FTSE 100 Ends The Week A Strong Note But Outperformed By the 250 Index

London stocks regained some of the lost ground over the week on Friday, with the FTSE 100 ending up 0.54%. Despite the increase in the benchmark FTSE 100 index, performance on the week remained in red territory, with a loss of 0.77%. Having hit new all time highs as recently as two weeks ago, the shift in sentiment comes as attention swings to US economic data.

The release of the US personal consumption expenditures (PCE) data, contained few clues about consumer behaviour and potential signals for future monetary policy. With the preferred Core PCE inflation measure of the Fed showing an increase of 0.3% from last month, and 2.8% YoY, broadly in line with estimates, there is little indication of a rate reduction looming.

Amid a backdrop of diverse economic indicators, Bank of England data revealed that net consumer credit saw a meagre rise of £0.73 billion in April, undershooting expectations, and suggesting that consumers may be tightening their belts. This compares with £1.42bn in March and is likely a cause of higher borrowing costs and interest rates. Subsequently, mortgage approvals disappointed, indicating a cooling in the housing market—a focal point for assessing economic health in the United Kingdom.

Contrastingly, Nationwide painted a more positive picture of the UK housing market, reporting that house prices had resumed growth in May. The increase of 0.4% since April and 1.3% year-on-year offers a glimmer of resilience in the property market amid broader economic uncertainties.

Retail sector data cast a shadow, with UK retail footfall shrinking by 3.6% in May. While this marked an improvement from April's 7.2% decline, it underscored the pressures facing the sector, with all shopping location types recording a dip in visits. This data provides a window into the current challenges and changing habits within the UK retail landscape.

Turning to individual stock performances within the FTSE 100, National Grid emerged as one of the top risers, as JD Sports , Associated British Foods, and Flutter Entertainment faced setbacks.

The FTSE 250 index (^FTMC) also managed to end the week on a positive note, up 0.29% through Friday's session, and outperforming the 100 on the week; delivering a 0.48% gain. Over the month of May, the FTSE 250 has added a 4.03% against the FTSE 100's 1.9%, showing a shift back to favour for the broader UK index against the benchmark. As we move in to the month of June, it is time to see if the fabled “sell in May and go and away” mantra will hold any weight in 2024.