla bull, described Musk as the company’s “biggest asset” and warned that his political activity could drag on the carmaker’s valuation.
He added that the board may need to intervene if Musk pushes ahead.
8.15am: FTSE 100 dragged lower by Shell and BP
The FTSE 100 has slipped 10 points to 8,813 at the open, dragged lower by Shell and BP.
Oil prices are under a little pressure from OPEC agreeing to increase production at their weekend meeting, though Brent crude is only down 0.3% at just over $68 a barrel.
Shell shares are down 2.5% after it lowered second-quarter guidance. BP is down 1.6%.
7.52am: US tariffs update
Following the BRICS summit at the weekend, Donald Trump said that “any country aligning themselves with the anti-American policies of BRICS, will be charged an ADDITIONAL 10% tariff”.
Here is what else we know about US tariffs at the moment.
Ahead of President Trump’s 9 July deadline, when his 90-day pause on global tariffs runs out, later today he will sign and send letters to between 12 and 15 countries to set out new tariffs.
The letters will be sent at noon, Washington time, today.
Treasury Secretary Scott Bessent said that tariffs will start from 1 August. Although it was not entirely clear whether or not this is for all countries still to agree deals, or not.
The European Union is willing to accept a 10% universal tariff if exemptions for areas such as autos (25%) and steel and aluminum (50%) are provided, Bloomberg is reporting.
Talks with Japan do not seem to be progressing, with Trump saying last week threatening “30%, 35%, or whatever the number is that we determine, because we also have a very big trade deficit with Japan”.
A deal with India, according to Bessent, is “very close”.
7.23am: Shell cuts production guidance
Shell PLC (LSE:SHEL, NYSE:SHEL) expects lower oil production in the second quarter due to scheduled maintenance and the sale of its onshore oil and gas joint venture in Nigeria.
Ahead of its second quarter results on July 31, the FTSE 100 oil giant said upstream production is likely to drop to between 1.66 million and 1.76 million barrels of oil equivalent per day, down from 1.86 million in the first quarter.
Also, lower contributions are expected from trading and optimisation across multiple segments, while integrated gas production is expected to range between 900,000 and 940,000 barrels of oil equivalent per day, versus 927,000 in the first quarter, and LNG liquefaction volumes are forecast between 6.4 million and 6.8 million tonnes, versus 6.6 million in Q1.
7.16am: FTSE 100 called lower as tariff deadline nears
The FTSE 100 has been called lower at the start of the week, with US tariffs and oil prices at the forefront of attention for financial markets.
A decline of 19 points is expected for the London index on the futures market, after 24 points were added across the whole of last week, wrapped up with a flat finish at 8,822.91.
Asian stocks are mixed this morning, with Japan’s Nikkei and Hong Kong’s Hang Seng down 0.6% and 0.2% while other markets are flat, as mixed messages emerge from Washington on tariffs.
After the BRICS meeting took place over the weekend, Donald Trump threatened to slap an additional 10% tariff on countries that choose to align with them.
Although President Trump’s deadline to agree tariff deals is this Wednesday, his Treasury Secretary Scott Bessent said some countries will receive a three-week extension as tariffs will not begin until 1 August.
Back in domestic news, UK house prices were flat in June, following a small drop the month before, according to the new Halifax house price index.
The annual rate of house price inflation softened to 2.5% from 2.6%.
Monday 7 July Announcements expected:
Interims: Vanquis Banking Group
Economic announcements: Halifax House Price Index (UK), Industrial Production (GER), Retail Sales (EU), Consumer Credit (US)
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