Equity markets have cooled after their positive run lately and the political uncertainty surrounding Donald Trump is certainly giving traders a reason to cash in their chips.
Investors have high hopes for Mr Trump’s vision of the US, but the latest scandal puts his plans on hold at the very least, or may not see them implemented at worst. Recently we have witnessed a steady creep higher in global stock markets, but without concrete economic data to back it up dealers are quick to cut-and-run now that there has been a spike in speculation that time is running out for ‘The Donald’.
Shares in Lloyds are higher this morning after the UK government sold off its final stake in the bank, retuning the company to private ownership. The exchequer has already been reimbursed for the bailout through dividends, and the government is set to make a profit on the deal overall. Some critics point out the opportunity cost of interest that could have been earned on the bailout money, but the much-needed financial stability that was needed in 2008 was well worth it.
British Land is in the red this morning despite revealing solid figures. Net asset valuations (NAV) fell fractionally to 915p, but came in well ahead of the expectations of 853p, and the increase in dividend may entice some dealers to buy-the-dip.
The pound climbed against the US dollar after the UK unemployment rate dropped to 4.6%, beating the expected reading of 4.7%. Falling unemployment and rising inflation from the UK will keep the pound in demand.
In the US, we are expecting the Dow Jones to open 121 points lower at 20,858, and we are anticipating the S&P 500 to open at 2386, which is 14 points below last night’s close of 2400. In terms of corporate earnings from the US, Target and American Eagle Outfitters are the ones to watch today. Traders will be keeping an eye out for the Energy Information Administration (EIA) report at 3pm, the consensus is for oil inventories to fall by 2.5 million barrels.
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