- FTSE 100 gains 51 points to 10,223
- Gold, silver and copper retreat from recent highs
- US stocks open lower
4.42pm: Record territory
The FTSE 100 closed just shy of its all-time record, up 51 points at 10,223. As the US dollar recovered, investors pulled back from precious metals, resulting in a 6% drop in gold and 16% decline in silver prices.
“A recovering US dollar provoked profit taking ahead of the weekend with gold and silver prices falling sharply, halting the swift advance,” IG chief technical analyst Axel Rudolph said.
“Even though the US dollar regained some of its sharp losses towards the latter part of the week, the dollar fell by around 2% in the first month of the year, its worst performance since June.”
4.01pm: Markets jittery as Fed chair pick mulled
The FTSE 100 is remaining fairly robust, up 0.3%, while the mid-cap FTSE 250 is flatter.
Banks are top of the leaderboard in London, with Lloyds pushing on to new 18-year highs at the top. NatWest and Barclays too.
Those with sizeable exposure to the US and the dollar are doing well too, with Diageo, IAG, Smith & Nephew, Experian and Haleon doing well.
Retailers and consumer goods companies too, with Sainsbury's, Kingfisher, Unilever, and Reckitt.
Gold is down 6.5% at $5,030/oz, silver down almost 16% at $97.65/oz and copper is also down. Hence fallers are led by Endeavour Mining and Fresnillo, with Antofagasta, Anglo American and Glencore in the top 10.
Globally, Donald Trump’s nomination of Kevin Warsh as the next Fed chair has triggered sharp moves across markets, with gold and silver tumbling and the dollar rising.
“The knee-jerk market reaction has been hawkish,” said XTB’s Kathleen Brooks. “Gold and silver have slumped; Treasury yields are slightly higher and the dollar is the top performer in the G10 FX space.”
The DXY dollar index is up 0.5% to 96.8, while the pound and euro are both down 0.6%, to $1.3721 and $1.3721 respectively.
Brooks noted Warsh’s past hawkish stance but said “he has changed his stance in recent months and has become a lot more dovish, which is probably why Trump picked him.”
As others have said (see Sam Tombs at 12.39pm), she warned the confirmation process may not be smooth: “It will not be easy for Warsh to get confirmation from Congress,” adding that ongoing uncertainty could mean “the dollar debasement trade could take a pause.”
The main US stock indices are down around 0.35-0.45%.
3.23pm: Jobs idea from FTSE boss
Here's an idea from FDM Group (LSE:FDM) boss to kill various birds with one policy stone: get jobless grads to retrain as teachers or nurses.
Rod Flavell, chief executive of the tech consultancy, suggested to the Telegraph that unemployed graduates should be retrained for public sector roles such as teaching or nursing.
With over 700,000 graduates claiming benefits and the UK facing staffing shortages, he said job centres should actively guide degree-holders toward vocational careers.
“You should be telling them: ‘Have you considered a career as a teacher?’” he said. Flavell criticised reliance on costly agency staff in the NHS and urged greater use of apprenticeships to close the skills gap.
FDM shares, in case anyone was wondering, are down 84% over the past five years.
3pm: Apple and Meta lead US decline
US stocks have started in the red, led by big tech.
The Nasdaq is leading the decline, down 0.5%, while the Dow Jones has dropped 0.4% and the S&P 500 0.3%.
Microsoft was just below flat, settling after its worst fall since the pandemic the day before, but Apple is down 1.9% despite its earnings overnight beating forecasts.
Meta, Alphabet and Amazon were also in the red.
Top riser on the S&P was SanDisk after the data storage maker's quarterly results crushed expectations and issued a forecast far above Wall Street estimates.
2.42pm: Musk merger
SpaceX is reportedly considering strategic options, including a potential merger with Elon Musk’s artificial intelligence startup xAI, as it prepares for an initial public offering (IPO) expected later this year.
A Bloomberg report has suggested that discussions are preliminary at the moment, with no agreements finalized.
Under one potential scenario, xAI shares could be exchanged for SpaceX stock prior to the IPO, which is anticipated by mid-2026 and could value the rocket maker at more than $1 trillion.
Some investors have also pushed for a possible merger between SpaceX and Tesla.
Musk appeared to acknowledge the xAI merger reports in a brief reply on X, responding “Yeah” to a post describing SpaceX as a future “Dyson Swarm company,” a concept referring to a large network of orbiting structures designed to harness energy.
1.53pm: Important US session
Today's US session could be a very important one, several analysts are saying.
Futures are currently pointing to declines for the main indices, with the S&P 500 and Dow Jones both anticipated to start 0.5% lower, while Nasdaq futures are down 0.7%.
This follows yesterday's turbulent session, when the S&P hit an intra-day low of 6,870, down 1.5%, before dip-buyers rushed back in and left the benchmark with a loss of just 0.1% on the day, while the Dow and Russell 2000 both eked out a gain of 0.1%.
The tech-heavy Nasdaq, while trimming losses that peaked at around 2.5%, was unable to recoup all losses, ending the session down 0.7% as Microsoft tanked almost 10%, its worst one-day decline since March 2020.
