With Joe Biden inching towards victory, and the Bank of England juicing up its QE package, the markets continued to climb on Thursday morning, maintaining their very strong start to November.
Given that the Andrew Bailey-led central bank loaded another £150 billion into its quantitative easing cannon – taking the total to £895 billion – it’s perhaps surprising that the FTSE lagged behind its peers after the bell, rising just 0.3%.
A few things were counting against the UK index, however. Alongside the Bank of England’s QE boost came the warning that unemployment will rise to 7.75% next year, while the UK economy won’t be back to its pre-pandemic levels until Q1 2022, rather than the previously forecast Q4 2021. The new lockdown is also set to cause a GDP contraction in the fourth quarter of this year.
On top of this, Sainsbury’s suffered a 3.5% slide as it revealed a half year loss of £137 million, while there were downturns elsewhere from Rolls-Royce (LON:RR) (-5.5%), Lloyds (LON:LLOY) (-2.8%) and BP (LON:BP) (-2.6%).
In contrast to the FTSE’s limp open, the DAX and CAC rose 1.1% and 1.2% respectively, as the pair continued to claw back the heavy losses incurred last week.
Looking ahead to the US open and, currently, the Dow Jones is eyeing a 300 point increase, one that would leave it a smidge shy of 28,150. The likes of Nevada, Arizona, Pennsylvania and Georgia still haven’t reported their final counts, though the Grand Canyon State has been called for Biden by certain news outlets. If you give Arizona’s 11 Electoral College votes to the Democrat – and that’s not 100% guaranteed – a victory in Nevada would be enough for Biden to secure the Presidency.
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