Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Stocks Hover As Japan Denies 'Helicopter Money'; Poundland Sold

Published 13/07/2016, 12:07
Updated 03/08/2021, 16:15

Stocks across Europe were flat on Wednesday morning in a sign that the strong rally that started the week has run out of steam. Weak trade data from China, a pullback in oil prices and disappointment that Japan will not implement “helicopter money” has damaged sentiment.

Japan’s Chief Cabinet Secretary Yoshihide Suga denied reports that Prime Minister Shinzo Abe is considering “helicopter money” as a possible policy measure. Despite all the evidence that quantitative easing and negative rates haven’t solved Japan’s deflation problem, Abe looks set to double down with his failed Abenomics program. If new monetary stimulus is not through “Helicopter money,” more QE looks in the offering given the poor reception to negative interest rates.

Some disappointing corporate trading updates from Barratt Developments (LON:BDEV) and Burberry (LON:BRBY) took the edge of trading in British blue chips. Poundland (LON:PLND) was the obvious mid-cap outperformer following its acquisition by South Africa’s Steinhoff (DE:SNHG).

Steinhoff has agreed to purchase Poundland for 220p a share. The drop in the pound against the South African rand has made the opportunity to buy up Poundland too good to pass by for Steinhoff. The South African company already owed nearly a quarter of outstanding Poundland shares so it makes sense to put in a firm offer with the exchange rate offering a healthy discount. Given the current economic uncertainty for the UK economy, a 39% premium will satisfy Poundland shareholders.

Currency markets lost their recent buzz with sterling flat ahead of tomorrow’s Bank of England rate decision and the yen strengthening moderately at the disappointment over no helicopter money.

US stocks look set for a flat open on profit-taking after the Dow Jones Industrial Average touched new record highs before the release of the Fed’s Beige book.

USA pre-opening levels
S&P 500: unchanged at 2,152
Dow Jones: 5 points lower at 18,342
Nasdaq 100: 1 point lower at 4,576

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.

Original post

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.