Market snapshot: FTSE 100 still turning heads

As well as the possibility of further tariff developments, there's another wave of company results on both sides of the Atlantic this week. ii's head of markets runs through the big events to watch.

21st July 2025 08:21

by Richard Hunter from interactive investor

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As the earnings season moves into full swing on both sides of the pond, the underlying concerns around tariffs and economic strength continue to linger.

In the US, reports that the President would be looking at tariffs of between 15% and 20% on the European Union – a move likely to result in some aggressive retaliatory action – was enough to take the shine off the recent run which has seen another testing of record highs for the main indices.

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Meanwhile, a consumer confidence survey revealed an improvement in fears around inflation, also boosted by the apparently limited impact thus far of the trade wars. Although the US economy remains battered but not bruised, the consumer is central to its fortunes and it remains unclear whether the current round of spending simply reflects purchases being brough forward as opposed to ongoing optimism.

The earnings season thus far has been better than expected, albeit set against a lower bar of expectations and despite some disappointingly received numbers on Friday from the likes of Netflix Inc (NASDAQ:NFLX), 3M Co (NYSE:MMM) and American Express Co (NYSE:AXP).

Investors have also noted that the Sage of Omaha, Warren Buffett, has been trimming his bank holdings of late, although results from the likes of JPMorgan Chase & Co (NYSE:JPM) and The Goldman Sachs Group Inc (NYSE:GS) show no signs of stress for the time being.

This week the water will be tested further on the economy with numbers from a slew of companies including Coca-Cola Co (NYSE:KO), General Motors Co (NYSE:GM), AT&T Inc (NYSE:T) and International Business Machines Corp (NYSE:IBM), as well as “Magnificent Seven” constituents Alphabet Inc Class A (NASDAQ:GOOGL) and Tesla Inc (NASDAQ:TSLA).

In the meantime, the market remains within touching distance of the record highs recently set and, in the year to date, the Dow Jones, S&P500 and Nasdaq have added 4.2%, 7% and 8.2% respectively.

Asian markets were mixed, with Japan closed for a public holiday amid some political uncertainty following the election, which adds caution to the as yet unresolved tariff discussions with the US and with inflation rearing its head. More positively, China is currently seeing the benefit of some unexpectedly resilient economic data, alongside some apparent progress between the world’s two largest economies in trade war negotiations.

The UK is also braced for an escalation of corporate updates this week, including half-year numbers from the more domestically focused Lloyds Banking Group (LSE:LLOY) and NatWest Group (LSE:NWG). For each, shareholder returns will be a key focus, along with any bad debt allowances and mortgage growth figures.

Lloyds may provide an update on impairments especially relating to motor finance commission arrangements, for which it has already set aside some £1.2 billion, while NatWest may give some indication on its acquisition policy following the removal of the government stake and its purchases of the Metro mortgage book and Sainsbury’s Bank. There was also an apparently rebuffed approach for the UK arm of Santander.

Separate reports showing the continuing pressure on the UK economy largely failed to upset the applecart of progress for the main indices. A slip in average property prices was accompanied by numbers showing that profit warnings among companies were significantly on the rise, with most pain being felt in the retail and hospitality sectors, where government policy changes and geopolitical uncertainty continue to crimp company planning, investment and hiring.

Even so, the FTSE250 has long since shaken off the weakness from previous months and, amid some speculative overseas buying on lower valuation grounds, the index is now ahead by 6.4% so far this year.

The premier index is still attracting attention as an investment destination, testing new highs as investors continue to appreciate stability of earnings, defensive sectors and an average dividend yield in excess of 3.3% which boosts the total return. A marginally higher gold price and a risk-on approach lifted the mining sector in early trade, with the FTSE100 edging higher once more and now up by a touch over 10% in the year to date.

These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

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