FTSE Heads Lower As Covid Fears Overshadow Retail Sales

Fiona Cincotta September 18, 2020 8:30 AM

Following on from a weak performance on Wall Street overnight and a mildly stronger effort in Asia, European bourses are heading southwards on the open.

Following on from a weak performance on Wall Street overnight and a mildly stronger effort in Asia, European bourses are heading southwards on the open. Indices are mildly in the red as markets take stock of a week which has seen coronavirus cases rise steeply in Europe and central banks sit on their hands for another month.

The FTSE is lagging behind its European peers as fears of a second lockdown overshadow upbeat retail sales. As the number of new daily covid cases continues to rise, the health secretary has refused to rule out a second national lockdown. His comments come as the government’s test and trace system is “barely functional” and as almost 11 million people are facing enhanced lockdown measures. Airlines, travel stock and retailers are under pressure.

UK retail sales are on the rise for the 4th straight month, rising +0.8% MoM in August, down from July’s 3.6% surge but ahead of 0.7% expected. Britain’s newfound love for DIY continued in August with spending on DIY and household goods reporting strong growth, offsetting lacklustre clothes sales, which highlight the ongoing struggles that our High Street retailers face.

Oil surges across the week
Oil prices have seen their fair share of volatility this week. A combination of inventory draws, Hurricane Sally stopping and starting production, demand concerns have played with the price. WTI is on track for gains of over 10% and Brent exceeding 9%. The latest drive higher in prices comes after OPEC cracks down on non -member states. OPEC urged members to conform with production cuts in its online meeting.

US consumer confidence
Looking ahead the economic calendar is fairly quiet, with US consumer confidence expected to show an increase to 75 in September, up from 74.1. This would be some welcomed good news after the slew of disappointing numbers stateside yesterday. With Congress seemingly still considerable distance from agreeing an additional rescue package, any signs of consumer confidence slipping could negatively impact of sentiment.

TAGS:

FTSE 100

Build your confidence risk free

OPEN A DEMO ACCOUNT

More from FTSE 100

Join our live webinars for the latest analysis and trading ideas. Register now

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.

For further details see our full non-independent research disclaimer and quarterly summary.