Bluechip stocks have largely held their recent gains this morning, as theFTSE continues to flirt with 6600 ahead of speeches from Mario Draghi and Mark Carney later today.
The key driver appears to be a belief in some quarters that the Fed will push back their asset purchase tapering to October or beyond
in light of the worse than expected US employment data we’ve seen in the last couple of months.
With much of the talk on this side of the pond around the Bank of England’s likely inability to keep a cap on rates for as long as they previously stated,
there is some contrast in current sentiment between the pound and US Dollar, which has seen cable push up to the 1.58 level in recent sessions.
Back on the equities front a trio of earnings reports in the retail space have grabbed investors’ attention early on, with WM Morrisonsitting pretty at the top of the index.
The supermarket group sees their stock forging new highs, up over 4% despite missing estimates on like for like sales as traders take their lead from confirmation that the firm will launch their online offering as they see the future for the sector in the convenience of cyber groceries.
The fact that the market now values loss-making delivery firm Ocado in excess of £2.1bn
suggests someone out there agrees. I distinctly recall scoffing at Ocado’s £1bn valuation earlier this year and demanding to know who was paying 180p per share for negative earnings. They’re 377p now and it’s a good thing I don’t run a short equities fund or I would currently be sat in a padded room rocking back and forth whilst softly whispering ‘they don’t even break even’ to myself over and over.
More explicably Home Retail Group
are up making fresh two year highs this morning as sales at their key Homebase and Argos brands beat analyst estimates.
Exane saw the numbers as ‘encouraging’ and it seems most investors are of a similar view, pushing the stock up as much as 7% at one stage.
The darling of the London market Next
are making another all-time high early on after earnings rose 8.2% during the reporting period.
Despite a 400% rise in the share price over the past 5 years, the stock remains on a sensible valuation of 15 times earnings. Compare that to Ocado and (calm down Matt, take your medicine, there you go…shh…shh…)
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