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Strong Earnings Can’t Help FTSE As Cable Hits Fed-Aided 10-Month High

By Connor CampbellStock MarketsJul 27, 2017 08:48
uk.investing.com/analysis/strong-earnings-can%EF%BF%BD%EF%BF%BD%EF%BF%BDt-help-ftse-as-cable-hits-fed-aided-10-month-high-200196359
Strong Earnings Can’t Help FTSE As Cable Hits Fed-Aided 10-Month High
By Connor Campbell   |  Jul 27, 2017 08:48
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By Connor Campbell, Financial Analyst for Spreadex.com

The FTSE found itself caught between sterling’s Fed-inspired strength and a decent set of corporate earnings this Thursday.

Despite the Federal Reserve stating that it would start shrinking its balance sheet from September, ostensibly a dollar-positive move, investors instead focused on the central bank’s grumblings about weak inflation. Given that the previous month’s meeting minutes had highlighted the CPI-performance as a key issue for more than a few Fed members this was taken as a rate hike-delaying comment, doing further damage to an already gaunt greenback.

The news helped cable briefly surge above $1.315 for the first time since September last year, before settling slightly below that landmark level. This led to a muted start from the FTSE, though the weight of the pound’s gains is being somewhat negated by a largely positive morning for the index’s reporting companies.

Guinness-owner Diageo (LON:DGE) rose 5% as it revealed a £1.5 billion share buyback programme; Anglo American (LON:AAL) jumped 3.3% after restarting its dividend 6 months ahead of schedule; and Rentokil Initial (LON:RTO) was up just shy of 4% thanks to an absurd 637% increase in pre-tax profit. There were also positive statements from Shell (LON:RDSa), Relx (LON:REL), Schroders (LON:SDR), Smith & Nephew (LON:SN) and a currency tailwinds-boosted British American Tobacco (LON:BATS).

It wasn’t all good news, however. Even though it posted its best half year profit in 8 years, Lloyds (LON:LLOY) fell around 1.5% after revealing it had to set aside another £700 billion to cover the latest round of PPI claims. AstraZeneca (LON:AZN), meanwhile, dove off a cliff, plunging a stomach-churning 16% following the failure of a key lung cancer trial.

Like the pound, the euro has greatly benefited from the dollar’s sour summer, hitting a fresh 2 and a half year high in the aftermath of the Fed announcement, only to dip back under $1.175. The currency’s muscular showing continues to be a problem for the DAX, which slipped 0.2%, but less so for the CAC, the French index rising 0.5%.

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.

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Strong Earnings Can’t Help FTSE As Cable Hits Fed-Aided 10-Month High
 

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Strong Earnings Can’t Help FTSE As Cable Hits Fed-Aided 10-Month High

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