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Good morning. Today we're talking about the FTSE 100 hitting a new record, a mining mega merger and US tech firms’ strong quarter.

Big Stories

FTSE hits new record

The FTSE 100 closed at a record high of 8,139.83, its first time breaching 8,000 in 14 months. However, this doesn't necessarily reflect a booming UK economy. The weak pound is the primary driver, inflating the value of multinational companies' overseas earnings. In reality, the FTSE 100 still lags behind its historical peak when measured in US dollars. Furthermore, UK stock market growth pales in comparison to the US market, which has surged over 240% since the dot-com era, compared to the FTSE's 16% gain. Despite these caveats, some positive signs are emerging. Hopes for interest rate cuts and a stabilising UK economy are buoying investor sentiment. Slower inflation and a return to growth provide further optimism. The Bank of England may become the first major central bank to lower interest rates, potentially unlocking further gains for the FTSE 100.

Mining mega merger

Anglo American has rejected a takeover proposal from mining giant BHP, deeming it significantly undervalued. This potential deal, valued at £31.1bn, would be the largest shake up in the mining sector in a decade. BHP, the world's top miner, is particularly interested in Anglo’s copper mines in South America. Copper is used to conduct electricity and demand is growing as countries shift to renewable energy and electric vehicles. The offer comes after a difficult year for Anglo, marked by product price drops and operational challenges that slashed production targets, most recently in the sharp downturn in the diamond market which has hit its De Beers unit.

Tech titans triumph

Stocks in US tech firms surged after posting stellar first quarter results. Google-owner Alphabet reported better-than-expected earnings driven by strong profits in its cloud division and announced a first-ever dividend and a $70bn share buyback. Microsoft also beat forecasts on strong cloud service growth. Microsoft and Alphabet credited booming AI demand for exceeding expectations. Snap shares soared after it topped estimates and impressed investors with its 422m global daily active users. The social media company’s results suggest its digital advertising revamp is paying off, potentially increasing competition with Google and Facebook-owner Meta.

Elsewhere...

Crisis talks: The chancellor is holding a summit aimed at enticing more companies to London's stock market amid an exodus of businesses from the capital.

Surprise visit: Elon Musk travelled to Beijing for a surprise visit where he was expected to push Chinese officials to approve Tesla’s Full Self-Driving software.

Social media ban: ByteDance, the China-based owner of TikTok, said it doesn't have plans to sell the company in the wake of a new law that requires it either to divest ownership or face a US ban.

Troubled waters: The water regulator is working on rescue plans for Thames Water that could see its operations dismantled and sold off as piecemeal to rival suppliers.

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Number of the Day

98.6%

The reduction in size of Saudi Arabia’s 105-mile-long mirror-clad desert metropolis called the Line. The project, which had been slated to cost $1.5tn, was pitched as a reinvention of urban design.

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