Wednesday, 24 January: As we write sterling continues to climb, which meant it was a disappointing day for domestic bourses. The FTSE opened lower and slide further throughout the day, eventually closing 0.94% lower. The 250 didn’t escape either, closing 0.51% lower. Typically when sterling has a strong day the FTSE struggles to follow because of how many overseas earners populate the index. So as mentioned winners on the day included the pound and also precious metals, with gold 1% higher and silver 2.5% higher as we write. After the US had what has become a normal session yesterday, recording further records, they currently trade mixed with the Dow slightly higher and NASDAQ 0.2% lower after a strong session on Tuesday. The pound has breached the $1.42 level against the dollar for the first time since Brexit, helped by strong employment data released this morning. The UK unemployment rate dropped to 4.3% as a further 3,000 people found jobs in the three months to November. This is a 42 year low for the unemployment rate, on top of this wages grew at their fastest rate in the same period for almost a year. This wasn’t however enough in real terms, as inflation continued to outpace wage growth of 2.4% (lagging inflation at 3.1%).
In share specific news, London Stock Exchange shares topped the FTSE (bit of self promotion), after rumours of a takeover circulate. Miners Fresnillo and Randgold weren’t far behind after the rally we mentioned in precious metals. Sage reported organic growth of over 6% but saw shares fall by almost 6.5%. The organic growth was short of expectations, that were looking for a figure closer to 8%. IQE shares saw heavy losses almost reversed towards the back end of trade, after Apple have hinted production of the iPhone X will stop. IQE is involved in the facial recognition software. Mitie shares sealed the bottom of the FTSE 250, most likely because of the amount of articles it is popping up in being guilty by association with Carillion. Many investors fearful it is following a very similar path to the ‘former’ construction giant.