The FTSE 100 shows no signs of slowing, US markets brush off Washington’s gridlock, and Tesla faces a high bar on deliveries. Oil prices hover near four-month lows, while Tesco reminds investors that every little helps. Matt Britzman, senior equity analyst at Hargreaves Lansdown, shares his take on the latest market moves.
Matt Britzman, senior equity analyst, Hargreaves Lansdown:
“London’s blue-chip index is on a prescription for success, extending all-time highs after yesterday’s dose of pharma strength led to the FTSE 100’s best session since July. Pharma stocks were the standout, racing higher on news that Pfizer struck a deal with the US administration to slash drug prices and bypass tariffs. The move provided long-awaited clarity on pricing and lifted hopes that others could follow. Today’s big results come from Tesco, where the grocery giant is proving that every little helps as it battles hard against tough competition.
The S&P 500 and Nasdaq 100 closed at fresh all-time highs as investors shrugged off Washington gridlock and focused on softer labour data that reinforced expectations for Fed rate cuts. ADP’s surprise decline pushed odds of an October cut near 100%, sending short-dated Treasuries higher while equities drew support from easing policy bets and optimism ahead of earnings season. Markets will likely give the shutdown a week or two of leeway before any cracks start to show.
Tesla reports quarterly deliveries before the open, with consensus sitting near 440k, though investor expectations are closer to 470k or higher given strong early data. The pull-forward effect from the expiring US EV credit should provide a boost, mirroring trends seen at GM and Ford, while robust weekly numbers from China highlight resilience in a fiercely competitive market. Energy remains the wild card with its lumpy deployment patterns, but a new record is on the cards. Shares have been in overdrive for the past few months, and there are some new forces at play with changes to the US tax credits, raising the chance of volatility for what is usually a well-flagged update.
Oil futures edged up in early trading, with Brent crude moving to $65 per barrel. But prices remain near a four-month low as oversupply fears persist ahead of this weekend’s OPEC+ meeting. US crude inventories rose by 1.8 million barrels, while gasoline demand hit a six-month low, amplifying concerns over near-term demand. Weak Asian factory activity and a US government shutdown further cloud the demand outlook, keeping pressure on prices.”
The author holds shares in Tesla.
Derren Nathan, head of equity research, Hargreaves Lansdown:
“Tesco’s stores and vans have delivered a little extra in the first half. Underlying operating profit of £1.7 billion came in a shade ahead of market forecasts, but intensified competition and cost pressures meant that growth in profits lagged sales by some margin. Still, management were confident enough to raise the mid-point of full-year profit guidance by 5% to £3.0 billion. It’s not a spectacular change, but every little helps.
Tesco’s broad offer to customers at all price-points is helping it to drive sustained market share gains, something it’s done in practically every month of the last two years. Competition remains fierce and household budgets are under pressure, but Tesco is well placed to continue investing in value and quality. However, the valuation feels broadly up with events, so today’s upgrade is unlikely to spark too much excitement on the stock market.”
