The FTSE 100 dipped marginally on Friday as corporate announcements again weighed on the index, and investors digested the latest developments from the White House.

London’s leading index was down 0.15% at the time of writing but remained within touching distance of all-time record highs.

Trump’s threat of ‘reciprocal tariffs’, which could target every trading partner based on existing tariffs on US imports and trade balances, gave investors something to think about on Friday with a potentially complex impact on global trade.

The president’s new plan risks a slowdown in activity as businesses cautiously move forward. Such a move by Trump also risks higher inflation.

Given the backdrop of uncertainty, UK investors with holdings in a selection of London’s leading shares should be content with this week’s performance as the FTSE 100 again displayed its defensive attributes and navigated a week of mixed corporate earnings and macro uncertainties.

However, a second straight day of disappointing corporate updates dragged on the index despite mining companies putting in a solid shift at the top of the leaderboard.

“Banking and pharma stocks pulled the market down, led by HSBC amid talk of more job cuts. Reducing staff numbers typically yields a positive reaction from the market as the business is saving money, yet investors might fear HSBC isn’t going hard enough with trimming its bloated headcount,” said Russ Mould, investment director at AJ Bell. 

“NatWest also weighed on the FTSE as its results were solid rather than spectacular. The bank has been doing well, yet the market has already priced in that success. Investors were upset there wasn’t enough in the forward guidance to warrant large upgrades to earnings forecasts, so there was an element of profit-taking on the results.”

NatWest shares were down 2% at the time of writing while HSBC dropped 1%.

Antofagasta and Glencore were the top two risers after metals, including copper, rallied again overnight. Copper prices are 11% higher over the past month and 20% higher year-to-date.

Supply@ME Capital shares soared on Friday after the inventory monetisation platform announced the appointment of a new auditor.

Supply@ME Capital has appointed Bright Grahame Murray as its new auditor for the 2024 financial year, effective immediately. The appointment follows the resignation of the previous auditor, Crowe U.K., in September 2024, who resigned citing ‘risks’ of carrying out an audit of the company.

Shareholders will vote on Bright Grahame Murray’s re-appointment at the next Annual General Meeting.

The resignation of an auditor is, of course, a major red flag, and shares reacted accordingly when the resignation was announced last year. That said, the 150% rally in Supply@ME shares on Friday took the price back to around the same level they were before Crowe resigned.

SYME operates a fintech platform that provides Inventory Monetisation solutions to manufacturing and trading companies, helping them improve cash flow management. Supply@ME Capital reduced its operating losses by nearly 40% in the first half of 2024, reporting a loss of £1.4 million compared to £2.3 million in the same period last year. The improved performance stemmed from cost-cutting measures implemented in late 2023 and reduced corporate activity.

Nonetheless, the company reported negligible revenue during the period despite claiming a strong business pipeline.

NatWest shares have followed Barclays’ playbook, declining despite the FTSE 100 bank reporting broadly positive Q4 and full-year 2024 results.

Fourth-quarter 2024 earnings were reasonably good, with total income and profit before tax slightly exceeding expectations and net interest margin meeting estimates.

However, shares fell 2% as investors looked to 2025 and booked gains in the stock that has rallied over 100% since lows in October 2023. NatWest’s guidance for the coming year was in line with expectations, leaving investors with little reason to build on existing positions.

NatWest reported a 2024FY profit of £4.5 billion and earnings per share of 53.5 pence, marking a 12% increase from the previous year. The banking group achieved a return on tangible equity of 17.5%, demonstrating robust profitability.

The bank’s total income, excluding notable items, grew by £0.3 billion to £14.6 billion, representing a 2.2% increase compared to 2023. This growth was primarily driven by expanded deposit margins and increased lending activity. The net interest margin remained relatively stable at 2.13%, slightly higher than the previous year.

Given the economic uncertainty towards the end of 2024, investors will be more than happy with the bank’s performance.

In terms of lending and deposits, NatWest saw significant growth in its core business areas. Net loans to customers increased by £12.9 billion to £368.5 billion, with notable growth in both retail banking and commercial sectors. Customer deposits also showed healthy growth, rising by £12.2 billion to reach £431.3 billion.

