Daily market update: Apple, Amazon, Shell, NatWest

“The FTSE 100 was on course to extend its winning streak after signs of a potential de-escalation of the tariff stand-off between US and China gave investors real heart,” says AJ Bell Investment Director Russ Mould.

“There were strong gains in Asia and on Wall Street overnight. The latter helped by strong after-hours results from Microsoft and Meta Platforms on Wednesday. Although subsequent more mixed earnings from Apple and Amazon may have soured sentiment a touch.

“In London, resources names were in demand, with iron ore miner Ferrexpo among them as Washington and Kyiv secured a minerals deal.”

Apple

“Apple claimed the sort of earnings beat that was never likely to win much favour from the market. The first three months of the year were slightly stronger than expected but this may well have resulted from people pulling forward purchases of iPhones in anticipation of a tariff impact – even if management have downplayed this as a factor.

“The company has flagged a meaningful cost impact in the current quarter resulting from US trade policy and while it’s fortress-like balance sheet means it can absorb these extra costs with relative ease there remains considerable unpredictability about the impact on Apple’s supply chain.

“The company received a stay from the Trump administration thanks to an apparent tariff exemption for consumer electronics but how long this lasts remains to be seen and the company is still planning to shift manufacturing out of China and into countries like India which face less heavy import levies.

“At a time when its products business is fraught with such uncertainty it’s not great that growth on the services side has disappointed. While only a smidge below forecasts, it will help build on the narrative that Apple has failed to fully take advantage of the opportunities provided by AI.”

Amazon

“While its e-commerce arm is much more high profile, the real engine of growth at Amazon is its AWS cloud computing arm. The fact this didn’t manage the recently reported better-than-expected performance seen at the cloud operations of rival outfits Microsoft and Alphabet is a cause for some disappointment.

“A weak outlook as the company grapples with the steep tariffs imposed by the Trump administration – from which it recently drew ire for an apparent plan to separately list tariff costs on its ultra-low-cost Haul platform – is probably to be expected given around a quarter of the items it sells come from China.

“These quarterly numbers from Amazon were far from a disaster and the contribution from the fast-growing advertising division was a definite plus point, but nor did they do enough to fully reassure investors on the company’s ability to steer a course through the current uncertainty.”

Shell

“Shell has the advantage at the moment that, for any of the difficulties it faces it can just point its finger down the road at BP and say, ‘at least we’re not as bad as that’.

“This trend of being flattered by comparison with its London-listed counterpart continued with first quarter results. Yes profit was lower thanks to easing commodity prices but it announced a 14th consecutive quarter of at least $3 billion in share buybacks.

“Shell which pivoted towards natural gas more than a decade ago continues to see benefits from this strategy with its integrated gas division delivering a robust showing. Gas could have a significant role to play as the world looks to wean itself off more polluting fuels like coal and oil.

“The loss chalked up by the renewables and energy solutions arm shows why Wael Sawan is keen to prioritise other areas of the business where it can.

“Where investors may feel some concern is over lower levels of cash flow and an uptick in net debt – particularly given this quarter does not reflect the more pronounced slump in oil prices seen since Liberation Day.”

NatWest

“There were enough positives in today’s update from NatWest to suggest it could provide a platform for the final push to full privatisation. The government stake may now be very modest but eradicating it entirely would still represent a significant milestone and would close the chapter on the company’s long, slow recovery from the 2007/8 financial crisis.

“It would likely give management more freedom of manoeuvre and CEO Paul Thwaite has said he is minded to look at acquisitions – although presumably not on the scale or with the level of hubris which contributed to the bank’s downfall under Fred Goodwin.

“The company has enjoyed a really strong start to the year with returns lifted by a higher net interest margin – although full-year guidance has been left unchanged for now, reflecting lingering uncertainty.

“Like several of its peers, NatWest has felt it prudent to increase provisions for bad debt – based not on what it is necessarily seeing in its loan book but due to the uncertainty created by US tariffs.”

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