Friday, 13th May: Yesterday Mark Carney warned of a recession in the UK should voters elect to leave the EU. Today, a report has been published by the International Monetary Fund (IMF) warning that a leave vote will lead to weaker economic growth, whilst house and share prices will ultimately fall. They also warned that a Brexit could erode London’s status as a global financial centre whilst citing research showing that the economy could be between 1-9% smaller over the long term compared to the UK staying in the EU.
US retail data was released this afternoon, showing that sales at retailers and restaurants grew at its fastest pace in more than a year in April. Overall retail sales grew by 1.3% (0.8% expected), demonstrating that the economy was recovering from the slow start to 2016. The data comes despite retailers such as Macy’s reporting weaker first-quarter sales this week. The US dollar strengthened on the back of the data release as sterling dropped to a 3-week low of $1.4359. GBP/USD is currently -0.60% at $1.4358, slightly above its intra-day lows.
Following the release of their Annual Report today. it has been revealed that Tesco boss Dave Lewis has been paid a bonus of nearly £3m for his role in helping the UK supermarket return to profit. The shares initially fell slightly at market open but gathered speed over the course of the day to finish at the top of the FTSE 100, +3.89%. Year-to-date the shares are c.+15%, falling below the +40% gains they achieved in March.
No Friday 13th superstitions in Europe today as the UK, Germany and France all ended in the green; the FTSE 100 ending +0.56%. The index is down 0.8% month-to-date. Brent oil has gained slightly today and is +25% quarter-to-date. At the time of writing both the Dow Jones and S&P 500 are trading slightly in the red.