FTSE closes higher aided by Rolls Royce (LON:RR)
Despite starting Wednesday’s session in the red, weighed down by trade war fears and US economic advisor Cohn’s resignation, the FTSE managed to break into positive territory in the afternoon. Support came from the aerospace and defence sector, led by Rolls Royce which was trading over 12% higher.
Investors dived into Rolls Royce across the session following confirmation from the aero-engine maker that it was on track to hit 2020 target. Furthermore, the firm beat forecasts for 2017 and promised more cost cutting ahead. These results show that after a long struggle Rolls Royce is finally reaping the rewards of CEO Warren East’s restructuring programme and investors are optimistic regarding the future, pushing the share price to its highest level since November.
New Look falls victim to high street woes
Troubles on the British high street shows no signs of slowing, as retailer New Look enters dangerous waters, with plans to close 60 stores and axe up to 980 jobs in a desperate bid to stay afloat. 2018 has so far been a brutal year for bricks and mortar retailers as footfall on the high street continues to fall amid the continued rise of internet shopping revolution. New Look is just the next in line of a growing list of retailers falling victim to the brutal changes in shopping habits.
ADP numbers beat expectations
US markets were not experiencing the same level of optimism as Europe, despite strong ADP employment figures ahead of Friday’s non-farm payroll numbers. Data showed that the number of jobs in the private sector increased by 235k, ahead of the 200k forecast, although slightly lower than last months upwardly revised 244k. These figures often serve as a good precursor to the Labour Department’s non-farm payroll figures released on Friday and let’s not forget the explosive reaction that last months NFP figures unleashed on the markets, pushing yields to 4 year highs, boosting the dollar and pulling the equity indices sharply lower.
Following today’s ADP numbers investors have been starting to tear themselves away from developments in Washington to turn their attention towards towards Friday. Following the release treasury yields are in the rise, boosting the dollar after yesterday’s losses.
Cohn’s resignation catches market by surprise
Markets continue to keep an eye on developments in Washington, with the Dow dropping over 160 points lower as investors reacted to yesterday’s resignation of Trump’s economic Advisor Gary Cohn. Cohen’s decision to leave has taken the markets by surprise and given that he was leading the charge against Trump’s import tariffs, the markets are interpreting this as a win by the President. Cohn has often been described as a steadying influence on Trump, so his exit from the White House will also raise concerns about where the Trump administration is heading, as Trump appears to recommit to his protectionist, nationalist policies. Shares in big metal users such as General Motors (NYSE:GM) and Boeing (NYSE:BA) have been particularly hit on the back of the announcement as has Caterpillar, all falling around 1% in early trading.
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