The FTSE 100 started the week firmly in the red after marathon European elections ended with the announcement of a snap election by the French President who suffered crushing losses to the far-right.

There was a broad increase in support for far-right parties pushing anti-immigration agendas in the European elections, but the centre managed to hang on and retain command of the parliament.

The elections will be a warning to incumbent European political leaders, but the actual results produced little market-moving developments. The biggest shock was Emmanuel Macron’s gamble to call snap elections in an attempt to quell the threat posed to his authority by far-right leader Marine Le Pen. Le Pen’s National Rally party received around 31% of the vote – more than double the votes Macron’s pro-European centrist party.

The snap elections in France won’t unseat Macron himself, and he will continue to be able to rule by presidential decree. The risks stem from a wider leaning towards nationalist parties across Europe that poses a threat to the European project.

This risk was evident in European stocks on Monday, and the FTSE 100 opened up sharply lower with the German DAX and French CAC. The FTSE 100 was down 0.42% at the time of writing.

“Political turmoil in Europe saw the FTSE 100 start the week on the back foot with only a handful of names on the index trading in positive territory,” said AJ Bell investment director Russ Mould.

“An unexpectedly strong showing for far-right parties in European elections in France prompted President Emmanuel Macron to call a snap parliamentary election to be held within the next 30 days. This injects a big dose of the uncertainty which markets hate – with the euro dropping sharply in response to the developments.

“Financial stocks were among the worst performers in London as investors digested the news. Also affecting sentiment were Friday’s better-than-expected US jobs numbers which push back against the narrative that rate cuts are imminent.”

Ashtead

In stock-specific news, Ashtead opened on reports the plant hire company was exploring shifting its primary listing to the US. The move would follow in the footsteps of construction company CRH, who recently ditched London for New York, so the news isn’t a major surprise. However, it will be a major disappointment given the string returns the company has provided investors over the years.

“Ashtead is the twenty-fifth biggest company in the FTSE 100, as measured by its stock market valuation of £24.5 billion, so no-one will want to see the company switch its listing to New York, especially as the firm is just one of eighteen in the UK’s elite index that can point to a record of growing its dividend every year for at least a decade,” says Russ Mould.

“If there is any consolation for the London Stock Exchange, and investors in the UK equity market, Ashtead is unlikely to be leaving because its shares are too cheap relative to its US-quoted peers and rivals for reasons that relate directly to the business rather than optics or the share price.”

Suggesting that Warpaint London (LON:W7L) is a great success story of British enterprise, analysts Darren Shirley and Clive Black at Shore Capital recently upgraded their current year forecasts by some 26% to look for adjusted pre-tax growth to £23.3m, generating 22.6p of earnings per share.

Warpaint sells branded cosmetics, its W7 brand is sold in the UK primarily to major retailers and internationally to local distributors or retail chains.

While Technic, the group’s other main brand, is sold in the UK and continental Europe with a significant focus on the gifting market, principally for high street retailers and supermarkets.

Looking For Strong Multi-Year Growth

The brokers suggest that Warpaint is in the foothills for growth, such foothills have a considerable distance to traverse, and they believe that strong multi-year growth beckons.

Their estimates for the year to end December 2025 are for £116.5m sales, adjusted pre-tax profits of £26.6m, with earnings of 25.8p and a 12.9p dividend per share.

Buy On Any Dips

In late April I wrote that patient investors in Warpaint should look to buy on any dips in the price, and that by doing so they will be onto a winner.

The shares were then 465p and fell back to 455p after news that the group’s CEO and Managing Director were sellers of 3.5m shares a piece, some 9.06% of the equity, ‘in response to strong investor demand’ and wanting to increase the freefloat of its stock and broadening the shareholder register.

Following the Placing at 450p a share, Samuel Bazini, CEO, and Eoin Macleod, MD, were each left with 15.95m shares, representing 20.64% each of the equity.

Share Price Strength Subsequent To Placing

That Placing was substantially oversubscribed and was strongly supported by existing and many new institutional investors.

The group’s shares have been on a gradual ascent since then, topping out at 550p late last week – showing a near-21% gain since the Placing.

The company is due to announce its H1 Trading Update this week.

On Monday, Chemring Group announced a significant long-term agreement between its Norwegian subsidiary, Chemring Nobel, and American aerospace and defense giant Northrop Grumman.

The 15-year partnering deal secures Chemring Nobel as a supplier of HMX, a powerful energetic material used in missile propellants, to Northrop Grumman’s missile programs.

Alongside the 15-year partnership, Northrop Grumman has also placed an $83 million delivery order with Chemring Nobel for HMX supplies. Deliveries under this order will commence in fiscal year 2026 and continue over the following three years. All production will take place at Chemring Nobel’s facility located in Sӕtre, Norway.

