Morning Update Note
Friday 22nd January 2021
- US equity markets were mixed on Thursday after reaching new record highs in the previous session on Inauguration Day amidst a wave of executive orders from the new President Joe Biden.
- The Dow Jones Industrial Average closed 0.04% lower to 31,176.01. The broader S&P 500 crept up 0.03% to finish at 3,853.07 while the tech heavy Nasdaq saw out the session 0.55% higher to 13,530.92.
- As US total confirmed covid cases passed 25 million and the death toll over 415,000, Biden outlined ten executive orders targeting increased PPE production and faster vaccination rollout with further funding to local officials.
- On the macro front, US jobless figures were down 26,000 for the week ending 16th January.
- Figures from Philadelphia Federal Reserve Bank were encouraging with the manufacturing index hitting a yearly high, rising to 26.5 ahead of estimates of 12. Likewise, the shipments index was up 11 points to 22.7 in January and the new orders index climbed to a 3 month high at 30.
- The Department of Commerce released figures showing that new home sales rose 5.8% on a month-on-month basis in December.
- In stock news, tech-giant Intel Corp gained 6.46% as it released strong Q4 numbers.
- Apple gained 3.67% as Morgan Stanley lifted its price target 5.55% from $144 to $152 in anticipation of good figures next Wednesday.
- European stocks slumped on Thursday, with ECB Chief Christine Lagarde announcing that interest rates and its stimulus package would remain unchanged.
- The 1.85 trillion Euro ECB Pandemic Emergency Purchase Programme was previously extended to March 2022.
- Growth forecasts from the ECB also remain unchanged, with 3.9% GDP rate for 2021 and 2.1% 2022 estimated.
- The Stoxx 600 was flat, ending 0.01% higher to 410.89.
- Mediterranean indices retreated, with the Italian FTSE Mibtel lost 0.98% to 22,428.93 whilst the Spanish Ibex 35 fell 1.00% at 8,122.10.
- London stocks also closed in negative territory. The FTSE 100 ended the session down 0.37% to 6,715.42 while the FTSE 250 was 0.42% weaker at 20,793.72.
- Sterling rose 0.46% against the US Dollar and 0.18% against the Euro.
- In equity markets, IG Group dropped 8.47% despite posting record interims. The company announced a $1bn deal to acquire American broker Tastytrade as it looks to expand in the US.
- Sainsburys and Ocado were up 2.00% and 2.98% respectively as Berenberg raised their price targets.
- Pets at Home rose 2.18% as it maintained its strong outlook for annual results with an 18% increase in Q3 revenue as the pandemic-fuelled pet boom continued.
- Asian stocks fell in Friday morning trading following a resurgence of covid infections in China and Southeast Asia.
- China reported 103 new infections on Friday. The nation has reimposed travel restrictions after outbreaks in Beijing and Shanghai.
- The resurgence of the virus and new variants that may be more infectious are worrying ahead of the Chinese New Year holidays next month.
- In Japan, the Nikkei 225 was 0.44% weaker, whilst the Chinese Shanghai Composite and Hong Kong Hang Seng fell 0.40% and 1.62% respectively.
- Elsewhere, the South Korean Kospi fell 0.64%, the Australian S&P/ASX 200 dropped 0.34% and the Singapore STI 0.95%.
- 10yr and 30yr US treasuries are currently trading at 1.10% and 1.86% respectively.
- 10yr UK gilts trade with a yield of 0.33%.
- German 10yr bund yields trade at -0.49%.
- 10yr Italian and Spanish bond yields trade at 0.71% and 0.14% respectively.
- The WTI crude oil price is $52.50
- Brent crude is $55.52
- The gold price is $1,859.60
- The silver price is $25.56
- The COMEX copper price is $3.61
– One pound buys:
- 1.36 USD
- 1.12 EUR
– One dollar buys:
- 103.66 JPY