FTSE 100 Slips, Oil Falls, NVDA Turns Green YTD

Key Points

• FTSE back below 8,600, Aviva results in line

• UK fastest growing G7 economy in Q1 – focus on UK mid-caps

• Oil slides on US-Iran nuclear deal – BP, Shell hit hard

• US looks to lower bank capital requirements, possibly to lower yields

• AMD +5% on $6bn buyback plan, S&P 500 notches third day of gains

• NVDA turns green YTD, joining META and MSFT among Mag7

• Later today - US retail sales data, Walmart to report, Alibaba due

This content is marketing material. This article is not investment advice, capital is at risk.

Big picture: UK economy shows resilience

UK GDP data was better than expected as the economy grew by 0.7% in the first quarter, which made it the fastest-growing economy in the G7. Usual caveats that a lot of this is front-running NI hikes and tariffs, but this undeniably a better news story for the chancellor. And we can even see +0.5% per capita. Real GDP +1.3% over the year is ahead of the Bank of England’s forecasts...Problem is survey data suggests a slowdown in Q2, which is why the Bank of England needs to be alert to the risks. Tariff rush seemed to be evident - exports of goods to the US increased by £2.4bn in Q1 to £17.5bn, the highest level since Q4 2022.

Investors should pay heed to the underling strength evident here – UK mid-caps with a strong UK earnings profile.

Crude prices now down over -3% on the day as Donald Trump remarks that US and Iran are getting closer to a deal on the country’s nuclear program. This will most like be in exchange for sanction relief, potentially adding to OPEC+ supply moving forward, which has already turned in the direction of more output. 

BABA earnings coming – big read on the health of the Chinese consumer here and strength of AI growth lever.

UK

The FTSE 100 edged down half a percent in early trade on Thursday after losing a bit of ground on Wednesday, slipping further below the 8,600 level, dragged down by an almost 7% fall for 3i Group after its earnings and a sharp decline in heavyweight stocks BP and Shell as oil price tumbled on a possible US-Iran nuclear accord.

Aviva Q1 results were in line with a strong start to the year evident. General insurance premiums rose 9% to £2.9bn with the UK and Ireland showing strength a +12% to £2.0bn. The good start to the year means management says it’s confident of hitting full-year targets.

3i Group – given the recent commitment by pension funds to invest in private companies the performance of 3i Group is an interesting story. Shares are down about 7% in early trade on Thursday after results somewhat disappointed, despite a total return over the year of 25%. Looks like all about Action, some underwhelming news from elsewhere in the portfolio. The company also warned that “ongoing market uncertainty” will “disrupt transactions across the wider private market”.

National Grid shares rose as it delivered a positive trading update with underling profits +12% and pre-tax profits +20%, leading to an EPS +2% to 73.3p, slightly ahead of guidance.

ITV ticked down with advertising revenues coming under pressure and studios revenue up a shade. Total ad revenues (TAR) fell 2% against a 1% gain for studios. Total group revenue was down 1% at £875 million. Key guide on ad revenues this year looks soft but not too far beyond what was already expected - compared to the same period in 2024, TAR is expected to be down around 14% in Q2 2025 and down around 8% in H1 2025 against the strong comparatives resulting from the Men's Euros in 2024. Macroeconomic uncertainty may recede now and loosen purse strings at the big advertisers.

Watches of Switzerland - luxury play - shares rose on a solid full-year update with +12% group revenue growth in H2 to boost the FY performance to +8%, marked out by +19% growth in the US in the second half of the year. Demand for key luxury names continues to outstrip supply. Company mindful of tariff risk but says full-year earnings likely in line. Shares have taken a bit of a hit this year – down 26% along with the rest of the luxury space.

Elsewhere, Premier Food said branded revenue up 5.2% due to strong branded volume growth; total headline revenue1 up 3.5%. Greencore shares jumped 5% as it confirmed at £1.2bn takeover for rival Bakkavor.

US

The S&P 500 eked out a small gain but the Dow Jones slipped as UnitedHealth is having a disaster – down another 8% after-hours after CEO stepped down and reports it’s under investigation for possible Medicare fraud. Shares have halved in value in the last month – not seen anything like it.

Nvidia rallied 4% on selling chips to Saudis, while AMD rallied almost 5% after it announced a $6 billion buyback. The rally means Nvidia joins Meta and Microsoft to become the third member of the Magnificent Seven to go positive year to date.

Meanwhile, it’s being reported that US authorities are set to announce a cut to the largest US banks' capital requirements, the supplementary leverage ratio, or SLR which I talked about a couple of days ago. This would allow the banks to leverage their balance sheets more, and is likely aimed at tempering any further rise in Treasury yields, as it would allow banks to hold more US Treasuries. This could be positive for Financials and for Growth.
30yr Treasury bumping up against 5% and 10yr at 4.5%...it's not really about inflation or growth here at the long end but how much investors are prepared to eat duration risk with an uncertain macro and policy situation - showing signs of the market's indigestion - issuance + no buyer of last resort with official foreign demand weakening (US repudiation story) and Fed still doing QT...stocks seem to be front-running some kind of intervention and the SLR move would be the start of this - whether it works is another matter but clearly dollar negative.

Coming up...
US retail sales + WMT earnings...look for read across on the big retail stocks such as Kroger, Dollar Tree, Dollar General, Target, Home Depot.

Empire State and Philly Fed manufacturing surveys are also due up – how bad was the feeling among businesses due to tariffs before the recent de-escalation between the US and China.

Fed chair Jay Powell is also to speak.

Meanwhile...

The winners from Trump’s Saudi Arabian escapade...

Saudi Arabia pledged to invest $600bn in the United States, including $20bn in artificial intelligence data centres from Nvidia and AMD, purchases of gas turbines from GE Vernova and other energy equipment worth $14.2bn, and nearly $5bn in Boeing jets. It also featured a $142bn arms deal the White House called the “largest defence sales agreement in history”.  Now that Boeing deal is being trumped (hahaha) by an even bigger order from Qatar - question is how on earth does Boeing fulfil all these orders while Ryanair is still waiting on its jets..?

Bank of America raised is price target on Nvidia and AMD off the back of the deal...plus the White House is rescinding some Biden-era restrictions on chip exports to China. 

Dan Ives at Wedbush said the massive AI buildout in Saudi and this could open up a huge opportunity and TAM for Nvidia, Palantir, Microsoft, Amazon, Alphabet, Tesla and many other well positioned chip/software names over the coming years".

And finally, Alex Karp’s presence in Saudi Arabia along with Trump underlines how Palantir sits within the military-industrial complex.