- FTSE 100 up 70 points
- US riding higher
- Bitcoin bounces back
5.10pm: Positive morning on Wall Street helps FTSE to the finish
The FTSE 100 ended Thursday up 70 points, 1%, at 7,020, and the FTSE 250 added 157 points, 0.7%, to 22,392.
“What a difference a day makes,” IG Senior Market Analyst Joshua Mahony wrote. “Financial markets have gone from a sea of red to one of overwhelming optimism, with the Nasdaq and DAX leading the charge.”
Speaking of, the US tech-focused exchange was up 207 points, 1.6% to 13,507 at midday. The Dow gained 241 points, 0.7%, to 34,137, and the S&P 500 rose 42 points, 1%, to 4,158.
“The resurgence in Bitcoin has helped bolster Tesla and Coinbase valuations, in turn helping an already positive move for the Nasdaq,” Mahony wrote. “Meanwhile, Elon Musk has finally taken to his Twitter in a constructive manner, with plans to stage a new Tesla Model S Plaid event in June bringing hope of a resurgence for the stock.”
Also, unemployment claims came in at 444,000 last week in the US, lower than the 452,000 claims expected.
3.57pm: Commodity companies slip back
The better than expected US jobless claims and a revival in Bitcoin seem to be giving markets some support after an uncertain start to the day.
Meanwhile a big miss on the Philadelphia Federal Reserve manufacturing index – down from 50.2 in April to 31.5 in May and below forecasts of 40.5 – also helped, suggesting that the US central bank’s accommodative stance could carry on for longer than some feared.
The FTSE 100 is up 0.48% or 33.49 points at 6983.69, while the Dow Jones Industrial Average has added 143 points or 0.42%. The S&P 500 is 0.79% better and the Nasdaq Composite has climbed 1.15%.
Among the risers in the UK blue chip index, Scottish Mortgage Investment Trust PLC (LON:SMT) is up 2.67% to 1153p. The trust is heavily invested in US tech, and so is benefitting from the rise in the Nasdaq. As is software group Sage PLC (LON:SGE), up 2.86% at 675.2p.
Spirex-Sarco Engineering Group PLC (LON:SPX) has added 1.84% to 12,160p after a presentation to investors on Wednesday,
Meanwhile after Wednesday’s crypto craziness which saw Bitcoin lose 30% of its value and fall to US$30,000, it has recovered some ground and climbed as high as US$42,000, a near 21% gain on the day.
Michael Hewson at CMC Markets said: “After yesterday’s shenanigans European markets have rebounded quite strongly, setting aside yesterday’s concerns over cryptocurrency volatility and the US central banks stance on inflation to [move] higher, and mark a welcome respite to the declines of the last couple of days.”
2.42pm: Wall Street starts on the front foot
The main indices on Wall Street defied previous expectations to start higher on Thursday after a better than expected US jobless claims data.
In the early minutes of trading, the Dow Jones Industrial Average was up 0.15% to 33,947 while the S&P 500 climbed 0.42% to 4,132 and the Nasdaq rose 0.66% to 13,387.
Back in London, the FTSE 100 had lost a few gains in late afternoon but was still up 23 points at 6,973 at around 2.40pm.
2.10pm: Jobless claims set to continue to fall
The fall in jobless claims to a new pandemic low seems to have revived US markets. A little at least.
The Dow Jones Industrial Average is now forecast to dip just 0.09%, while the S&P 500 and Nasdaq Composite have both edged into positive territory.
The fall in Americans claiming benefits could continue in the coming weeks, partly because Republican governors in at least 21 states said they would withdraw next month from unemployment programs funded by the federal government, including a weekly $300 subsidy.
1.42pm: US benefit claims best since March 2020
US weekly jobless claims have come in better than expected.
The number of Americans making initial claims fell by 34,000 last week to 444,000, compared to expectations of a decline to around 453,000.
This is the lowest since March 14 last year.
The previous week’s figure was revised up by 5,000 to 478,000.
The four week moving average fell by 30,500 to 504,750, again the lowest since March 14 2020.
— LiveSquawk (@LiveSquawk) May 20, 2021
So far the figures have eased some of the falls on Wall Street, with the Dow Jones Industrial Average now expected to open around 0.28% lower, while the S&P 500 is set to fall 0.15% and the Nasdaq Composite is virtually unchanged.
In the UK the FTSE 100 has picked up the pace, and is now 31.56 points or 0.45% higher at 6981.76.
12.30pm: Investors await US jobless claims
Wall Street is expected to continue Wednesday’s declines as investors await the latest figures for weekly jobless claims.