"Investors were spooked by numbers which suggested uncertain returns from the company’s heavy investment in AI," says market analyst David Morrison at Trade Nation, with the company flagging slower Azure cloud growth and softer operating margin guidance.
Apple earnings after the close provided some better news, as earnings and revenues both easily surpassed expectations.
After an initial afterhours jump, the stock price is down 0.1% now.
President Trump's nomination of Kevin Warsh saw a positive initial stock market reaction, says Morrison, "although the dollar didn’t like the news especially".
"Overall, it looks like a good choice that most can get behind. Mr Warsh has promised to bring transparency to the US central bank and is likely to make some fundamental changes.
"At the same time, he doesn’t sound like a pushover. So, the President may not get all the rate cuts for which he’s so desperate."
Political uncertainty is still lingering after the Senate failed to pass a procedural vote on government funding, raising the risk of a shutdown.
"Together, these factors appear to be tempering risk appetite after a strong start to the year," says Morrison.
"This could be an extremely important session as we head towards the weekend."
12.39pm: Markets on the rise
Markets in Europe have been enjoying a second wind in the past hour.
The top risers in London are Experian, Smith & Nephew, Lloyds Banking, Diageo and IAG.
On the Trump nomination, economist Sam Tombs at Pantheon Macroeconomics says he "would advise against drawing strong conclusions about the economic and market implications of a Kevin Warsh chairmanship of the Fed".
For a start, he says, Warsh must now must maintain the confidence of both markets and the President as he goes through the Senate Banking Committee hearing.
"He then must pass a confirmation vote in the Senate with a simple majority. The Republicans hold the Senate 53-to-47, but a few GOP Senators have indicated they will withhold their support for the President’s pick if the Department of Justice’s legal probe into Chair Powell is ongoing."
When Trump appointed Jerome Powell in his first term, there were 82 days between the nomination and the Senate’s confirmation vote, which leaves "plenty of time for snafus", says Tombs.
Also, Warsh’s appointment "might not shift the balance of voters on the FOMC towards lower interest rates".
It is also not certain how Warsh will vote, he adds, though it is "reasonable to assume that he told the President he favors reducing interest rates today, otherwise he would not have been nominated".
While Warsh has argued publicly that AI and the Trump administration’s deregulation agenda meant the FOMC has room to ease policy, he also has advocated loosening financial regulations in order to make regional banks more competitive.
But his hawkish instincts "might return once he has secured the Chairmanship", with analysis of his comments in FOMC meetings during the financial crisis and his criticism of monetary stimulus during the Covid pandemic "imply that he is more likely to prioritize hitting the 2% inflation target than ensuring maximum employment in times of crisis".
12pm: Trump picks Warsh
Donald Trump has indeed named former Fed Governor Kevin Warsh as his pick to be the next chairman of the US central bank.
Trump said in a post that he was nominating Warsh and has known the economist "for a long period of time, and have no doubt that he will go down as one of the GREAT Fed Chairmen, maybe the best".
"On top of everything else, he is 'central casting' and he will never let you down."
10.25am: Relief in DC, reality in Big Tech
It is shaping up to be a turbulent Friday for US markets as investors juggle a heavy cocktail of political drama and corporate earnings. Stock futures are flashing red across the board, with the Nasdaq leading the retreat, down 1.1%, following a rocky week for Big Tech. While Apple managed a pre-market boost thanks to record iPhone sales, Microsoft’s sluggish cloud growth is still weighing heavily on investor sentiment.
The real headline, however, is the "Warsh Effect." Reports that President Trump is set to nominate former Governor Kevin Warsh as the next Fed Chair have sent futures sliding while the dollar finds its footing.
Meanwhile, the risk of a US government shutdown has effectively vanished just 48 hours before the deadline. Senate Democratic Leader Chuck Schumer confirmed that a bipartisan agreement has been reached with Republicans to secure federal funding.
"Although US futures are lower today, averting another shutdown should be good for risk sentiment, and it is a massive relief for consumer and business confidence as we move through Q1," commented Kathleen Brooks, research director at XTB. "With less political chaos on the cards, this could remove one headwind for financial markets, which have generally had a good start to the year."
Looking past the tech slump, the focus shifts to energy giants Exxon and Chevron for a pulse check on the oil industry.
9.50am: Warsh the next Fed Chair?
The Footsie is holding its ground, now up 13 points at 10,184.59
US stock futures, however, are down while the dollar has found its footing following reports that President Donald Trump is set to nominate Kevin Warsh as the next Federal Reserve Chair.
Warsh "was quite a hawkish governor back in the day, and he favours shrinking the Fed’s balance sheet, though he has since said the Fed should be cutting rates - otherwise he would not be getting the job," commented Saxo UK's Neil Wilson.
While he has recently warmed to the idea of rate cuts, his appointment is seen as a win for institutional independence, a factor that could provide a much-needed floor for the greenback, Wilson noted. However, his focus on deregulation and AI-driven cooling of inflation may inadvertently drive long-term yields higher.
