Wednesday, 1st June: Equity and forex markets spent the first trading day of June in the red as a shock poll yesterday showed the leave campaign gained momentum and a greater support to leaving the EU than to remain. The pound took a beating, weakening its stance more so as it fell nearly 1% against the Euro and more than half a percent vs the US dollar. Sterling reached a 2-week low against the green note and at the time of writing stands at $1.44. 22 days until the referendum – expect further over the course of June.
As the results of the June 23rd referendum will be digested, Donald Trump will be on his way to the UK (more-so Scotland) as he attends the official opening of the revamped Open venue, Trump Turnberry in Ayrshire on June 24th. The US billionaire and Republican nominee bought the hotel and golf course in 2014 and it is set to be reopened following a £200m refurbishment.
The FTSE 100 fell to lows of 6,151 points in afternoon trading, dragged lower by Wolseley who today said their fourth quarter performance had started slower than expected. The trade distributor of plumbing and heating products to professional contractors continue to experience an adverse impact of commodity deflations, more so in the US. Barclays have consequently 2017 estimates as weaker trends the group experienced in 2016 continue to be evident over the forthcoming year. Wolseley ended the day -5.5% after reaching 2016 intra-day highs yesterday.
The Institute for Supply Management said its index of manufacturing (in the US) activity rose to 51.3 in May, an increase from 50.8 in April. As usual, a reading above 50 demonstrates that factory activity is expanding and this latest data release signals the manufacturing sector could be stabilising as the pressure of a strong US dollar and lower oil prices start to subside. It is the 3rd consecutive month the sector has been expanding, following 5 months of contraction.
It was a sea of red across Europe at the close as the FTSE, CAC and DAX all ended lower by 0.62%, 0.67% and 0.57% respectively. In the US the S&P 500 is trading so slightly lower (-0.04%) whilst the Dow Jones is down 57 basis points. Brent Oil has spent much of the day lower ahead of the OPEC meeting in Vienna tomorrow, currently $49.87 a barrel.