FTSE nudges higher on mixed results
Fiona Cincotta June 17, 2020 5:08 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.
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