FTSE higher after progress on US debt ceiling, UK consumer confidence improves and Smiths Group lifts guidance

“The markets continue in a holding pattern with the FTSE 100 stuck in a tight range between 7,700 and 7,800 as investors await key economic data which could set equities on a path up or down,” says AJ Bell Investment Director Russ Mould.

“Today was a positive day for UK stocks despite warnings overnight from a Federal Reserve official that the end to the rate-hiking cycle might not come as soon as Wall Street hopes.

“Investors will be hunting for clues on the direction of monetary policy from Fed chair Jerome Powell when he addresses a conference in Washington later on Friday.

“Next week is busy with a raft of PMI data from both sides of the Atlantic, minutes from the Fed’s latest meeting and key inflation data. This could help break the current stasis in markets as we head towards the summer.

“Focus is likely to be drawn to the debt ceiling crisis as the beginning of June deadline approaches – the mood music appears to be improving a touch, though given the toxic political environment in the US that’s not saying a lot.

“UK consumer confidence continues to be impressively resilient, good news for retail, travel and hospitality stocks, with the reading improving for the fourth month in a row. If inflation starts to retreat from double-digit highs that improvement may become more material.

“The £1 billion committed to developing the domestic semiconductor industry in the UK looks like pocket change compared with the $50 billion and €43 billion recently committed by the US and EU respectively.

“Industrial technology firm Smiths Group impressed as it lifted its guidance after a strong third quarter. Organic revenue growth of 13.4% is no mean feat in the current environment and, crucially, the improvement is being driven by growth in both volumes and prices.”

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