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Sterling’s Strength Hits FTSE 100; JD Wetherspoon Toasts Good Figures

Published 13/09/2019, 12:10
Updated 03/08/2021, 16:15

The FTSE 100 is slightly lower this morning as the strength of sterling is causing the British index to underperform against its Continental counterparts. Intentionally focused firms like Unilever @(LON:ULVR), British American Tobacco (LON:BATS), and AstraZeneca (LON:AZN) are lower today, and the firmer pound is impacting the stocks.

Eurozone equity markets are higher in the wake of the stimulus package that was revealed by the European Central Bank yesterday, and to a lesser extent, hopes for a US-China trade deal have ticked up too. President Trump is open to the idea of an interim trade deal with China, and that has lifted sentiment in Europe, but traders are not getting too excited, as Mr Trump can change his tune quickly.

JD Wetherspoon (LON:JDW) posted strong full-year figures. Total sales increased by 7.3% to £1.8 billion, and like-for-like (LFL) sales before exceptional items jumped by 6.8%. LFL bar and food sales increased by 5.8% and 8.3% respectively, and it is clear their decision to revamp their menu in recent years is paying off. The industry is changing and food is becoming a more important component of the business, and it is encouraging to see that JD Wetherspoon are gaining ground in the area.

The firm is at the top of the pub industry as its shares price hit a record-high last week, and it has its wide selection of good value food and drink to thank for the stellar performance. The broader consumer environment is cautious, but JD Wetherspoon are attracting savvier customers.

Britvic (LON:BVIC) shares received a boost from Jefferies who upgraded the stock to buy from hold, and increased the price target to 1,000p from 880p.

IMI (LON:IMI) shares are lower this morning after Berenberg issued a sell rating for the stock. The finance house has a price target of 875p, and keep in mind the current price of IMI is 1,006p.

EUR/USD rebounded the in the latter half of the trading session yesterday after the dust had settled from the ECB update, and it is extending its gains this morning. Spanish CPI held steady at 0.4%, meeting forecasts, and the dismal rate of inflation justifies the need for stimulus in the wider currency bloc.

GBP/USD has rallied today as traders are as less fearful about the possibility of a no-deal Brexit. John Becow MP, the speaker in the commons, said he would use ‘creativity’ in parliament if Prime Minister Johnson disregards a law in that was introduced to avoid a no-deal Brexit.

We are expecting the Dow Jones to open 68 points higher at 27,250 and we are calling the S&P 500 up 7 points at 3,016.

DISCLAIMER: CMC Markets is an execution-only provider. The material (whether or not it states any opinions) is for general information purposes only and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed.

No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

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