Tuesday, 11 September: Markets have continued their mixed run of form this week. Japan’s Nikkei has begun with strong back to back sessions after going on a 6-day loss streak, today closing +1.3%. Global markets remain wary towards the next move in the trade spat between the world’s largest two economies, the US and China. This was reflected across European bourses today; London shares were held back on a firmer pound as well as surrounding trade tensions. Although in the end the pound reversed these early moves after people became sceptical about the deal’s optimism that was floated yesterday. All in all a further continuation of the Brexit saga and very much demonstrating nothing is done until pen is put to paper, which is quite clearly still a way off. Elsewhere European indices were rightly cautious, and we have seen the majority of bourses close the day in the red.
Ashtead shares topped the FTSE 100 index after Q1 results came in well ahead of expectations, which has also prompted management to raise full year guidance. Certainly, the currency translation effects of a weak pound versus the dollar is a major factor as well as positive market conditions for the equipment hire specialist. Shares closed the day 5.18% higher. Elsewhere in London there wasn’t a huge amount of company’s news, but miners were amongst the worst performers on Tuesday. JD Sports did release their latest set of numbers today, and they continued to defy the struggles of many other high-street peers. Results showed a further climb in sales and their recent entry into the US (world’s largest athleisure market), continues to provide further scope for growth. Shares closed 6.5% higher.
Despite transfer deadline day being firmly shut, one of the most important contract negotiations over the summer has finally been decided today, with Mark Carney confirmed to remain as Bank of England governor until the end of January 2020 to help Britain’s departure from the EU. This means he will have roughly extended his stay by over a year and a half. The call for consistency at a time where everything else remains up in the air is a big bonus for both the economy and negotiators, on top of the fact the lack of suitable replacements made retaining the Canadian even more important. Whether he remains favoured by economists and politicians is almost besides the point, with his extension deemed more important and certainly a move that poses less risk. Sorry Canada, he’s not coming home yet.
Further into the day’s session, sterling reversed gains as mentioned and underlying wage growth data wasn’t enough to boost the currency. It currently sits 0.25% lower against the dollar. This afternoon Wall Street has also reacted well to the news that China has approached the WTO about imposing sanctions on the US. As we write both the Dow and S&P 500 have made modest gains of circa 0.3%. The news that Ryanair pilots would commit to a short notice strike disrupting flights to Germany also sent the budget airline’s shares 1.2% lower this afternoon, with 150 flights expected to be cancelled tomorrow.