Recovering from their panicked trading by the end of Wednesday, investors chose to buy into Trump’s trade optimism, allowing the markets to push higher at the start of Thursday.
It appeared Trump’s claim that a deal with China could arrive sooner than people think outweighs any other destabilising factors surrounding his presidency, namely the threat of impeachment relating to the Ukrainian scandal. The European markets finished up Wednesday essentially flat, while the Dow Jones managed to climb back towards 27000.
That left the likes of the FTSE and co. in pretty decent shape this morning. The DAX, still yet to recover its manufacturing-related losses, nevertheless rose 0.2% to strike 12250, while the CAC climbed 0.3% to graze 5590.
The FTSE was the best performer, re-crossing 7300 thanks to a half a percent increase – this despite a terrible Thursday for two of its components. Pearson (LON:PSON) plunged 16% after issuing a profit warning related to a weaker-than-expected performance from its US higher education coursework arm. IAG (LON:ICAG), meanwhile, lost almost 4% after revealing operating profit will be €215 million lower year-on-year, in large part due to the €137 million cost of September’s 2-day pilot strike.
More important to the UK index, however, is, a) the Trump trade stuff, and b) the perilous state of the pound. Though the currency avoided further losses this Thursday – for now, anyway – Wednesday’s election-fearing fall caused cable to hit a 2-week low of $1.235, while forcing sterling under €1.129 against the euro.
Looking further ahead to this afternoon and the data-highlight is the final Q2 GDP reading out of the US, one that is expected to hold at the 2.0% estimate produced at the last reading.
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