The sharp sell-off in gold over the past few days has encouraged investors to buy on the dip, scooping up the precious metal in their droves and making it sparkle again.
Gold has delivered such strong rewards to investors over the past year that many people will have treated the recent sell-off as a New Year’s sale, a chance to grab more metal at a discounted price. Gold bugs have doubled down rather than run for the hills.
Positive investor sentiment also extended to equity markets with all the major indices in Asia and Europe pushing higher. This included a dramatic 3.9% rally from the Nikkei in Japan as investors loaded up on financial, tech and industrial stocks. Japan is going to the polls this weekend and investors are hopeful for a more stable political backdrop in the country and policies that will drive the economy.
The FTSE 100 was driven by a risk-on mentality as miners led the index higher, banishing the commodity blues that depressed the start of the trading week.
A trade deal between the US and India helped the market mood, raising hopes for other countries still in the queue to find a resolution to tariff pressures bestowed upon them by the Trump administration. India has been a rich source of returns for investors over the past few decades, but Trump’s tariff regime stalled momentum in the Sensex index. Investors will now be wondering if the trade deal effectively removes the shackles on the market and breathes new life into it, rather than simply resulting in a short-term relief rally.
The new trade deal certainly provides more clarity, hence today’s jump in the Sensex. UK-listed investment trusts with exposure to India were among the biggest risers on the FTSE 250, including a 5.6% advance from Ashoka India.
SpaceX / xAI
It turns out reports Elon Musk was looking to consolidate his corporate empire were well founded – with the confirmation SpaceX is taking over the xAI business.
This Musk venture encompasses Grok and the X social media platform. Reporting suggests the transaction values SpaceX at $1 trillion and xAI at $125 billion – though given the nature of the deal these feel like nominal sums.
Speculation about a further combination with Tesla to build an effective MuskCorp, which could remove the need for a SpaceX IPO, has also been bubbling away even if it looks like plans for the latter’s launch on the stock market are well advanced.
For all the grand talk of creating an ‘innovation engine’ and engaging in space-based AI, some investors may feel the xAI deal affects the prospective appeal of SpaceX. The real moneymaker for this business is the Starlink satellite internet business rather than the higher profile space rocket arm.
The ownership of xAI, as well as further diluting exposure to Starlink, could be seen as exposing SpaceX to negative headlines and regulatory action given the recent controversies around Grok being used to create inappropriate images.
Others may buy into Musk’s grand vision of data centres in the cosmos, and this may only whet the appetite ahead of what could be the largest IPO of all time.
AG Barr
Dry January may be over but people’s thirst for posh soft drinks when they are not boozing is a longer-term trend and one which AG Barr is looking to tap into with its latest deals.
Barr may be best known for Scotland’s favourite fizzy beverage – Irn-Bru – but it has a much broader portfolio of drinks brands which have been further augmented through the acquisition of premium juice outfit Frobishers and fancy cola and ginger beer maker Fentimans.
Barr is making these transactions from a position of strength, comfortably funding them thanks to a strong balance sheet and having reported a resilient full-year performance in its pre-close trading update.
Given external cost pressures, investors will be pleased by the tick higher in adjusted operating margin and revenue growth in line with expectations.
Barr’s improved profitability demonstrates the efficiencies made by the company and investments to improve its supply chain are paying off.
Russ Mould: Investment Director
Russ Mould is AJ Bell's Investment Director. He has a Master's degree in Modern History from the University of Oxford and more than 30 years' experience of the capital markets.
He started out at Scottish...