The Dow Jones Industrial Average is forecast to open 143 points or 0.4% lower, while the S&P 500 is set for a 0.32% decline and the Nasdaq Composite is showing a 0.26% fall.
Technology shares are under pressure again after weaker than expected earnings guidance from networking hardware group Cisco.
Meanwhile the number of Americans signing on for unemployment benefits is expected to have dropped from 473,000 to around 453,000 last week.
Sophie Griffiths at Oanda said: “Last week’s strong reading eased labour market shortage concerns, which could put an upward pressure on wages.
“The last thing the US economy needs right now is more inflationary pressure. As a result, stocks rallied.
“Market participants will be watching these figures closely again today. A strong print could propel stocks higher. However, any signs of weakness could fuel rising inflation concerns and pull stocks sharply lower.”
The day also sees the debut on Nasdaq of Swedish oat milk brand Oatly (OTLY).
Its shares were set at around US$17 each, giving it a market capitalisation of some US$10bn.
12.08pm: Crude prices under pressure
Oil prices are down for the third straight session, with Brent crude 1.71% lower at $65.52 a barrel.
Sophie Griffiths at Oanda said: “Oil lost ground amid rumours of progress in Iran nuclear talks and as investors ditch riskier assets following the [Federal Reserve] minutes.
“The demand picture for oil remains mixed. On the one hand, demand in the West is expected to continue growing as the US, the UK and now Europe as it re-opens. Meanwhile, demand in Asia is being hit by further restrictions to mobility as COVID-19 cases continue to rise. India’s fuel demand is likely to fall further as additional restrictions to movement are imposed.
“Crude inventories are helping to support prices after inventories increased by a less-than-expected 1.3 million barrels last week. Analysts had pencilled in a 1.6-million-barrel rise.”
But the FTSE 100 is back above the water line, up 17.94 points or 0.26% at 6968.14.
11.14am: UK factories show best performance since late 2018
UK manufacturing output has seen its strongest growth for nearly two and a half years in the three months to May, according to the CBI’s latest survey.
UK #manufacturing output in the three months to May grew at the fastest rate since December 2018. Manufacturers anticipate output to accelerate further in the next three months #ITS pic.twitter.com/RbkS2c4vkg
— CBI Economics (@CBI_Economics) May 20, 2021
The survey of 272 manufacturers found that output volumes grew by 18% from 3% in April. There were increases in 12 of 17 sub-sectors, with growth driven by chemicals, electronic engineering, and metal products.
But for those worrying about inflation, there are more signs of concern:
Price growth is expected to pick up rapidly in the coming three months, with expectations at their strongest since January 2018 pic.twitter.com/ico7lK5Qs1
— CBI Economics (@CBI_Economics) May 20, 2021
Anna Leach, CBI Deputy Chief Economist, said: “Manufacturing activity rebounded this month, with strong improvements seen across total order books and output volumes. But firms are still feeling the chill as supply shortages fuel cost pressures, reflected in expectations for strong output price inflation in the coming quarter.”
The FTSE 100, which earlier hit a high of 6995, is off its best levels, slipping 5.63 points to 6944.57.
10.03am: Investors unimpressed with updates
It is not a day to disappoint the market.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown
‘’Trainline had been glimpsing light at the end of the tunnel as lockdown eased, but the government’s shake up of the railways has seriously pulled the breaks on prospects for recovery.
“Shares were down …in early trading as investors digested the serious implications the new changes could have on it business model
“A new state-owned body, Great British Railways will not only set timetables and prices but also sell tickets in England. The aim is to offer more punctual services and cheaper tickets but it puts Trainline’s dominance in the e-ticket space in question.
“70% of all digital fares are currently sold by Trainline, and despite the pandemic disruption which saw it pushed into a £100 million operating loss, Trainline kept investing in new personalised and go-location technology to win market share amongst customers.”
Its performance was boosted by a surge in parcel deliveries during the pandemic.
However costs have increased 9.2% and it has not provided revenue guidance for this year. It also indicated there has been a recent 2% dip in parcel volumes.
But a warning of supply problems has helped push its shares 1.3% lower to 371.4p.
One stock on the way up is credit reference group Experian PLC (LON:EXP), 3.33% higher at 2666p. It announced it had spent £25mln on buying back shares at an average 2567p each.
But that is not enough to stop the FTSE 100 slipping into the red. The index is now down 1.83 points at 6948.37.
9.42am: Ex-divs limit rises in leading index
The attempted recovery is being hindered slightly by a number of companies seeing their shares go ex-dividend.
Into this category come Tesco PLC (LON:TSCO), down 2.8% at 225.3p, GlaxoSmithKline PLC (LON:GSK), 1.13% lower at 1351p. packaging group Bunzl PLC (LON:BNZL) and Unilever PLC (LON:ULVR), off 0.29% at 4269.
