Daily market update: FTSE 100, US rally, M&G, Costco

“The story on tariffs has more twists than an M. Night Shyamalan film, with a federal court providing the latest plot point overnight,” says AJ Bell investment director Russ Mould.

“The relatively muted response to the US Court of International Trade ruling apparently wiping out tariffs on Wednesday betrayed an understandable scepticism about that being the end to the story and sure enough a federal appeals court has decided the tariffs can stay while the Trump administration’s appeal is heard.

“As well as being difficult for investors to navigate, the uncertainty makes it very tricky for businesses to make decisions and specifically to allocate investment. Clearly, a lot of companies and the financial markets would prefer a situation with zero tariffs but at this point just knowing where we will land in the long term would almost be welcomed more.

“A rally on Wall Street ran out of steam overnight and futures markets are pointing to declines later for the main indices. The FTSE 100 managed gains on Friday morning despite the miners trading lower amid the continuing economic turmoil.

“The usually staid insurance sector burst into life as M&G’s strategic partnership with Japan’s Dai-ichi Life generated excitement. The deal is expected to generate significant business for the company over the next five years.”

Costco

“Membership-based warehouse retailer Costco fell modestly in after-hours trading despite its quarterly earnings coming in a smidge ahead of expectations.

“Unlike most of its peers, Costco does not provide annual guidance but investors can read between the lines based on management’s discussion on the challenges higher costs and tariffs are creating for the business.

“Crucially these earnings encompass a decent chunk of the period following Liberation Day and the announcement of sweeping tariffs so to chalk up 8% like-for-like growth demonstrates an impressive level of resilience.

“Costco could stand to benefit if economic worries cause US households to monitor every cent, given it offers competitive prices and bulk discounts which could act as a driver for membership renewals and for others to join.

“The company’s large size means it has a strong negotiating position with suppliers and the company hasn’t sat on its hands in response to levies on overseas goods – rerouting goods from countries facing higher tariffs to its operations outside the US and sourcing more items for its in-house brand, Kirkland Signature, in the countries or regions where the items are sold.

“The company has also been selective on the products where it will absorb any costs associated with tariffs and where it will pass them on – prioritising keeping prices low on staple products which should continue to get people through the tills.”

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