The FTSE rallied for a third straight session on Wednesday despite a stronger pound, jumping 115 points after a dismal October.
October is traditionally a difficult month for equities but the FTSE shedding 4.8% is a significantly larger drop than what we would normally expect. How the beginning of November pans out will be interesting.
Of the geopolitical issues which have be weighing on the market, namely Brexit, the Italian standoff with Brussels over-spending, the US – Sino trade war or the slowing global, none have been resolved and we also have the US mid-term elections thrown into the mix.
Gains were broad based on the FTSE with Standard Chartered (LON:STAN) a notable riser following impressive results with profits surging 37% on last year. Standard Chartered reported a pre-tax profit of $1.06 billion, up from $774 million a year before and 9% ahead of estimates. By focusing on what is does best – Asia – the bank has managed to sharpen its competitive edge. Costs have been a concern in previous years, but the bank has shown its capabilities at reigning these in.
Next (LON:NXT) fell following lacklustre results. The bellwether dropped close to 3% after results underwhelmed. The retailer confirmed that in store sales fell further in the third quarter, whilst overall sales grew by 2% thanks to a strong performance in online sales.
Brexit deal in sight
The pound moved higher versus the dollar, despite stronger than forecast US ADP (NASDAQ:ADP) jobs data. The pound had sunk to an 11-week low in the previous session as Brexit fears took hold. However, comments by the Irish Prime Minister and Brexit Secretary Dominic Raab that a Brexit deal could be done by November 21st has given the pound fresh legs.
This is not the first time that we have been told that the end is firmly in sight, which is why the pound is wary. This is good news and another step in the right direction but it this is still not signed sealed and delivered.
Tech stocks rally on Facebook (NASDAQ:FB)
Wall Street was also on the rise, with a rally in tech stocks, as earnings lifted the mood after a horrifying month. Facebook shares were up 3.7% as investors breathed a sigh of relief that the figures weren’t disastrous.
The FANG's were particularly in favour after bearing the brunt of the selloff across the month. Investors will now look ahead to Apple (NASDAQ:AAPL) reporting after the bell tomorrow.
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