The big two-day rise in stock markets flattened out on Thursday as investors keep half an eye on the first day of the G7 summit. A rise in energy and mining shares after Brent crude oil surpassed $50 per barrel was proving just enough to offset a broader bout of profit-taking.
The FTSE 100 was neutral by mid-morning after a second estimate of the UK’s GDP in the first quarter remained at 0.4% q/q. On the FTSE 250 shares of Debenhams gained after news it had poached a director from Amazon as its new CEO.
Besides vague summations that higher US interest rates and can-kicking in Greece are helpful to banks, there’s hasn’t been too much to justify to move higher this week. The risk is that markets rollover under their own weight
Oil breaking $50 per barrel from the first time in 2016 and a slight backtracking of the US dollar has helped a rally across commodities and a positive read-across to UK mining shares. Anglo American, BHP Billiton and Glencore were all seeing gains in excess of 3% on the day.
Sterling came off its highs leaving it roughly flat for the day after UK GDP growth was again seen at a more modest 0.4% q/q growth. The more recent retail sales data suggests individual spending habits haven’t been affected by the Brexit vote. The 0.5% fall in business investment last quarter would imply businesses are being more cautious ahead of the referendum That caution is sure to have slipped into the current quarter and may well be enough to trigger another slowing of the economy.
US stocks look set to open flat to slightly higher ahead of durable goods data, Fed speakers James Bullard and Jerome Powell and earnings from retailers Dollar General, Dollar Tree, Gamestop and Abercrombie and Fitch.
USA pre-opening levels
S&P 500: unchanged at 2,090
Dow Jones: 7 points higher at 17,858
Nasdaq 100: 3 points higher at 4,479
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