Melrose industries was leading the risers on the FTSE this morning, up more than 6%, although the index itself opened down. Components manufacturer Melrose was maintained as a buy by analysts yesterday against some other companies in the engineering and aerospace market, like Rolls Royce, which is down 57% for the year.
British Airways owner International Consolidated Airlines (IAG) was also in positive territory this morning, despite having pulled its dividend and with passenger air traffic numbers approaching the virtually non-existent (although air cargo is still busy). BA announced it had reached agreement with unions to furlough nearly all its cabin staff and other employees most exposed to passenger traffic.
Trump goes into bat for the oil price
The oil market remains an area of particular focus and is finely balanced by Saudi Arabia’s desire to keep oil prices low versus the additional downward pressure being exerted by the massive slow down in the global economy. President Trump is obviously keen to protect the domestic US oil industry and is trying to push the Saudis into a deal with Russia. The oil market seems to be taking its lead from the White House at the moment. The oil price, which has seen a spectacular drop from $60 last month is trying to stage rally and claw its way past the $30 mark.
Economic numbers pull down share markets overnight
Many traders are still looking for a V-shaped recovery and a bounce in equity markets, but new economic data like the 6.6m unemployment number releases by the US yesterday has been dampening markets' enthusiasm overnight. Wall Street futures are pointing to a lower open at lunchtime. News of the spread of the virus in Asia has also seen both the ASX and Nikkei drop overnight with the ASX down 1.7%. The FTSE is still down slightly over 1% this morning.