9.33am: Market sees recovery – just
Leading shares are edging higher after Wednesday’s falls which were inspired by some crypto craziness and continuing fears of inflationary pressures.
But after the 1.2% decline, the recovery is not exactly convincing.
The FTSE 100 is up just 13.84 points or 0.2% at 6964.04.
Investors remain cautious ahead of the latest weekly US jobless claims and a UK manufacturing survey from the CBI.
Neil Wilson at Markets.com said: “Markets in Europe have opened broadly higher this morning as they recover some of the losses from the swathe of selling on Wednesday, whilst the Federal Reserve underscored it’s in no rush to tighten monetary policy, minutes from its April meeting showed.”
A recovery in Bitcoin is also helping, with the cryptocurrency up around 7% after crashing 30% at one point on Wednesday.
6.45am: UK markets expected to rally
The FTSE 100 looks set to rally at Thursday’s open after yesterday’s equity weakness and cypto-crash.
CFD and spreadbetting firm IG sees the London index rebounding around 60 points, making the price 6,997 to 7,000 with just over an hour to go until the open.
Wild swings in cryptocurrency prices aren’t particularly uncommon nevertheless Bitcoin’s crash down to US$30,000 before recovering to almost US$40,000 was sufficient to get the attention of even the most dismissive.
Cryptos weren’t the only volatile markets on Wednesday. The FTSE 100 had given up 1.2% by the close and US markets were dashed again.
Investors are caught in a no-man’s land of indecision between optimism over the economic reopening, and concerns over inflation and how it is being handling by the central banks, that’s according to CMC Markets analyst Michael Hewson.
“One of the narratives driving yesterday’s losses was concern that the Federal Reserve’s apparent lack of urgency over inflation could mean that they might be too late in the event prices suddenly start to run away to the upside,” Hewson said in a note.
The analyst added: “As we look ahead to the autumn it still seems likely the Fed will taper its $100bn a month bond buying program, assuming the US economy remains on track, and the market shouldn’t fear that, as it would suggest that the recovery is on track.”
On Wall Street, the Dow Jones dropped 164 points or 0.48% to close Wednesday at 33,896 whilst the S&P 500 ended 0.29% lower at 4,115. The Nasdaq was stronger, rallying to end the session only slightly lower for the day at 13,299.
The Russell 2000 small cap index meanwhile gave up 0.78% to close at 2,193.
In Asia, Japan’s Nikkei rallied 102 points or 0.36% this morning to trade at 28,151 whilst Hong Kong’s Hang Seng was 175 points or 0.6% lower at 28,417. The Shanghai Composite index meanwhile dipped 0.23% to 3,503.
Around the markets
The pound: US$1,4117, up 0.01%
Gold: US$1,874 per ounce, up 0.53%
Silver: US$27.81, up 0.76%
Brent crude: US$66.90 per barrel, down 2.6%
WTI crude: US$63.30 per barrel, down 3.3%
Bitcoin: US$39,993, up 2.43%
6.50am: Early Markets – Asia / Australia
Stocks in the Asia-Pacific region were mixed on Thursday as Japan’s exports rose 38% in April compared with a year ago, according to data from the country’s Ministry of Finance.
The Shanghai Composite in China fell 0.28% and Hong Kong’s Hang Seng index slipped 0.76%
In Japan, the Nikkei 225 gained 0.30% while South Korea’s Kospi fell 0.52%.
Shares in Australia surged, with the S&P/ASX 200 trading 1.12% higher.
Proactive Australia news:
Westar Resources Ltd (ASX:WSR) has kicked off its maiden reverse circulation (RC) drilling program at Gidgee South Gold Project in Western Australia as well as exploration at the Birrigrin Mining Centre which includes a DGPR survey over the Birrigrin line of workings and surrounds.
Lotus Resources Ltd (ASX:LOT) (OTCMKTS:LTSRF) has begun ore sorting test-work on ore from Kayelekera Uranium Project in Malawi with strong initial results revealing the potential to improve project economics.
Castillo Copper Ltd (ASX:CCZ) (LON:CCZ) (FRA:7OR) is buoyed by preliminary interpretations by a geophysicist consultant that reveal possible extensions to mineralisation at Big One Deposit within the Mt Oxide Project in northwest Queensland’s Mt Isa Copperbelt.
Firefinch Ltd (ASX:FFX) (OTCMKTS:EEYMF) (FRA:N9F) has achieved another milestone in the second stage of its ramp-up strategy with commissioning of the Morila Gold Mine comminution circuit in Mali, West Africa, using stockpiles as well as feed from Morila Pit 5.