FTSE 100 and Wall Street strike an upbeat tone to start the week

Soaring copper prices and hopes of a summer holiday pushed the FTSE 100 to close higher on Monday while Wall Street rose ahead of a busy week for big tech earnings.

London’s blue-chip index came under pressure this morning due to a stronger pound and weaker oil prices. However comments made by Ursula von der Leyen saw travel stocks soar during the session.

The European Commission President indicated European destinations would be open for vaccinated Americans, sending British Airways owner IAG and jet engine maker Rolls Royce higher.

The FTSE 250 index strenghtend 0.9 per cent. The mid-cap index closed up 205 points, to 22,577.

Soaring copper prices push FTSE higher

Rolls Royce and IAG closed up 5.8 per cent and 4.2 per cent respectively following von der Leyen’s comments.

Pearson was another strong performer this afternoon, closing up 3.5 per cent, after posting an upbeat first-quarter earnings update.

It saw the company post a five per cent rise in underlying revenue growth in the first quarter of 2021, thanks to strong demand for online learning courses.

Heavyweight oil majors BP and Royal Dutch Shell fell due to lower crude prices and were among the biggest drags to the index.

The mining index lifted as Chilean miner Antofagasta gained 4.3 per cent after copper prices soared to their highest in over a decade.

Rio Tinto was also up 1.1 per cent today, while Glencore enjoyed a 3.4 per cent boost.

“Copper is often considered a good gauge of economic activity, so the rally in copper certainly raises the question of whether this is Dr Copper calling,” said Sophie Griffiths, OANDA’s market analyst for the UK and EMEA. “The recovery trade seems to be increasingly evident through commodities, particularly base metals and lumber.”

Upbeat start to the week

Globally, the mood was upbeat amid concerns over rising cases in parts of Asia ahead of US Federal Reserve’s meeting, series of economic data and earnings reports from U.S. tech heavyweights and big UK banks this week.

“With a data calendar as juicy as this week, Monday morning Covid-19 nerves are likely to be quickly forgotten,” said Jeffery Halley, senior market analyst at OANDA.

The FTSE 100 has gained 7.3 per cent year-to-date as encouraging economic data on the back of speedy Covid-19 vaccinations and constant policy support from the government lifted optimism about a stronger economic recovery.

Goldman Sachs expects Britain to grow by a “striking” 7.8 per cent this year, more than the United States following a nearly 10 per cent slump last year as it was hit by longer coronavirus lockdowns than many of its peers.

Wall Street closes higher with focus on big tech

The S&P and Nasdaq closed at record highs ahead of a busy week with focus on mega-cap companies like Google parent company Alphabet, Microsoft, Apple, Facebook and Amazon. 

The Dow Jones closed 0.2 per cent lower despite a strong start to the day. The S&P 500 and Nasdaq closed at record highs ahead of Tesla’s quarterly report.

The benchmark index closed out 0.18 per cent higher while the Nasdaq climbed 0.87 per cent to 14,138 points.

Tesla kicks off the week of big tech earnings this evening: expectations are very high after strong first quarter and production numbers. 

The electric carmaker is expected to report an earnings per share of 79 cents in the first quarter, up from 23 cents in the same period last year. The consensus revenue forecast for the first quarter is at $10.29bn, up 72 per cent from a year ago. 

Equity markets will also be looking ahead to the Federal Reserve meeting this Wednesday, anticipating little change to guidance on the eventual tightening of policy. 

Elsewhere green shoots of a recovery are starting to emerge with the latest figures showing new orders for US-made capital goods rose last month and shipments jumped. 

Core capital goods orders rose 10.4 per cent year-on-year in March, boosted by machinery, primary and fabricated metal products. 

Figures from the Commerce Department join solid retail sales and data from the labor market indicating the vaccine rollout and stimulus measures are starting to make a difference.