The bank has also announced a final dividend of 15.5 pence per share, bringing the total dividend for 2024 to 21.5 pence, representing a 26% increase compared to 2023. Total capital distributions for the year amounted to £4.0 billion, reflecting the bank’s strong capital position and commitment to shareholder returns.

“NatWest caps off a strong year with a good set of fourth-quarter numbers that saw a slight beat on the profit line driven by higher non-interest income and better impairments,” explained Matt Britzman, senior equity analyst, Hargreaves Lansdown.

“There’s been a seismic sentiment shift over 2024, as the NatWest has moved on from its troubles at the helm and the UK banking environment has played out much better than some had feared. The setup for 2025 is one of cautious optimism, with borrowers remaining resilient, inflation in a more manageable place, and a UK economy that’s trying its hardest to squeeze out some growth.

“2025 could be the year NatWest finally sheds its government ties, with plans to return to full private ownership. After the UK government’s failed attempt to sell its stake earlier in 2024, this news will be a welcome development for investors who have long been waiting for the bank to regain its full independence.”

According to research by AJ Bell, the Lifetime ISA designed to help first-time buyers get on the property ladder is in danger of pricing buyers out of the market in 62 regions.

The wealth platform is urging the government to increase the limit on the price of a property a first-time buyer can use the ISA for from the current level of £450,000, which has remained in place since inception in 2027.

AJ Bell has calculated that to keep up with the increase in house prices, the limit for the Lifetime ISA should now be £575,000. By keeping the limit at £450,000, first-time buyers are at risk of the 25% penalty imposed for withdrawing cash from their Lifetime ISA.

Current rules also mean that if someone has used the ISA to invest in stocks, the government will also pocket 25% of the portfolio’s gains. AJ Bell also suggests that the penalty for withdrawing should be reduced to 20% from 25% to match the monetary value of the bonus provided by the product.

Rules mean that if someone placed £10,000 in the product and received the bonuses but then had to withdraw the cash, they would only be left with £9,375. The system is obviously broken.

It’s abundantly clear that the government needs to rethink rules around the product. The inaction and mismanagement of the product are punishing first-time buyers. If governed appropriately, a Lifetime ISA will support the lifeblood of the UK property market.

The government needs to drastically improve the UK investment landscape and encourage young investors to use products such as the Lifetime ISA, which is an obvious place to start. What the Labour Party does with the Lifetime ISA could be considered a barometer of their competency. It’s an easy fix that will have a big impact.

“It’s vital that Chancellor Rachel Reeves increases the maximum property value that people can buy using money held in a Lifetime ISA,” says Dan Coatsworth, investment analyst at AJ Bell.

“The government has frozen allowances on all types of ISAs until 2030. If the Lifetime ISA’s terms and conditions also remain frozen for another five years, flats in places like Ealing and Merton in outer London and terraced houses further afield in locations such as Winchester and Guildford will be deemed too expensive for first-time buyers to deploy funds from a Lifetime ISA without penalty because they are forecast to exceed the £450,000 limit. Even typical first-time buyer properties in the Cotswolds, South Oxfordshire and parts of Kent are projected to be in the penalty zone over the next five years.”

The FTSE 100 was sharply lower on Thursday as corporate updates from Barclays, Unilever and British American Tobacco disappointed, sending the index deep into the red in early trade.

This week, London’s leading index had shown remarkable resilience as traders contended with Donald Trump’s foreign policies and hot US inflation.

US stocks stuttered yesterday after US CPI came in hotter than expected and poured cold water on interest rates hopes. US CPI rose 3% in the year to January, only slightly higher than the 2.9% forecast by economists. The initial market reaction to such a slightly higher reading demonstrates just how much the market is concerned about the trajectory of US interest rates in 2025.

While the Bank of England and European Central Bank are shaping for a series of rate cuts through 2025, the strength of the US economy and stubbornly high inflation have some economists predicting a US rate hike by the Federal Reserve in 2025.

The perceived diverging paths of the West’s major central banks meant the wobble in US stocks wasn’t felt in the FTSE 100 due to the prospect of the pound remaining weak against the dollar and supporting London’s overseas earners. Indeed, the FTSE 100 hit a record high yesterday.

It was a very different story on Thursday.

Corporate earnings took centre stage and were met with rebuke by the market. Barclays, Unilever and British American Tobacco all posted disappointing earnings updates, and investors took flight.

