Retailers rally as Christmas data better than expected

As for most of this week retailers are front and centre on the FTSE 100 this morning after Marks & Spencer and Tesco reported their sales numbers for the last quarter. 

Miners pull FTSE index down while retail shares shrug off poor numbers
It has been a mixed bag for UK retailers, with cheaper and budget retailers outperforming mid-range chains. Tesco beat forecasts with its Christmas sales while M&S fell behind, replicating the picture seen earlier this week when Aldi and Asda published higher sales numbers while Sainsbury’s figures disappointed. 

Surprisingly this morning all the supermarket shares are trading higher, even M&S, because overall Christmas sales, though lower, proved to be less bad than many investors have feared. Nevertheless the overall index is down 0.5% pulled lower by a hefty fall of shares in Anglo Australian miner BHP Billiton, in turn caused by a Deutsche Bank downgrade.

European indexes lower, French manufacturing declines
Other European gauges are also trading lower in a mixture of negative domestic economic and company news and signs that the Sino-US trade talks were less successful than investors would have liked. The CAC was hit by a slowdown in French industrial production which has unexpectedly declined 1.3% in November, mainly on a slowdown in car manufacturing, machinery, pharmaceuticals and metals. But the French index, like its European peers, was also pulled lower as details begun to emerge from the Sino-US trade talks earlier this week. 

The US delegation to the Chinese talks published a long list of outstanding issues that the two sides have not yet agreed on although the Americans did acknowledge that China has agreed to buy more US goods. The way details were released was clearly carried out with one eye on the market, trying to avoid a selloff that typically follows negative news from the US-China trade discussions.

Pound weakens amid no sign of Brexit progress
Sterling is losing ground against the euro and the dollar as the Prime Minister seems to be fighting a losing battle with Parliament over approval of the current Brexit deal. The proposal is due for a vote next week and if it fails the PM will have to come up with an alternative plan within three days after MPs voted to make it harder to have a no-deal Brexit