FTSE slides as PMIs show extent of economic damage in Europe

Mixed company reports and data showing the extent of the coranavirus damage on European economies has knocked the FTSE slightly this morning causing the index to drop 0.4%

Charts (3)

Mixed company reports and data showing the extent of the coranavirus damage on European economies has knocked the FTSE slightly this morning causing the index to drop 0.4%. But it was not all bad news. UK house builder Taylor Wimpey helped lift other property companies and DIY specialists with its plan to return to construction in steps from May 4. The firm said that its order book has grown on last year and that its cash position remains strong.

A number of FTSE firms focused on the domestic retail market also traded higher in anticipation of further government care packages and support. The UK government now plans to raise £180bn over the next three months to plug the gap created by its lenient tax collection policy during the lockdown.

Aerospace component maker Meggitt lead the FTSE gainers after it reported a revenue increase in the first quarter while vowing to cut 15% of its workforce.

Unilever shares struggled this morning despite the firm reporting a rise in first-quarter turnover and keeping the dividend at 41 euro cents. Instead investors’ confidence was dented by concerns over demand for the company’s products during the rest of the year, particularly in the US market.

Trump’s oil threat

WTI prices rose 8% after President Trump made a threat to Iran, telling US warships to destroy any vessels that posed a threat. That is all well and good but works only for those who don’t know that the WTI storage bottleneck is actually happening in the US and that most of the overproduction causing WTI prices to be as low as they are, are either domestic or comes from very high Canadian imports and not the relatively low Iranian output.

The key piece of data today that will determine the demand for WTI will not be Iranian vessels but US initial jobless claims, because that will be the real reflection of both transport demand and what other demand there will be over the coming weeks.

More from Indices

Related Articles

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.