Market report: UK Retail in focus, commodities react to US action in Venezuela

Matt Britzman of Hargreaves Lansdown highlights a crucial week for Next, M&S and Sainsbury’s as investors assess the resilience of the UK consumer, while markets absorb a surge in gold and early weakness in oil prices.

Matt Britzman, senior equity analyst, Hargreaves Lansdown:

“The FTSE 100 has opened higher this morning, but remains just shy of the 10,000 mark. Next kicks off a big week for UK retail on Tuesday, with investors looking for another strong update after October’s sales update smashed expectations and profit guidance was lifted to £1.1 billion. Marks & Spencer reports on Thursday, hoping a solid Christmas can help it move past last year’s cyber-attack and rebuild confidence. Sainsbury’s follows on Friday, with festive trading likely to support its upgraded profit target of more than £1 billion. Together, these updates will help to paint a picture of consumer spending and whether retailers kept the tills ringing over Christmas.

Gold climbed over 2% to breach $4,420 an ounce, as traders seek shelter from geopolitical tremors sparked by Washington’s dramatic move in Venezuela. The metal’s rally builds on last year’s stellar run, with its attractions as a so-called safe haven colliding with uncertainty over US rate signals ahead of Friday’s payrolls. For now, gold is wearing the crown as the market’s preferred insurance policy against both political risk and policy surprises.

Oil is down in early trading, with Brent hovering around the $57 mark, as traders weigh up the impact of US actions in Venezuela. The immediate price reaction isn’t quite as extreme as some may have thought. That’s because Venezuela may have the world’s biggest reserves, but it’s only pumping roughly 1 million barrels a day (under 1% of global output), so the short‑term barrel maths doesn’t scream ‘crisis’. The real market-moving question is the medium-term impact. If sanctions ease and serious investment flows back into creaking infrastructure, Venezuela could eventually add meaningful supply, but this won’t be a quick process.”