The news has sent waves through the commodities sector, particularly affecting gold and silver. As Wilson puts it, "a more conventional candidate who’s not a complete Trump stooge is negative for the speculative gold rampup."
9.10am: Greenback "back in the green"
The US dollar appears to be back in favour. After a period of "debasement" that had investors fleeing to gold, the greenback has staged a sharp recovery. Why the sudden love? A mix of cooling geopolitical tensions with Iran and relief over a potential government shutdown has given the currency a boost.
But the real kicker is the likely appointment of Kevin Warsh as Fed Chair. His hawkish reputation is pushing Treasury yields higher and catching "safe-haven" fans off guard. As interactive investor’s Richard Hunter puts it: "The move away from the dollar 'debasement' trade... was something of a surprise to investors."
With the dollar rising, gold’s breathless run has hit a 4% wall.
8.45am: Quick about turn
The rain has stopped, and the sun has come out in London, just as the Footsie turned around too.
The index is now 6 points up at 10,177.67, no thanks to the miners, who remain mired in the red.
Experian PLC (LSE:EXPN) now tops the leaderboard after the FTSE 100 group announced the launch of a US$1bn share buyback on the back of its weak share price and recent trading that it said remained strong.
8.15am: Soggy end to the week
The London open is mirroring the local weather: dreary and damp
The FTSE 100 shed 15 points to 10,157.03 in opening trades, pulling back from yesterday's fresh intraday record.
Miners are weighing heavily as metal prices pull back sharply from recent highs.
Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF, FRA:6E2) is down 6.5%, with Antofagasta PLC (LSE:ANTO), Fresnillo PLC (LSE:FRES), Glencore PLC (LSE:GLEN) and Anglo American PLC (LSE:AAL) making up the top five biggest losers this morning.
Airtel Africa PLC (LSE:AAF) is leading the gainers, up 6.8%, after Q3 results showed soaring growth, with revenue up 28.3% and 179.4 million customers. Mobile Money hit a $210bn milestone, while EBITDA margins expanded to 49.6% amid heavy network investment.
Experian PLC (LSE:EXPN) is up 1.8% and easyJet PLC (LSE:EZJ) gained 1.4%.
Gold is now 4.4% down at $5,168.07 an ounce, while silver has skidded more than 8% lower to $106.60. Copper futures have also retreated more than 3% after hitting a new record on Thursday.
"The pullback, driven by the unwinding of overly extended positions, was not entirely unexpected in the precious metals market," commented Tickmill Group's Patrick Munnelly.
"Traders appear to be factoring in the possibility of Warsh taking the helm at the Fed, adjusting their expectations for future monetary policy. A more hawkish stance could signal tighter financial conditions, potentially slowing economic growth, pressuring equities, and driving bond yields higher. "
8am: AstraZeneca steps up weight-loss race
AstraZeneca PLC (LSE:AZN, NASDAQ:AZN) is splashing out $1.2 billion upfront on a new partnership with China’s CSPC Pharmaceutical Group as it ramps up its push into the booming weight-loss drug market.
The deal gives AstraZeneca rights outside China to eight drug programmes, including a once-monthly injectable designed to curb appetite, similar to Lilly’s Tirzepatide.
The medicines use CSPC’s LiquidGel technology and tap into GLP-1 and GIP hormones, the same targets behind Ozempic’s success. The agreement could eventually cost AstraZeneca up to $4.7 billion, plus royalties, as it looks to build a competitive obesity treatment portfolio.
7.45am: Fed chair nomination likely today
Brace yourselves: the Fed chair guessing game is hitting a fever pitch! Bloomberg reports the White House is eyeing Kevin Warsh, sending his Polymarket odds to a staggering 92%. Warsh isn't a newbie; he was a Fed Governor during the 2008 crash.
Markets are already getting "Warsh-weary." Long-term yields are climbing while S&P 500 futures dip. Deutsche Bank's Jim Reid notes the vibe is shifting: "The initial market reaction consistent with a view that the Fed put for asset prices could be less strong under Warsh."
Basically, investors worry that the safety net is shrinking. Gold and oil are sliding, while the dollar reigns supreme.
7.15am: FTSE 100 called marginally higher
FTSE 100 futures were pointing to a flattish start on Friday after London's benchmark index hit a new intraday high in the previous session before paring its gains.
Spreadbetters have the market opening 2 points higher when trading gets underway. The index ended Thursday 17 points up at 10,171.76 after hitting 10,277.72 earlier in the afternoon.
Wall Street provided little direction, with a mixed finish as investors ditched Microsoft following its earnings, driving the Nasdaq 0.7% lower. The S&P 500 fell 0.1%, while the Dow Jones added 0.1%.
Gold has also eased back from its recent highs, trading 4% down at $5,247.51 an ounce this morning, while silver is close to 6% weaker at $109.52
Asian markets are mostly weaker this morning. Tokyo's Nikkei 225 is a few points softer, while Shanghai's SSE Composite has shed 0.8%, and the Hang Seng in Hong Kong is close to 2% lower. The Kospi in Seoul is bucking the trend with a 0.6% gain, and the ASX 200 closed 0.7% down.