FTSE nudges higher on mixed results
Fiona Cincotta June 17, 2020 10:08 AM
The FTSE is moving higher this morning but yesterday’s sharp rally has proved to be mostly froth.
FTSE nudges higher on mixed results
The FTSE is moving higher this morning but yesterday’s sharp rally has proved to be mostly froth. A mixed bag of results and underlying news are pulling in two directions: on the one hand the US economy seems to be picking up faster than expected after the lockdowns have been eased, on the other the threat of a second wave of COVID is becoming stronger. US retail sales rose sharply in May and recouped more than 60% of the sales lost in March and April. But at the same time Beijing is gradually going into a bigger lockdown, prompted by new cases. The city has cancelled half of the flights in and out of its main airport, the world’s second busiest.
The big movers on the FTSE are energy supplier SSE, up 9% on results, construction equipment hire firm Ashtead, still benefiting from US infrastructure plans, and property firm Berkeley Group, which rallied despite profits and revenue declining by around one third.
Germany to offer €5 billion bunds today
Having raised over €31 billion for 30-year bonds sold through banks last week, Germany will offer another €5 billion of its benchmark bunds. The safe haven asset is expected to be well received, particularly as plans are firming up for the EU to agree on a massive recovery plan in July.
A rise in US oil stocks hits WTI prices
Brent crude is gaining ground on signs of a US economic recovery but ironically, the US domestic WTI contract is lagging behind. Yesterday’s data from the American Petroleum Institute showed a rise in the level of oil stocks, caused by some of the oil still being offloaded into the US from Saudi tankers sent in May. Some of the buildup is also being created by a reduction in demand, caused by concerns that a pickup in new coronavirus cases in three or four US states will slow down both transport and industrial consumption. EIA petroleum reserve stocks later today are expected to confirm that stocks over the last seven days have been building up.
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.