Wednesday, 31st August: On the final trading day of August, despite closing the day in the red the FTSE has been able to extend its run of monthly gains. The index ended Wednesday -0.58% as miners weighed on the blue-chip; Fresnillo suffering the most in the sector, trading lower by 4.97% at the close. These falls in the sector came on the back of a fall in Brent oil, trading lower $47.20 at the time of writing as fears of oversupply in the market continue, paired with the ever strengthening US dollar. Despite today’s falls Brent is c.12% higher for the month. Randgold Resources have suffered more so as the green note adds to its strength: the stock has fallen by c.20% in August whilst Gold (known for its “safe haven” status) itself has fallen by more than 3%.
Nearly 10 weeks have passed since the EU Referendum vote was decided and latest UK data today reveals that confidence hasn’t been shattered as much as expected as house prices rose by 5.6% in August vs a year earlier. This is compared to a 5.2% rise in July vs the prior year. The UK building society Nationwide also said house prices rose by 0.6% compared to July, resulting in the average cost of a home to be £206,145. However, the increase in house prices has largely been driven by a shortage of homes available on the market and the overall outlook on the housing market depends more so on the longer-term impact on the economy following the decision to leave the EU. Only yesterday the Bank of England (BoE) revealed that mortgage approvals fell to their lowest level since January 2015.
As investors eagerly await US non-farm payrolls on Friday the ADP report (often seen as the warm up act for jobs data) rose in line with expectations, despite weakness in manufacturing and construction. In all, companies added 177,000 positions in August, slightly below the 179,000 added in July. Jobs data on Friday is to be looked at with great importance as several Fed members have hinted for a rate rise at the next September meeting.