By Samuel Indyk
Key points
- FTSE shines as oil and airline stocks rally
- Dow back at record high
- GBP rally fades for now, GBP/USD below 1.4100
- WTI and Brent march higher
- Bitcoin decline slows, Square (NYSE:SQ) and MicroStrategy Incorporated (NASDAQ:MSTR) announce purchases
Investing.com – The FTSE 100 traded higher on Wednesday, led by airline and oil & gas stocks. International Consolidated Airlines Group S.A. (LON:ICAG) was near the top of the index as demand for holidays begins to pick up ahead of the anticipated grand reopening of the economy. easyJet (LON:EZJ) and Ryanair Holdings PLC (LON:RYA) shares were also flying higher.
At the top of the FTSE was BP (LON:BP), with Royal Dutch Shell (LON:RDSa) not too far behind as oil prices continue to trade higher. The rally in crude prices comes despite an unexpected increase in US stockpiles during the latest week. The Department of Energy said inventories rose 1.28mln barrels, compared with expectations of a draw down of 5.19mln barrels.
However, there continues to be shouts for higher oil prices, with Azerbaijan’s Socar Trading predicting Brent crude prices could reach $100/barrel in the next 18-24 months. Analysts at Bank of America also said they see potential spikes into triple digits over the next few years.
FX & Crypto
GBP/USD jumped higher in Asian trade to new multiyear highs above 1.4200. The recent announcement from Prime Minister Johnson on the roadmap out of lockdown supported the currency and some have suggested that he may have been too cautious. The Telegraph reported that the roadmap could be accelerated if the data on vaccines is better than expected, but the government has been quick to play down the rumours.
Bitcoin's recent declines have halted although the world’s largest cryptocurrency trades below $50,000 after breaking above that level last week. During their earnings announcement yesterday, US listed payments company Square announced they had bought $170mln worth of bitcoin. On Wednesday morning, MicroStrategy said they had bought an additional $1bln of the cryptocurrency at an average price of $52,765 per bitcoin. The corporate demand for bitcoin continues to support the prices.
Cathie Wood, the current star fund manager of Ark Investment Management, also gave her support to bitcoin. In an interview on Bloomberg TV, Wood said she was “very positive on Bitcoin, very happy to see a healthy correction here.