There may be plenty of gloomy headlines out there, but the markets continue to climb the wall of worry. The FTSE 100 and other European indices followed from Friday’s gains on Wall Street and positive trading in Asia earlier on Monday.
AJ Bell investment director Russ Mould said: “The FTSE 100 briefly touched four-year highs as the trading week got away – a significant milestone and some way above where it was in the weeks before the pandemic hit in 2020.
“Although US jobs figures came in above expectations at the end of last week, suggesting the labour market is still tight, investors seem to have focused on wage growth coming in slightly below what had been pencilled in. From their perspective that might prompt the Fed to slow its rate rises, hence the positive market reaction to the figures.
“Further easing of China’s Covid measures, despite surging cases in the country, have also helped create a happier mood. However, sentiment still feels as fragile as a teacup and US inflation numbers on Thursday could provide a key test for investor confidence.
“Lidl’s bumper Christmas trading figures suggest the trading down trend is alive and well in the UK and could put pressure on the big four supermarkets – Tesco, Sainsbury’s, Morrisons and Asda – as well as the higher end grocers like Waitrose and Marks & Spencer to offer even more value propositions on their shelves.”