Energy stocks and GVC pull FTSE higher from early fall

The FTSE gapped lower on the open as investors cautiously eyed a busy week ahead with several central bank decisions looming and corporate updates expected from key players such as BP and the UK banks. As the day progressed a rally in oil over supply concerns in addition to strong earnings from GVC has helped lift the FTSE, overshadowing a weaker start on Wall Street and a stronger pound ahead of Thursday’s BoE rate decision.

Oil rallies as Iran sanctions overshadow trade war concerns

Oil rallied over 1% as supply concerns remain in focus ahead of the looming US sanctions on Iran which have already started to limit flows of oil from the county. The price of oil has rallied almost uninterruptedly for the last two weeks, as supply issues, mainly from Iran, but also Libya and Venezuela overshadow increased production from Saudi Arabia and Russia and demand concerns amid the unfolding trade war.  The rising oil price has boosted oil majors, including BP which is due to report tomorrow.

GVC hits the jackpot

Ladbrokes' owner GVC hit a record high after agreeing to launch an online betting platform in the US in conjunction with US hotel and casino operator MGM Resorts International. The move comes just months after a US Supreme court ruling lifting a ban on sports betting. GVC has hit the jackpot with this deal - as the UK government is taking measures to clamp down on gambling, GVC agrees a tie up with arguably the biggest US gambling brand, giving GVC access to 15 US states, with a population of over 90 million. With those statistics the 5.5% rally in the share price is a good reflection of the perceived benefits of the deal.

Nasdaq slips again

Earnings season continues in the US, with 140 companies on the S&P due to report this week.  Apple’s numbers, after the closing bell on Tuesday, are expected to be a central focus particularly following the mixed results from tech stocks and more specifically FAANG stocks so far. Netflix, Facebook and Twitter have all disappointed with their numbers tanking sharply in the aftermath, whilst Amazon and Alphabet rallied after smashing expectations, whilst the latter also shrugged off a €5 billion fine. There is a growing unease with subscription based or advertising revenue generation based business models within the tech sector, as these firms which have previously been unstoppable have fail to impress with their latest figures. On the other hand, the tech giants such as Amazon, Alphabet and Microsoft continue to go from strength to strength indicating that we could see a decoupling of the FAANG trade, as Facebook and Netflix fall behind their peers.

The Nasdaq has dropped a further 1% in early trade, its third consecutive losing session. Losses total close to 4% over the past three sessions show just how nervous traders have become towards tech stocks, following these disappointing updates.