UK stocks lower, tougher times ahead for Next, Nvidia unveils new products, Meta appoints prominent Trump supporter to board and UK retail sales data disappoints

“The FTSE 100 was dragged lower by housebuilders and miners after mixed trading in the US and Asia,” says AJ Bell Investment Director Russ Mould.

“Asia-focused financials were lower after the Hang Seng index dropped sharply. The sell-off was linked to news the US is putting several Chinese firms in its crosshairs including Tencent.

“On the UK market, shares in housebuilders fell after figures from Halifax showed house prices unexpectedly slipped in December – the first monthly decline in nine months.

“The fact this drop-off is happening despite the short-term fillip provided to the market by people rushing to beat looming stamp duty changes is cause for concern in the housebuilding sector. The question being what happens when thresholds are reduced at the end of April.

“It demonstrates the impact of higher for longer interest rates and the rise in borrowing costs in the run-up to and wake of the Budget – with mortgage affordability and availability one of the key drivers of property transactions.”

Next

“At first glance, raised profit guidance for the current financial year implies Next is holding up well in a tough retail market. Look closer and there are several negative points which imply its next financial year won’t be a breeze.

“Guidance for the year to January 2026 is below market expectations and a £73 million hit from extra costs linked to Rachel Reeves’ Budget decisions won’t be completely clawed back by price hikes and operational savings. High street activity is lagging online and there is a shift in consumer spending patterns.

“Shoppers are buying fewer but slightly more expensive products, which implies Next has lost its appeal as the destination of choice for basics. Splashing a bit more cash on an item would suggest that shoppers want to buy something that lasts for a long time. That spells trouble down the line for Next if these shoppers aren’t back for replacement clothes for a while.

“Low growth in Next’s finance interest income also suggests consumers are being more cautious and are spending more of what they’ve already got rather than relying on credit and worrying about the consequences later on.

“If Next is the bellwether for UK retail, it’s hard to be too excited about the sector’s near-term prospects. However, the positive market reaction to the trading update would imply that investors aren’t worried. They might simply view the slight miss to forward expectations as Next ensuring it has a low bar to clear next time. That’s fine if it can keep pulling a rabbit out of the hat, but the magic can’t last forever.”

Nvidia

“Nvidia’s runaway success means it has high expectations to meet on everything it does. The launch of its next-generation gaming chips was always going to be a pivotal moment and true to its style, Nvidia has unveiled something that promises to be faster and better than what’s already on offer.

“The RTX 50-series will use its Blackwell AI technology to support highly detailed, hyper-realistic graphics. One can just imagine how jaws dropped across the gaming community after seeing the demonstration of the technology.

“This launch is a reminder that Nvidia is not just about AI. The business’ success was founded on gaming technology and RTX 50 implies that it remains on top of its ‘game’.

“Not wanting to leave AI fans short-changed, Nvidia also unveiled a host of other innovations including AI that can better train robots and cars, and a desktop computer for programmers.

“Investors love the narrative around Nvidia and the string of announcements at the CES tech conference provided plenty of fodder to keep people excited.”

Meta

“Social media giant Meta demonstrated its wish to build bridges with the incoming administration in the US as it added Ultimate Fighting Championship chief executive and prominent Donald Trump supporter Dana White to its board of directors.

“Trump has given Meta the odd body slam in the past – accusing its Facebook platform of censoring right-wing contributions – and Meta clearly sees the importance of making nice with the president-elect.

“This follows the exit of former UK deputy prime minister Nick Clegg as global affairs chief, to be replaced by prominent Republican Joel Kaplan, and Mark Zuckerburg dining with and publicly congratulating Trump in the wake of his election victory.

“Meta clearly sees the importance of a good relationship with Trump as it looks to navigate potential regulatory pressures.”

BRC retail sales

Dan Coatsworth, investment analyst at AJ Bell, comments:

“The UK retail sector had a spectacularly tough year in 2024 as interest rates failed to come down as fast as previously expected, leaving consumers cautious about spending while countless households up and down the country remained under financial pressure.

“A gloomy Budget hurting business confidence made matters worse, leaving a lot of people to fear about job security and ultimately causing the final quarter of the year to be a disappointing one for shopkeepers.

“Retailers had pinned their hopes on a strong end to 2024, but the BRC’s figures suggest they didn’t get the desired Christmas present. The prospect of price hikes to offset higher costs suggests that the retail sector will remain in the doldrums as 2025 unfolds.

“Once again, we could see a situation where consumers must justify any expenditure, meaning ‘nice to have, but not essential’ product sellers are going to find life hard in the coming months. Retailers will either have to slash prices and accept lower profit margins or come up with some creative marketing to convince shoppers they cannot live without certain goods or services.”

These articles are for information purposes only and are not a personal recommendation or advice.