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FTSE Higher As Dow, S&P Hit Record Highs

By City Index (Fiona Cincotta)Stock MarketsSep 20, 2018 18:20
FTSE Higher As Dow, S&P Hit Record Highs
By City Index (Fiona Cincotta)   |  Sep 20, 2018 18:20
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The FTSE has mostly moved higher during the day, gaining ground as US markets broke record ground. The Dow Jones Industrial Average rose to 26,623 as almost all of its 30 component companies traded higher. The S&P 500 also hit a record high while Nasdaq traded 1.7% below its top level. Although there is some froth in the rally it is also a reflection of the overall strong state of the US economy which is currently growing at around 3%. Jobless claims are still declining, the housing market is going strong and the country’s manufacturing continues to expand.

In London, miners were favoured again as metals prices continued to build on recent rallies; the moves higher were also helped by Anglo-Australian heavyweight Rio Tinto (LON:RIO) announcing plans for a large share buyback.

Brent crude drops after Trump’s anti-OPEC tweet

Crude oil prices seem to have become the next target for US President Trump’s ire as he took a swipe at the oil cartel OPEC. Brent crude lost 0.78% and West Texas Intermediate traded 0.30% lower after Trump tweeted that OPEC needs to keep crude prices lower because of the military protection the US provides for the region. Oil prices have moved higher over the past few weeks because of the looming US sanctions against Iran which will disrupt crude exports from this country but the increase has been capped by rising levels of stocks held in the US. The US is keen to avoid the fallout from Iran sanctions and US representatives have in separate negotiations asked the two largest producers, Saudi Arabia and Russia, to keep production levels up in order to avoid a spike in prices. However, this week Saudi Arabian officials said that they were comfortable with oil prices around $80, slightly above today’s Brent crude price of $78.92. Trump’s tweet is a shot at the cartel ahead of its meeting on Sunday where it will discuss its next production level target.

Pound flat against euro as EU pushes for an October Brexit deal

The pound has perked up to trade 0.78% against the dollar but was barely higher against the euro as European Union leaders pushed for a Brexit deal next month. A summit in Brussels on October 18 is seen as a form of soft deadline for a Brexit deal. EU leaders said that if Prime Minister Theresa May doesn’t provide a better offer on trade and the Irish border they are ready for the talks to fail. Her response was that her Chequers proposals for trade with the EU were the only way forward.

Kier’s profits remain solid

This isn't a bad result from Kier (LON:KIE). Profits, operating margins and revenue are all up, the order book is solid and the company has even offered an increased dividend.

But there may need to be further improvement in Kier's performance before it can well and truly shake the short sellers off its back.

When you strip out the positive impact on growth from the McNicholas acquisition last year, revenue was flat. Costs, including finance expenses, also ticked higher as the company's debt pile swelled -- though some of that spending should help save money down the track.

There are plenty of opportunities for British construction companies to flourish over the longer term, as governments upgrade aging infrastructure to adapt to population growth and technological advances such as electric cars.n the more immediate future, Kier will want to keeping making good on its pledge to reduce leverage if it wants to fully grasp promising opportunities in the construction market.

"Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient.

Any references to historical price movements or levels is informational based on our analysis and we do not represent or warrant that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, the author does not guarantee its accuracy or completeness, nor does the author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions."

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FTSE Higher As Dow, S&P Hit Record Highs

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FTSE Higher As Dow, S&P Hit Record Highs

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