Key Takeaways
- UK Q1 GDP grew 0.6%, meeting expectations, while a surprise 0.3% expansion in March defied forecasts of a contraction.
- Burberry (BRBY) reported a 5% increase in Q4 retail comparable sales, bolstered by a 10% surge in Greater China.
- The U.S. government approved Nvidia (NVDA) to export its advanced H200 AI chips to approximately 10 Chinese firms, including Alibaba (BABA) and Tencent (TCEHY).
- Geopolitical tensions remain high as the Israeli army ordered evacuations in southern Lebanon and Ukraine's anti-corruption court ordered the arrest of Andriy Yermak.
- President Xi and Donald Trump held high-stakes talks in Beijing covering the Middle East, Ukraine, and the Korean Peninsula.
UK Economy Shows Resilience Amid Trade Headwinds
The United Kingdom’s economy expanded by 0.6% in the first quarter of 2026, matching analyst estimates and improving upon the 0.2% growth seen in the previous quarter. The services sector (+0.8%) and construction (+0.4%) were the primary drivers of growth during the three-month period. Economists noted that the data suggests the UK is weathering global energy price volatility better than initially feared.
Monthly data for March provided a significant upside surprise, with GDP rising 0.3% against expectations of a 0.1% decline. This growth was fueled by a 1.5% surge in construction output and a 1.2% jump in manufacturing production. However, the visible trade balance widened to -£27.22 billion, significantly higher than the previous -£18.79 billion, indicating persistent pressure on the country's trade position.
Burberry Returns to Growth with New Leadership
Burberry (BRBY) shares are in focus after the luxury house reported that Q4 retail comparable sales rose 5%, beating the 4.6% estimate. Performance was particularly strong in Greater China, where sales jumped 10%, far exceeding the 7.38% growth anticipated by analysts. The results signal a potential turning point for the brand as it navigates a broader slowdown in the global luxury market.
The company also announced a major leadership transition, naming William Jackson as Chair to succeed the retiring Gerry Murphy. For the full year, Burberry reported revenue of £2.42 billion and an adjusted operating profit of £160 million, which topped the £153.6 million consensus. Investors are closely watching whether the new chair will accelerate the "Burberry Forward" transformation program to sustain this momentum.
US-China Tech Thaw: Nvidia H200 Approvals
In a significant shift for the semiconductor industry, the U.S. has reportedly approved approximately 10 Chinese firms to purchase Nvidia (NVDA) H200 chips. Approved buyers include tech giants Alibaba (BABA), ByteDance, and Tencent (TCEHY), alongside distributors such as Lenovo (LNVGY) and Foxconn (HNHPF). This move suggests a strategic recalibration of export controls to allow for limited high-tech trade under strict conditions.
This development coincided with a summit between President Xi Jinping and Donald Trump in Beijing. Xi emphasized that "equal dialogue and consultation" is the only viable approach for bilateral ties, noting that trade relations deliver mutual gains. The leaders also discussed regional crises, including the situations in the Middle East and Ukraine, as they sought to preserve the "good momentum" in recent relations.
Geopolitical Volatility: Middle East and Ukraine
Regional instability continues to weigh on global sentiment as the Israeli army ordered residents of eight locations in southern Lebanon and the Bekaa area to evacuate. This move precedes expected military action and follows a period of heightened cross-border friction. Meanwhile, Iran’s foreign minister, Abbas Araghchi, called on BRICS members to unanimously condemn U.S. and Israeli "aggression" during a meeting in New Delhi.
In Eastern Europe, Ukraine’s political landscape was shaken as an anti-corruption court ordered the arrest of Andriy Yermak, the former chief of staff to President Zelenskiy, on money laundering charges. This domestic turmoil comes as Russia reportedly launched over 1,560 drones in a single overnight barrage. The arrest of such a high-profile figure may complicate Kyiv's internal stability even as it faces intensified military pressure from Moscow.
Corporate and Political Briefs
- Siemens AG (SIE): Barclays increased its target price for the industrial giant to €230 from €220, citing improved outlooks in automation.
- UK Politics: Sources indicate that Wes Streeting maintains "rock solid" support numbers within the party, despite recent rumors of a leadership challenge.
- Global Trade: India’s foreign minister emphasized that unimpeded shipping through the Strait of Hormuz and the Red Sea remains "crucial for the global economy."
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.