Despite a negative US open for the Dow Jones, the erasure of most of the pound’s morning rebound helped propel the FTSE to a fresh all-time high.
The Dow slunk back under 25000 this Tuesday, dipping 30 or so points after the bell rang on Wall Street. It suggests that the trade war relief rally was a one-and-done deal, the kind of macro-news limited in its market-driving potential by a lack of detail and a healthy dose of scepticism about the longevity of any tentative agreement between the US and China.
Luckily for the FTSE, it had other things to focus on. The fact cable’s gains more than halved as the day went on freed the UK index up to shake off its early reticence, the FTSE adding around 25 points in value. That sent it above 7890 for the first time in its history, in the process making the mythic 8000 mark closer to becoming a reality.
Whether or not the FTSE can actually reach that landmark level this week may be down to a couple of factors:
One: the performance of Brent Crude. The black stuff re-crossed $80 per barrel on Tuesday as supply concerns relating to Venezuela and Iran continued to heighten. However, BP (LON:BP) and Shell (LON:RDSa) were resistant to this rise, instead falling 1.2% and 0.6% respectively. If the FTSE is to keep rising, then its oil colossi need to get on board.
Two: how sterling reacts to the week’s data. The inflation reading on Wednesday and the second estimate Q1 GDP figure on Friday are both potential lightning rods for a pound-rebound, dependant on whether or not they beat the expected stagnation. If they don’t, and cable hits a fresh 2018 low, then the FTSE may be in for a boost.
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Correction: The title originally read 7800. This was an editorial error and has now been fixed. Apologies for any inconvenience caused