Strong Earnings Can’t Help FTSE As Cable Hits Fed-Aided 10-Month High

Strong Earnings Can’t Help FTSE As Cable Hits Fed-Aided 10-Month High

Connor Campbell  | Jul 27, 2017 08:48

By Connor Campbell, Financial Analyst for Spreadex.com

The FTSE found itself caught between sterling’s Fed-inspired strength and a decent set of corporate earnings this Thursday.

Despite the Federal Reserve stating that it would start shrinking its balance sheet from September, ostensibly a dollar-positive move, investors instead focused on the central bank’s grumblings about weak inflation. Given that the previous month’s meeting minutes had highlighted the CPI-performance as a key issue for more than a few Fed members this was taken as a rate hike-delaying comment, doing further damage to an already gaunt greenback.

The news helped cable briefly surge above $1.315 for the first time since September last year, before settling slightly below that landmark level. This led to a muted start from the FTSE, though the weight of the pound’s gains is being somewhat negated by a largely positive morning for the index’s reporting companies.

Guinness-owner Diageo (LON:DGE) rose 5% as it revealed a £1.5 billion share buyback programme; Anglo American (LON:AAL) jumped 3.3% after restarting its dividend 6 months ahead of schedule; and Rentokil Initial (LON:RTO) was up just shy of 4% thanks to an absurd 637% increase in pre-tax profit. There were also positive statements from Shell (LON:RDSa), Relx (LON:REL), Schroders (LON:SDR), Smith & Nephew (LON:SN) and a currency tailwinds-boosted British American Tobacco (LON:BATS).

It wasn’t all good news, however. Even though it posted its best half year profit in 8 years, Lloyds (LON:LLOY) fell around 1.5% after revealing it had to set aside another £700 billion to cover the latest round of PPI claims. AstraZeneca (LON:AZN), meanwhile, dove off a cliff, plunging a stomach-churning 16% following the failure of a key lung cancer trial.

Like the pound, the euro has greatly benefited from the dollar’s sour summer, hitting a fresh 2 and a half year high in the aftermath of the Fed announcement, only to dip back under $1.175. The currency’s muscular showing continues to be a problem for the DAX, which slipped 0.2%, but less so for the CAC, the French index rising 0.5%.

Disclaimer: Spreadex provides an execution only service and the comments above do not constitute (or should not be construed as constituting) investment advice or recommendations, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any person placing trades based on their interpretations of the above comments does so entirely at their own risk. Spreadex Ltd is a financial and sports spread betting and sports fixed odds betting firm, which specialises in the personal service and credit area. Founded in 1999, Spreadex is recognised as one of the longest established spread betting firms in the industry with a strong reputation for its high level of customer service and account management.

In relation to spread betting, Spreadex Ltd is authorised and regulated by the Financial Conduct Authority. Spread betting carries a high level of risk to your capital and can result in losses larger than your initial stake/deposit. It may not be suitable for everyone, so please ensure you fully understand the risks involved. In relation to fixed odds, Spreadex Ltd is licensed and regulated by the Gambling Commission under licence number.

Original post

Connor Campbell

Related Articles

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Discussion
Write a reply...
Please wait a minute before you try to comment again.

Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

English (USA) English (India) English (Canada) English (Australia) English (South Africa) English (Philippines) English (Nigeria) Deutsch Español (España) Español (México) Français Italiano Nederlands Português (Portugal) Polski Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 中文 香港 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt हिंदी
Sign out
Are you sure you want to sign out?
NoYes
CancelYes
Saving Changes

+

Download the App

More markets insights, more alerts, more ways to customize assets watchlists only on the App

Download the App

More markets insights, more alerts, more ways to customize assets watchlists only on the App