FTSE Surges As Chinese PMIs Impress
Fiona Cincotta December 1, 2020 8:19 AM
Vaccine optimism, impressive Chinese factory data and the prospect of continuing fiscal and monetary stimulus is keeping the European bourses upbeat.
After a phenomenal November run-up European markets are broadly resuming gains at the start of December, a traditionally strong moth for equities. Vaccine optimism, impressive Chinese factory data and the prospect of continuing fiscal and monetary stimulus is keeping the mood upbeat.
Manufacturing PMIs will remain in focus with data due from the UK and the Eurozone. The UK manufacturing sector has shown resilience across recent months even as services have shown signs of weakening. The flash estimate for UK manufacturing PMI was firmly in expansionary territory at 55.2 and this isn’t expected to change. Its understandable that manufacturing will be stronger than services during the lockdown period given that they haven’t been required to close.
House builders will be under the spotlight after Nationwide House Price data showed that UK house prices grew at the fastest pace since 2015 in November. The mini housing boom is showing no signs of letting up with house prices jumping 6.5% on an annual rate despite lockdown 2.0, as behaviour shifts and the stamp duty holiday keep the market robust.
Oil is under pressure once again battling $45 after OPEC+ members failed to reach an agreement over extending oil production cuts. Talks will be extended over the coming days which is likely to keep oil under pressure. Failure to agree a deal will see oil production increase by 2 million barrels a day at a time when travel restrictions and lockdown measures are likely to be dragging on demand.
Fallout from Arcadia’s collapse
Retailers are likely to attract attention as concerns grow over the health of the UK high street after Arcadia fell into administration. the fallout from this could be far reaching and that is unnerving investors. Not only are 13,000 jobs on the line, but landlords are also in line to take a hit from the collapse of Topshop’s owner.
GAIN Capital UK Limited (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.