FTSE 100 higher on Anglo gains, while markets await US GDP release

• Anglo American helps drive the FTSE 100 higher
• Gfk survey provides encouragement for the German economy
• US GDP in view as Meta decline looks to hit US markets at the open

The FTSE 100 has continued its push higher, with the UK index reaching a fresh record high for the third consecutive session. The gains seen in early trade have been primarily driven by the outperformance of big hitters Unilever (5%), AstraZeneca (5%), and Anglo American (12%), with the vast majority of the index failing to follow suit thus far. Notably, the approach from BHP Group to buy out Anglo American does provide a surprising boost for the downbeat mining giant whose share price had slipped 48% over the past two years. A successful takeover would form the worlds biggest copper miner, but strips the FTSE of one of its heavyweight mining firms. Nonetheless, UK investors will be relieved to see this potential takeover taking place within UK listed firms after a trend of approaches from US businesses seeking to drive growth by buying undervalued UK-listed stocks.

The German economy provided its third reason to be optimistic today, with the Gfk consumer climate indicator rising to a two-year high of -24.2 for May. Coming hot off the heels of a better-than-expected composite PMI (driven by services) and Ifo business climate survey, the German economy has seemingly start to show signs of turning a corner. Coming ahead of an expected ECB rate cut in just six-weeks, the prospect of an upturn in economic growth at the same time as a monetary pivot highlights the bullish case for European stocks.

Looking ahead, markets will be hotly anticipating the US open given the predicted 12% decline for tech giant Meta. This highlights how pre-release performance and the company’s outlook are often more important than the numbers themselves, with the Meta share price slumping despite beating on both top and bottom line. All eyes turn towards Microsoft and Alphabet whose numbers are released after the close today. On the economic front, we are waiting patiently for today’s US GDP release, with the GDPNow estimate of 2.7% highlighting the potential for an upwards surprise given the 2.5% expected by the markets. With that in mind, traders should be well aware of the risks associated with higher-than-expected GDP and core PCE figures, which could provide a fresh bout of selling pressure for US markets.