Grim start to the week
Fiona Cincotta March 23, 2020 10:06 AM
The FTSE is trading lower and US futures are pointing to a weaker opening in the face of the inexorable corona spread on both continents
The FTSE is trading lower and US futures are pointing to a weaker opening in the face of the inexorable corona spread on both continents. With the US now rising to the third highest place in terms of the number of diagnosed cases the forecast for the country’s economy is being frantically revised lower.
EIA crude oil stocks on Wednesday and initial jobless claims on Thursday will be the most relevant indicators this week because they are the quickest to reflect what has happened on the ground last week, when movement restrictions came in and a number of US cities brought in closures of cafes, bars and restaurants. The bigger economic indicators have a time lag and are showing February data which has, for the moment, become as good as irrelevant.
On the FTSE ITV took a 10% hit to its shares after it suspend the filming of some of its most watched soaps because of the social distancing restrictions and also decided to not to pay out a dividend. The UK government is mulling bringing in even stricter measures which could potentially include banning all non-essential shopping, a move that would hit fashion retailers and sportswear makers like Next and JD Sports.
A ciggie in a crisis?
Among the very few stocks still trading in the black are tobacco firm Imperial Brands and retailers Sainsbury's and Morrisons which are still struggling to restock their shops emptied during the corona panic buying. Supermarkets are also one of the few industries currently hiring staff rather than firing.
The pound perked up at the start of the day but the optimism didn’t survive the onslaught of news and the currency nudged lower quickly to challenge the $1.16 level.
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.