FTSE drops as blue chips slash dividends

Slashed dividends and a record jump in the number of UK jobless in April are keeping the FTSE in the red this morning despite some strong performances from airlines

Charts (4)

Slashed dividends and a record jump in the number of UK jobless in April are keeping the FTSE in the red this morning despite some strong performances from airlines. Among the worst hit stocks is tobacco company Imperial Brands which has lost income in the past quarter not so much because of the coronavirus but due to a ban in the US on some of its vape products.

The UK just announced a new set of global tariffs which will replace the pre-Brexit tariffs in a move designed to position it for trade negotiations with both the EU and the US later this year. Tariffs on competing industries like cars, agriculture and fisheries will mostly stay the same but will be significantly reduced for imports of components and other goods while all tariffs of 2% and less will be fully removed.

Though the FTSE is trading lower early, and declining, notable exceptions are airlines – British Airways parent IAG is up 7% - marketing group DCC and speculative investor Melrose Industries.

Trouble brewing on the Sino-US front  

Just as one set of easing is happening across Europe and the US, there is frosting on another front. The Sino-US friction is beginning to spread out from the political domain and into the markets with Nasdaq’s plan to reexamine rules for initial public offerings that will particularly affect the listing of Chinese companies. The new rules will require companies from some countries, including China, to raise $25 million in equity capital in their IPO.

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.