News flow was working against the FTSE on Thursday as the house builders and Sainsbury dragged the index lower. A warning on margins from Taylor Wimpey and news that the Sainsbury- Asda merger was off saw the FTSE fall sharply on the open. Any attempt to edge higher across the session proved futile, particularly after the Dow opened 150 points in the red, dragging on investor sentiment across the afternoon.
Dow tumbles on 3M earnings
Whilst the S&P and the Nasdaq touched record highs earlier in the week, the Dow is not playing ball. The Dow slumped on the open as shares in 3M dive 10% after the company reported earnings that were much lower than forecast. The company slashed its full year outlook and announced plans to cut 2000 jobs worldwide.
The S&P and the Nasdaq both opened in positive territory, with the Nasdaq reaching another record high. Tech stocks were heavily in demand following impressive numbers from Facebook and Microsoft overnight.
We are approaching the half way mark for earnings and overall the news has been good enough to keep the bulls in charge. The bar was set low coming into this earnings season and it has been surpassed. Granted 3M is a troubling result, but overall these have been few and far between.
US data supports the dollar rally
The dollar continued to dominate across the board on Thursday following better than expected durable goods data. Durable goods shot up 2.7% in March well ahead of the 0.8% forecast. The strong reading comes following impressive home sales data and retail sales data over the pat week. The stats are showing that the US economy is holding up well compared to other economies.
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.