The FTSE 100 index in the UK ended the latest trading session displaying a minor increase of 0.07%. This comes on the heels of a day predominantly spent in the negative territory as market participants assessed the possible ramifications of forthcoming US tariffs on international trade dynamics and expenses. With the impending inauguration of Donald Trump as the President of the United States, he has pledged an aggressive approach towards tariffs, which includes imposing tariffs of up to 10% on global imports, a daunting 60% on Chinese goods, alongside a substantial 25% surcharge on imports from Canada and Mexico. Market analysts have shared insights, with Macquarie commenting, "Our perspective on US import tariffs suggests that Trump will likely adopt a transactional stance—favoring concessions from trading partners across a diverse array of strategic matters in lieu of tariffs." The analysis continued, emphasizing the impracticality of relocating all manufacturing back to the US, advocating for a degree of 'friend-shoring' essential for sustaining US economic growth while controlling inflation.
Notably, punitive tariffs directed at China remain a probable outcome. In the realm of corporate performance, BofA Securities has reaffirmed its buy recommendation for the London Stock Exchange Group (LSEG). This endorsement follows the company's recent inclusion in BofA's '25 stocks for 2025' strategy, with the research firm subsequently amending its price target from 125 pounds to 130 pounds.
Additionally, BofA revised upwards its earnings per share (EPS) and revenue projections for 2024, 2025, and 2026, which contributed to an increase of 1.66% in LSEG's share price during the close of trading. "LSEG demonstrates a robust defensive posture amid persistent macroeconomic uncertainties, with its revenue streams exhibiting minimal correlation to crucial financial market indicators such as interest rates, equity performance, and market volatility," commented BofA Securities. Conversely, Shell encountered a decline of 1.43% following a disclosure of an adjusted loss estimated between $200 million and $400 million attributed to its corporate division for the final quarter of 2024.
RBC Capital Markets, in response, has revised its earnings forecasts lower for Shell in the fourth quarter of 2024, citing a lackluster trading update as a factor. The RBC analysis noted, "While we do not foresee this operational update to substantially shift the long-term investment outlook, and believe it won’t affect the share buyback trajectory in 2025, we do anticipate that shares might lag in performance in the near term as the market acclimatizes to these downgraded expectations." The corporate landscape continues to fluctuate, reflecting the interplay between governmental policies and private sector performance, indicative of the broader economic context in which investors operate..