Suddenly the London market is coming alive. We’ve been talking at length about the problems facing the FTSE and now it’s roaring – a new record close for the index has been followed up with fresh gains to a fresh intra-day high at 8,098 this morning. It has risen 0.6 per cent this morning, but such sentiment isn’t being matched on the mainland, with shares in Paris and Frankfurt both down this morning, which follows a flat day in New York.
But, it’s not all positive for London: a top company may be taken out and it’s the usual story of beaten down valuations and a foreign investor looking for value and some prized assets. Australian-listed BHP made an offer for Anglo American for £31bn – Anglo is reviewing the deal, which would create the world’s largest listed miner and copper producer.
Let’s face it, this is monster. Anglo shares jumped 11 per cent, it has not had a great year – the rally this morning has erased the losses of the last 12 months, just. It’s got the assets but is not maybe doing as well as it might; in December the company downgraded its production targets. BHP clearly wants the copper assets – it's not long after buying Oz Minerals. Clearly, competition authorities would take note due to the position in copper a combined company would have. South African platinum and iron ore assets would be spun off, which could be politically sensitive. If BHP doesn’t make it work, others may try. More on that here
Meta shares plunged 15 per cent after-hours as investors balked at spending plans. The year of efficiency that investors absolutely loved is giving way to a couple more years of mega spending. More on that here
Boeing not so bad, but still bad: it lost $355mn in the first quarter, down from a $425mn a year earlier. Revenue dropped 8 per cent. More on Tesla: Bank of America says the earnings update “addressed key concerns ... and revitalized the growth narrative” with new model launches, robotaxi, cost savings, the potential licensing of FSD, but admitted that “the combination of all of these may not structurally change the long-term path of the company”. Tesla shares finished the day up 12 per cent.
Bank of Japan: Yesterday USDJPY has surged above 155 – a line in the sand that seems to keep moving. The initial break was promptly smacked back down but the dam soon burst and USDJPY headed to 155.70 – we are getting nearer to the inevitable. The BoJ could take a lesson from Indonesia, which surprised markets with a rate hike to shore up the sliding rupiah. Bank Indonesia (BI) raised the seven-day reverse repurchase rate by 25 basis points to 6.25 per cent. The BoJ is due to meet Friday. Today is US GDP and weekly claims data.
Bond markets on the move, pushing the dollar down against its peers. UK 10-year gilt yields rose about 10bps to 4.35 per cent, the highest since November. Similar moves were noted on Italian and German debt as yields rose to the highest in five months. EURUSD also touched its best in a fortnight, hitting 1.07.
The Trader is written by Neil Wilson, chief market analyst at Finalto
