FTSE 100 opens lower, tracking Wall Street

Energy prices continued to fall yesterday on concerns over US demand after the country posted a lower-than-expected GDP growth in the first quarter. This weighed on oil majors and the FTSE 100, although it managed to finish the day up 0.2% thanks to good earnings reports including TI Fluid Systems, which climbed 14.6% after reporting strong sales growth. Pearson bounced back 10% after falling 14% on Tuesday when US peer Chegg warned about competition from artificial intelligence in the online education sector.

The FTSE 100 opened 0.2% lower today after a lower close on Wall Street, after the U.S. Federal Reserve raised interest rates by 25 basis points. It also signaled that this could be the last one in this rate hike cycle, although inflation remains a concern.

The European Central Bank is also expected to raise rates later today, by 25, and perhaps 50 basis points.

Miners are underperforming due to fears about the US economy and weaker-than-expected demand recovery in China.

Oil is regaining some ground, boosting Shell, which just posted a better-than-expected first-quarter net income.

In other news, global funds network Calastone said that UK investors bought equity funds in April at the fastest pace since May 2021 - they added a net £1.41 billion in new capital to their holdings during the month. UK funds continue to suffer very significant outflows: the big switch to international funds continues apace”, it said.

Things to read today:

Sovereign Debt Costs to Double by 2025 as Rates Rise, Says Janus (Bloomberg)

Warren Buffet’s “Secret Sauce” Involves One of Investing’s Most Basic Strategies (WSJ)

The Fed: no secrets, no promises (Financial Times)