market relief

The FTSE 100 is eyeing a record high as the basic resource stocks are forming the foundation of the rally, and the British equity benchmark is being slightly held back by supermarkets.

Marks & Spencer shares are in the red today as the UK business saw like-for-like (LFL) sales for the 13 weeks until the end of December dip by 1.4%. The food division saw sales fall by 0.4% while the clothing and home sales operation posted a 2.8% fall in revenue. The retailer stated that ‘tighter budgets’ by consumers hit their sales. The share price is down 5.5% and has been in decline since May, and if the negative sentiment continues it could target 290p.

Tesco had a solid third-quarter and Christmas, but the figures failed to meet expectations. Over the festive period LFL sales rose by 2%, but analysts were expecting a reading of 2.8%. Online sales ticked up by 5% and that helped contribute to the record Christmas volume which over 4 million transactions. Shares in Tesco are down 4.6% on the back of the figures.

GBP/USD fell to the lowest level this month as the firmer US dollar sent sterling into the red. The greenback is bouncing back as yesterday’s story that China is considering trimming its purchases of US government bonds has been revealed as ‘fake news’. The pound may have started off the year on the wrong foot, but the wider upward trend is still in place

EUR/USD is also weaker on account of the stronger US dollar. The German economy grew by 2.2% on an annualised basis, which was a big improvement on the previous reading of 1.9%, but below the consensus of 2.4%. Germany has been performing very well lately, which has helped the euro reach the levels it is at.   

At 1.30pm (UK time) the US will announce the latest jobless claims report and traders are expecting a fall to 245,000 from 250,000.

We are expecting the Dow Jones to open up 20 points at 25,389, and we are calling the S&P 500 up 2 points at 2750.

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