Unsurprisingly investors took a cautious approach to trading early on Wednesday, with both the UK jobs report and, more importantly, a likely rate-hiking first Fed meeting from Jerome Powell still to come.
The FTSE was the worst performer after the bell, dropping around 30 points to lurk the wrong side of 7050. The index seems to be irritated by the continued strength of sterling; the pound ignored the ostensibly weaker, if still high, UK inflation reading on Tuesday, and is holding above $1.40 and €1.14, recent peaks against both rival currencies.
Now, there are a few potential obstacles facing the pound this Wednesday. First up is the latest UK jobs data, specifically the wage growth reading; analysts are expecting the figure (including bonuses) to climb from 2.5% to 2.6%, a move that would take the figure to its best level in over a year, so any disappointment there could sap the energy from the currency. And then, if all that goes well, it has to withstand what’s likely to be a jittery afternoon as investors gear up for the month’s Fed meeting.
Kingfisher (LON:KGF) remained a company pulled apart by intra-firm divergences with the release of its full year figures. For every division seeing explosive growth – like-for-like sales at Screwfix were up 10.1%, while in Poland they rose 5.3% – there was another posting some pretty figure numbers – B&Q comparable sales fell 2.8%, with a 3.5% slump in France (admittedly an improvement on the 4.6% drop seen at the halfway point).
This led total like-for-likes 0.7% lower, with an ugly 10% plunge in pre-tax profit to £682 million. Investors, clearly sick of waiting for the ONE Kingfisher restructuring benefits to kick in, sent the stock 7.5% lower, undoing a lot of the growth the company saw following its recent £60 million share buyback.
Disclaimer: Spreadex provides an execution only service and the comments above do not constitute (or should not be construed as constituting) investment advice or recommendations, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any person placing trades based on their interpretations of the above comments does so entirely at their own risk. Spreadex Ltd is a financial and sports spread betting and sports fixed odds betting firm, which specialises in the personal service and credit area. Founded in 1999, Spreadex is recognised as one of the longest established spread betting firms in the industry with a strong reputation for its high level of customer service and account management.
In relation to spread betting, Spreadex Ltd is authorised and regulated by the Financial Conduct Authority. Spread betting carries a high level of risk to your capital and can result in losses larger than your initial stake/deposit. It may not be suitable for everyone, so please ensure you fully understand the risks involved. In relation to fixed odds, Spreadex Ltd is licensed and regulated by the Gambling Commission under licence number.