The FTSE led European stocks higher on Thursday as trade optimism over shadowed political turmoil on both sides of the Atlantic. Whilst European bourses advanced, Wall Street had a weaker start out of the blocks.
The FTSE stormed over 1% higher as investors snapped up riskier assets and as the weaker pound offered support to the index. Whilst Aveva and Next topped the index, Pearson and Imperial Brands Group were stand out losers.
Pearson (LON:PSON) tanks 14% on poor results
Pearson dropped an eye watering 14% after disappointing investors with its Q3 update. The education provider continues to experience weakness in the US and particularly US university coursebooks. We are seeing a change in dynamic as university students switch away from textbooks and towards screens. Pearson has been slow to adapt to these changes and as a result this area of the business has taken an important hit.
Pound rebounds despite Brexit uncertainty
The pound rebounded from session lows; however this was more of a dollar weakness story rather than the pound displaying any fundamental strength. As Westminster continues to come to blows of Brexit pound traders are still desperately trying to figure out what happens next with regard to domestic politics and Brexit.
Boris Johnson has disobeyed the law once over Brexit, nerves are growing that he could do so again and fail to prevent a no deal Brexit.
Dollar dips post GDP
The dollar slipped following the release of the final US GDP revision. US GDP remained unrevised at 2%. This is down slightly from the initial reading of 2.1%. However, the biggest concern was that business investment was weaker than originally estimated and corporate growth was lacklustre casting a shadow over the US economy. Business investment declined 1%, the steepest decline since 2015. The US economy is being stalked by fears of recession, which could turn into a self-fulfilling prophecy.
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