FTSE edges higher ahead of holiday weekend
Fiona Cincotta May 7, 2020 10:13 AM
Although the Bank of England told us yesterday that the UK economy will fall around 14% this year the FTSE opened on a surprisingly positive note, boosted by the prospect of the country beginning to reopen in some shape or form from next week.
Although the Bank of England told us yesterday that the UK economy will fall around 14% this year the FTSE opened on a surprisingly positive note, boosted by the prospect of the country beginning to reopen in some shape or form from next week. Hopes of a return to normal outweighed the BoE’s words of warning, projecting that unemployment could rise to 8% this year while the consumer price index drops to 0.6% with no recovery in sight until some point in 2021.
The UK housing market has ground to a standstill during the corona lockdown with houses losing on average 0.6% in value last month. But with some form of reopening from next week investors are beginning to buy into property firms such as Rightmove, betting that the housing market has seen the low for this year. Firms that depend on the footfall on the high street also traded higher this morning including JD Sports Fashion, Primark owner Associated British Foods and betting chain Flutter Entertainment.
BT’s decision to forsake dividend payments this year triggered a backlash from investors and the stock dropped 8.5%. The telecoms giant is not only trying to cut outgoings because of the pandemic but also wants to preserve cash to be able to invest into 5G and fibreoptic networks.
Crude oil rallies 14% on the week
After the heavy selloff in the previous weeks, crude oil prices stabilised, allowing the Brent crude contract to regain 14% this week as it traded mid contract, that is, sufficiently removed from the next contract expiry date. However, the largest drops happened recently around the 22nd of the month, when the WTI contract expires, so next week could see a renewed slide in oil prices.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.