There’s been a clear move higher in risk assets in recent trade after the release of some data from the Far East suggests that China continues to provide ample levels of stimulus to its economy.
The FTSE has added over 30 points this morning to trade back near last week’s close and the market appears well set to add to this going forward and push up to trade at 2019 highs. As the dust settles on another week dominated by Brexit headlines that has resulted in nothing changing other than the can being kicked further down the road, the pound is little changed on the whole.
Any upside benefits gained in avoiding a no-deal have been mitigated by the heightened levels of uncertainty being prolonged further and until something tangible changes on this front, there’s little to suggest any chance of significant appreciation in the pound.
Stocks and Oil jump as China expands credit
The March M2 money supply rose by 8.6% Y/Y vs 8.2% expected while new yuan loans came in at 1.69B vs 1.20B expected. Compared to levels seen in recent years these figures aren’t actually that elevated, but they do represent a pick-up compared to the latest numbers and suggest the world’s second largest economy is scaling back on its deleveraging efforts in a bid to bolster growth. In itself this data could be described as only mildly supportive of risk assets but the clear positive market reaction reveals how both equities and crude oil retain a heightened sensitivity to good news at present, while looking through any negatives - a pleasing scenario for Bulls.
Uber (NYSE:UBER) revenues stall ahead of public listing
Ahead of what is arguably the most eagerly anticipated IPO in years, Uber has revealed that revenues levelled off in recent quarters as the ride-hailing firm seems to be facing greater competition in its primary market. The prospectus was published before an expected listing on the New York Stock Exchange next month which is estimated to value the firm at around $90-100B and rival Lyft’s recent listing has only served to whet the appetite further. Lyft (NASDAQ:LYFT) enjoyed a great first day’s trade in soaring 20% from the IPO price of $72 - which valued the firm just north of $20B - to the high $80s but the euphoria has quickly subsided and the market ended back down at $61 last night. Uber’s expected valuation puts the company at around 5 times that of Lyft, and investors will be hoping the stock accelerates higher rather than stalling or going into reverse like it’s smaller rival has.
