🌟 Calm On The Surface, Busy Underneath
It’s been a cautious week. Stocks have mostly finished higher, but traders spent much of the week waiting on the key U.S. jobs report and tariff‑related legal news, reflecting underlying uncertainty. In the UK, the FTSE 100 briefly flirted with all‑time highs before pulling back, while sterling weakened as markets await next week’s UK GDP data and labour indicators.
📈 Weekly Scoreboard
The “January Effect” is in full swing with major indices hitting fresh record highs.
| Index | Weekly Change (%) | Current Level |
| FTSE 100 (UK Large Cap) | +1.74% | 10,124.60 |
| S&P 500 (US Wide) | +1.57% | 6,973.88 |
| Nasdaq Composite (US Tech) | +1.87% | 23,667.66 |
| EURO STOXX 50 (Europe) | +1.58% | 5,997.47 |
| Nikkei 225 (Japan) | +1.61% | 51,939.89 |
| MSCI Emerging Markets | +0.80% | 1,048.50 |
| China (SSE Composite) | -0.15% | 2,955.00 |
🌍 Global Drivers & Macro
Why the sudden surge to record levels? The market found the perfect mix of news this week.
- US Jobs “Goldilocks” Report: Friday’s US jobs data was just right—strong enough to show the economy is healthy, but not so hot that it sparks inflation fears. This reinforced the “soft landing” narrative that investors love.
- Merger Mania: Big deal rumours returned to the table, particularly in the mining sector. When companies start buying each other, it signals that boardrooms are confident about the future, which usually encourages individual investors to follow suit.
- Tech & AI Momentum: The AI trade isn’t slowing down. With the Nasdaq pushing to new highs, money continues to pour into technology, pulling the broader US market up with it.
- Oil Supply Dynamics: Oil prices edged higher amid continued supply concerns, though energy stocks in the UK lagged this week.
🇬🇧 UK Corner
This was a landmark week for the UK market.
- The 10,000 Milestone: The FTSE 100 crossing 10,000 is a massive psychological win. It draws media attention and can bring retail investors back into the fold. The rally was broad-based, but heavily supported by the mining and energy giants.
- Mining Mega-Merger Rumours: Reports of potential consolidation in the mining sector (Glencore/Rio Tinto speculation) lit a fire under the FTSE’s biggest constituents. Since miners make up a huge chunk of the UK index, when they fly, the FTSE flies.
- Retailers Hold Up: Continued positive digestion of Christmas trading updates helped steady the domestic side of the market, proving the UK consumer is more resilient than the pessimists feared.
- Sterling Weakness: Sterling is set for a weekly decline as markets await sharper UK economic data, including GDP and jobs figures.
🏦 Asset Movers
- FX: GBP/USD ($1.285): The pound softened against the dollar this week, pressured by weak UK data anticipation and firmer U.S. macro expectations.
- Commodities: Oil & Gold: Oil ticked up slightly on geopolitical murmurs but remains in a range that supports economic growth. Gold remains popular as a diversification tool, even as stocks rally.
📰 Key Headlines
- (Reuters) FTSE 100 enters new era, closing above 10,000 points for the first time in history on wave of mining strength.
- (Bloomberg) Glencore and Rio Tinto shares surged on speculation of potential deal talks, sparking a rally across the entire basic materials sector.
- (BBC Business) US Non-Farm Payrolls data showed steady hiring, calming fears of a recession in the world’s largest economy.
- (FT) Sainsbury’s shares dipped despite reasonable sales, as investors rotated money into higher-growth mining and tech stocks.
- (CNBC) Samsung signalled a robust recovery in chip demand, adding fuel to the global tech rally ahead of earnings season.
📑 Companies reporting
- Tesco (TSCO): Solid numbers were well-received, but the share price move was overshadowed by the mining frenzy.
- Sainsbury’s (SBRY): Shares struggled slightly as the market nit-picked the details of their general merchandise performance, despite decent food sales.
- Next plc (NXT): Continue to impress with guidance upgrades, cementing their reputation as the best-in-class high street operator.
- US banks (JPMorgan Chase, Bank of America, Citigroup, Wells Fargo): The big US banks kicked off earnings season, with results generally showing resilient profits but cautious outlooks on loan growth and credit quality, prompting swings in their share prices intraday.
⚖️ Investor Sentiment Dashboard
Volatility, measured by the VIX, remained in the mid-teens, a level that usually signals a fairly calm equity market rather than outright fear. The latest AAII survey showed bullish sentiment comfortably above its long-run average and bearish sentiment below average, pointing to ongoing optimism among US individual investors. The CNN Fear and Greed Index sat in the neutral-to-slight-greed zone around the low‑50s, suggesting investors are reasonably confident but not stretched.
Taken together, these indicators point to a moderate Risk-On backdrop – investors are generally willing to hold shares, but there is still some caution in the air rather than full-blown excitement. Fund flow data show steady inflows into global equity and money market funds, with some rotation from defensive bond funds into broad equity trackers and large-cap growth strategies. For DIY investors, this kind of environment often rewards staying invested and diversified rather than trying to time every wiggle in sentiment.
📅 Next Week’s Radar
Can the momentum hold? Here is what to watch:
- Mon 12 Jan – China trade data (early morning): A key check on global demand and supply-chain health, with knock‑on effects for commodities and exporters.
- Tue 13 Jan – US inflation (13:30): A major input into Fed thinking; a surprise higher or lower could quickly move bond yields, the dollar and growth shares.
- Thu 15 Jan – UK monthly GDP for November (07:00): An important read on whether the UK is slipping toward recession or just grinding along at low growth.
- Fri 16 Jan – US big bank earnings (pre‑market): Further results from major US financials will offer clues about credit trends, deal activity and the health of corporate borrowers.
⚡ The Final Take
Enjoy the milestone! Seeing the FTSE 100 start with a “10” is a moment many have waited years for. The trends are strong, the mood is buoyant, and for now, the path of least resistance is higher. Have a great weekend.
© Clearly Investments Ltd. Educational information only. This is not investment advice.
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