“These awards, which illustrate the long-term and valued relationship that we enjoy with Northrop Grumman, support our decision to invest in increasing the capacity of our three energetics businesses over the medium-term, and reinforces Chemring’s position as a key supplier to NATO,” said Michael Ord, Chief Executive of Chemring.

Just four weeks ago the shares of Adriatic Metals (LON:ADT1) were trading at 253p, by the middle of last week they had fallen back to 196p, before closing on Friday night at a slightly improved 203p.

From this level, market analysts are said to be looking for a recovery back to and then above the 253.50p at which they peaked on 21^st May.

The £658m-capitalised Cheltenham-based precious and base metals mining group is the owner of the Vares Silver Operation, which covers a 44sq.km area in Bosnia and Herzegovinia.

It also owns the Raska Zinc-Silver Project in Serbia.

Vares Silver Operation

The world-class Vares site is gaining most investor attention, it contains two advanced exploration deposits, Veovaca and Rupice, which have previously been mined for Lead, Zinc and Barite.   

The company’s exploration programme is focused on the northern and southern extremities of Rupice. 

At the end of May, the company announced that it had agreed a sale of on-specification grade concentrates from Vares.

Currently, it produces high-quality concentrates, with silver content exceeding 2,500g/t and nearly 50% zinc.

It dispatched the first shipment of ore concentrate from the Vares processing plant to the port of Ploče, officially initiating the first sales contract for the concentrate and securing the first million-dollar payment from international buyers.

The company has rapidly achieved significant success with the first shipment of concentrate from the Vareš mine, less than three months after starting production.

Noteworthy too was that it has also reconstructed the railway line connecting Vares with the port of Ploče, enabling ore transport to smelters in Belgium, Norway, Sweden, Spain, and Italy.

With increasing feed tonnage of development ore available, the processing plant will now transition to 24-hour operations in anticipation of first stopes in July.

The company is continuing to ramp up production, with nameplate capacity expected in the final quarter of this year.

CEO Paul Cronin stated that:

“The production of saleable concentrates from the Vares Silver Operation represents a major milestone for the Company and I am very pleased with the progress made by the processing team with the plant producing concentrates with recoveries as expected.

High silver, gold and zinc prices and low treatment charges due to a tight concentrate market are providing positive tailwinds for Adriatic’s free cash flow generation, as we progress towards full production capacity in Q4 of this year.”

Recent $50m Placing

At the same time in late May, Adriatic announced a $50m institutional placement of stock, with the fresh funds expected to boost the company’s balance sheet as it continues to progress the ramp-up and building upon of recent milestones, such as the production of the first saleable concentrate, and then further towards delivering on its mine plan.

Market analysts have Price Objectives of around 300p on the group’s shares.

The FTSE 100 sank with global equities on Friday after US Non-Farm Payrolls provided a much stronger snapshot of the UK economy than investors had been expecting.

Non-farm payrolls rose by a whopping 272,000 jobs, much stronger than the expected 180,000. Such a strong beat in jobs added is great news for the US economy but terrible news for stocks.

The bumper Non-Farm Payrolls report effectively closes the door on a rate cut by the Federal Reserve next week and throws doubt over when the Federal Reserve will eventually cuts rates.

The big risk for the Federal Reserve is easing too quickly and leaving themselves vulnerable to a slowdown in the US economy. Easing borrowing costs when the economy is still humming will erode the impact of further rate cuts if and when the economy slows. This risk of cutting rates too early is the reason why financial markets are no longer pricing a 100% chance of a US interest rate cut in 2024.

Attention will shift to the US CPI reading due for release on Wednesday for further insight into the Fed’s next move. Should we see an inflation reading higher than expected, equities could come under real pressure.

“FOMC members continue, unsurprisingly, to place greater weight on the inflation side of the dual mandate, and are likely to reiterate next week that they are yet to obtain the ‘confidence’ being sought on a return towards the 2% target to enable the first rate cut to be delivered,” said Michael Brown, Senior Research Strategist at Pepperstone.

“As such, the May CPI report, also due next Wednesday, is likely to be a much more significant event, particularly after the core CPI metric fell, on an annual basis, to a near 3-year low in April.”

The prospect of few or no rate cuts in 2024 has sent equities into a tailspin and bond yields soaring. US futures were down heavily and the FTSE 100 fell in sympathy.

The FTSE 100 was trading negatively before the jobs data was released at 1.30pm and losses accelerated as the news hit the wires. The selloff was broad with 89 of the FTSE 100 constituents trading negatively at the time of writing.

Miners were the worst hit, with Fresnillo falling 4% and copper miner Antofagasta dropping 3.4%. JD Sports felt the pressure of higher borrowing costs for longer and fell 3%. Ocado never misses out on a big move and was down 2.5% after earlier this week it was confirmed they will be removed from the index in upcoming reshuffle.

Utilities companies were among the few companies trading in positive territory