FTSE Extends Winning Streak As No Deal Brexit Taken Off the Table
Fiona Cincotta March 14, 2019 4:00 PM
The FTSE extended its winning streak into a fourth session. Financials cheered the House of Commons voting to take a no deal Brexit off the table, whilst oils majors rallied on the back of stronger oil prices.
The FTSE extended its winning streak into a fourth session. Financials cheered the House of Commons voting to take a no deal Brexit off the table, whilst oils majors rallied on the back of stronger oil prices. The pound easing off 9-month highs, reached in the previous session, also offered support to the FTSE.
Pound lower ahead of tonight’s vote
The pound traded lower on Thursday, ahead of a third vote in Parliament this evening and after Labour failed to back a second referendum amendment. The pound fell back to $1.32 as hopes over a second referendum were reined in.
Dax struggles on German economy woes
The Dax was a noticeable laggard within Europe, with investors unable to shake off growing concerns over the health of the German economy. German industrial production figures earlier in the week disappointed and today, German inflation also surprised to the downside, ticking lower to 1.4%. Rather than anomalies, softer data is becoming a trend for Germany as more evidence points to slowing growth.
The German economy is reliant on its manufacturing sector and strong exports, areas which are being undermined by slowing global growth, trade wars and Brexit uncertainty. Added to that the faltering German car industry and it becomes quite clear why the IFO downgraded German economic growth for this year to just 0.6% from 1.1%.
Wall Street opens down
Wall Street opened on the back foot as investors mulled over US – Sino trade dispute developments, disappointing US new homes sales data and a hefty slide in Facebook.
It has been a while since we have heard anything new regarding progress in the US – Sino trade dispute. So, reports that President Trump and China’s President Jinping Xi are trying to push back on a date to meet, was not the encouraging news that investors were hoping for. The two leaders were expected to meet at Mar- a- Lago later this month. This now looks to be later in April raising suspicions that the deal isn’t as close to completion as both sides have been letting on.
Facebook shares hit by outage
Facebook shed over 2% as investors reacted to the most severe outage in its history. Not only Facebook, but also Whatsapp and Instagram accounts were affected. Whilst Facebook insist that hackers were not to blame and that the outage was caused by a database overload, investors are clearly weary. Trust and transparency is a big issue with Facebook, following what feels like scandal after scandal in recent years. Investors will be concerned that Facebook are not being as honest about this as they could be, which is causing a selloff in the stock.
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