Breaking News
Close
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

Firmer Pound Dents FTSE 100

By CMC Markets (David Madden)Market OverviewJan 13, 2021 06:17
uk.investing.com/analysis/firmer-pound-dents-ftse-100-200451991
Firmer Pound Dents FTSE 100
By CMC Markets (David Madden)   |  Jan 13, 2021 06:17
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

The mood in European equity markets is subdued today as health woes linger.

Europe

A number of major economies are still dealing with high numbers of new Covid-19 cases so that is hanging over sentiment. US politics is influencing stocks too. The riot in the Capitol building last week is still engulfing the Trump administration. On the other hand, there is talk that President-elect Joe Biden will unveil trillions in new stimulus measures this week. The FTSE 100 has fallen the most out of the well-known European indices on account of the rally in sterling. Internationally focused stocks like Unilever (LON:ULVR), British American Tobacco (LON:BATS), AstraZeneca (LON:AZN) and GlaxoSmithKline (LON:GSK) are feeling a little pressure because the move higher in the pound impacts their profits.

The DIY boom and the robust demand in the construction sector have helped Kingfisher (LON:KGF) in recent months as the group owns B&Q and Screwfix. Like-for-like (LFL) group sales in November and December increased by 11.4% and 22.1% respectively. Iberia, as well as France, suffered in November but they recovered in December. The British and Irish businesses performed well in both months. The online division saw stellar growth as sales surged an average of 154.8% across the months. B&Q is the retail side of the business, while Screwfix supplies building contractors – the unit is on track to register £2 billion in sales this financial year. In light of the recent sales numbers, the company is comfortable with the top end of forecasts from analysts.

Land Securities (LON:LAND), the property specialist, has struggled for much of the past year as the pandemic has severely impacted the retail sector, so collecting rents has been difficult. This morning’s update covered the December quarter. In the timeframe, the company was due to collect £112 million in rent but it only collected 65% of the amount. Last year’s metric was 94%, so that highlights the pain caused by the health emergency. 36% of the rent due from the retail business was collected, by contrast, the office division received 96% of the due rent. As a reaction to the health crisis, Land Securities announced an £80 million support fund for tenants as a way of providing assistance. So far, £24 million has been allocated to clients. If rent is not collected it does not necessarily mean that it will never be received. Between late March and late December it collected 80% of the total rent it was owed.

Games Workshop Group (LON:GAW) posted a solid set of first half year numbers. Revenue increased by 25.8% to £186.8 million. Pre-tax profit came in at £92 million, up 55% on the year. The company sells well-known tabletop games like Warhammer – which witnessed a jump in demand thanks to the restrictions. The stock is in the red today but seeing as it posted a record close yesterday it seems that a lot of positive news was baked into the price.

Vistry (LON:VTYV), the housebuilder, confirmed that demand has been strong. Full year pre-tax profit is predicted to come in at the higher end of expectations of £140 million. The group will pay a modest final dividend. Vistry’s update today was similar to that from Barratt Developments (LON:BDEV) last Friday.

US

The S&P 500 is a touch higher as it regained some of the ground in lost yesterday. Chatter that Mr Biden will reveal extra stimulus plans this week seems to have put a floor under stocks as some traders are worried about exiting the market for fear of a huge spending plan being posted. The NASDAQ 100 is fractionally in the red following last night’s relatively large loss.

Zoom Communication (NASDAQ:ZM) shares are a little higher today even though the company announced plans to raise $1.5 billion from a stock issue. The group’s video chatting services saw huge demand as the pandemic prompted a surge in remote working. Zoom’s share price is up roughly 330% in the past 12 months so the group is seeking to take advantage of the high valuation and raise more cash.

Walmart (NYSE:WMT) is teaming up with Ribbit Capital, the investment group that backed the Robinhood app and Credit Karma, to create a new fintech group to grow its retail financial services business. Robinhood has been a roaring success in terms of onboarding retail clients, so that bodes well for Walmart.

Twitter (NYSE:TWTR) and Facebook (NASDAQ:FB) are still in focus following the suspension of President Trump’s accounts on the social media platforms. The tech sector as a whole is at risk of being subjected to tougher regulation but the social media titans are at the centre of the attention because of the riot in the Capitol Building.

Boeing (NYSE:BA) delivered 157 aircraft in 2020 but it had over 600 cancellations. The group’s reputation took a pounding because of the 737 Max scandal and the pandemic made matters worse.

FX

The US dollar index is a little lower on the session following on from the three week high that was set yesterday. In the past week the greenback has enjoyed a decent rebound but the positive move seems to be taking a breather today. EUR/USD is essentially flat on the session.

The CMC GBP Index is up 0.65% as we heard from Andrew Bailey, the head of the Bank of England. The central banker played down the possibility of introducing negative interest rates as he described the policy as ‘controversial’. Sterling hit its highest level in over own week on the back of the update.

Bitcoin’s volatility has cooled following its 20% tumble yesterday, which was a result of the FCA’s warning to retail clients about the risks associated with the asset. Today’s trading range has been relatively low as the dust a settled. It currently trading at $34,500, up 1 5% today.

Commodities

Gold had had a lacklustre session as volatility in the markets as a whole has been low, especially the US dollar. The yellow metal has been in a downtrend for nearly one week and should it break below yesterday’s low, it could target $1,800.

WTI and Brent crude oil are higher today as the same old supply worries are doing the rounds. Last week Saudi Arabia announced plans to cut output by 1 million barrels per day in February and March. Tomorrow’s EIA report is expected to show that US oil stockpiles will fall by 2.6 million barrels, which would be the fifth consecutive week of declines.

"DISCLAIMER: CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed.

No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. "

Original Post

Firmer Pound Dents FTSE 100
 

Related Articles

Firmer Pound Dents FTSE 100

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Our Apps
DOWNLOAD APPApp store
Investing.com
© 2007-2022 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: 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.
  • Sign up for FREE and get:
  • Real-Time Alerts
  • Advanced Portfolio Features
  • Personalized Charts
  • Fully-Synced App
Continue with Google
or
Sign up with Email