British American Tobacco shares sank 8% as traditional cigarette volumes fell and growth in new products such as vapes slowed. A £6.2bn hit due to a Canadian lawsuit can also be attributed to the drop in shares.

“British American Tobacco’s full-year results delivered single digit growth in underlying revenue and operating profit to £25.9bn and £11.9bn even as more smokers kick the habit or switch to new categories such as vapes and heated tobacco,” said Derren Nathan, head of equity research, Hargreaves Lansdown

“Traditional combustible volumes fell by 5.2% but BATS managed to offset this through strong pricing and product mix. Revenue from New Categories grew faster at 8.9% but that’s lagging the high-octane rates seen in recent years. It’s going to have to take up more of the slack in years to come too as the noose tightens around cigarette smoking.”

BATS was the FTSE 100’s top faller, serving as a reality check that a company whose products are responsible for millions of premature deaths was rightly seeing slowing demand.

Barclays’ 5% drop was more a case of profit-taking than any major concerns with earnings. Q4 results were largely better than expected, and the investment bank unit had a positive period. The bank also set out plans for £10bn in share buyback love the next two years. Guidance was fairly uninspiring, which may have spurred some to book recent gains.

“The £1bn buyback taps into its strong capital position, and with £10bn expected to be returned to shareholders between 2024 and 2026, there’s enough on offer to keep markets happy,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.

“The only minor downside was the lack of guidance upgrades, but overall, investors should be pleased, with the immediate price reaction likely a result of the strong run up coming into results.”

Unilever shares tumbled after the CEO said slow growth in 2024 would continue and ‘remain soft in the first half of 2025’. The company said it would push forward with a triple listing of its ice cream in the Netherlands, UK and US, but this wasn;t enough to stop shares sinking 7% on Thursday.

“The market environment for consumer goods companies is tough,” explained Charlie Huggins, Fund Manager at Wealth Club.

“China’s economy is weakening, local competition in emerging markets is fierce and the high level of inflation in recent years means the appeal of private label brands has arguably never been greater. As a result, Unilever is pointing to a slower start to 2025.”

Barclays shares dropped in early trade on Thursday as investors booked recent gains for the bank following the announcement of Q4 and full-year 2024 results.

All in all, there was a lot to like in Barclay’s update. Profit was higher due to increased income and marginally lower costs. Impairments were fairly steady.

Net interest margins, a key indicator of profitability, rose to 4.28% in 2024 from 4.11% in 2023, excluding head office and investment bank activities. Given interest rates were expected to fall last year, the rise in net interest margins was a big win for the bank.

But all of this appears to have been baked into the Barclays share price cake, and the report offers little in the way of positivity about the outlook, and investors took the chance to bank gains, sending the stock down around 4%.

A further £1 billion share buyback and promise of £10 billion in share buybacks by 2027 was welcome news but failed to propel the stock higher. Perhaps investors were hoping for a little more from the bank.

“Early price action for Barclays looks a little harsh after the group set a decent benchmark for the banking sector, closing the year with an impressive final quarter as both its UK and Investment Banking arms delivered,” said HL’s Matt Britzman.

“Credit quality remains solid, with loan loss rates comfortably below target, and while there was a dip in the final quarter, stripping out the higher-risk business from the Tesco deal shows that credit performance actually improved. With more exposure to US consumer trends than most UK peers, stable US card default rates should also be reassuring for investors.”

Barclays’ Investment Bank is a big differentiator for the group when compared to the other FTSE 100 banks, and investors will be pleased to see 28% income growth in the unit during the fourth quarter.

“In Investment Banking, Barclays didn’t disappoint, surpassing profit expectations and seeing growth in fixed income and equities that outpaced even the US giants,” Britzman explained.

There will be a big focus on provisions for motor financing this banking earnings season, with investors quietly confident that the recent interventions by the UK government may result in better outcomes for the banks. Barclays wasn’t one of the most heavily involved banks, but it still made provisions for any potential redress.

“On motor finance, the bank set aside £90m in provisions, and with players like Close Brothers maintaining optimism, there’s growing hope that the impact won’t be as severe as first feared – Lloyds will be the key one to watch and the most exposed from the major UK banks,” Britzman said.