Wednesday, 26th September: A negative end to US indices yesterday did little to deter many Asian equity markets, with many recording gains as focus turned to the US Federal Reserve later today. European indices were mixed at the open; the FTSE 100 giving up marginally gains to end the day +0.05%. Sterling enjoyed the week’s hump day with a rare day off from Brexit talk. To say the pound made gains against the euro and dollar would be a slight exaggeration, but the lack of red was pleasing to see. GBP/USD lies flat at the time of writing, with a +0.05% against the euro moving it to €1.121.
Main stock stories came from online retailer Boohoo recording strong first half sales, allowing the the group to upgrade its full year guidance. First half pre-tax profits rose 22% as the group’s core three brands all reflected growth over the 6-month period. Shares recorded a double digit rise on the AIM index, closing +11.22%. On the flip side, the breakdown recovery group AA reported a fall in first half profits, as expected, with operating profits falling 35%, the UK’s earlier harsh weather put to blame for higher costs. Revenues rose 2%, reflective of a 7% rise in car insurance policies, offset by a 2% fall in roadside members. A fall in interim dividend completed the update, resulting in shares falling 13.68%.
US equities continued their bullish tones ahead of the Fed’s meeting later today. Jerome Powell is expected to signal a further rate rise, the third of the year, with a fourth expected at the December meeting. It will be the region’s seventh rate rise since December 2015, although spectators will be looking for comments on the direction and speed of potential 2019 rate rises. President Donald Trump has in recent months had his say on the US’ rate rise, and the effect on the dollar. However, last night, Trump didn’t quite get the reaction he expected after claiming the US had “accomplished more than almost any administration in the history of our country” in his two years of presidency. The comment was received with a room full of laughter from UN members, much to Trump’s displeasure. His UN attendance has continued today with an exchange of taunts between him and Iranian President Hassan Rouhani as well as accusing China of trying to interfere in US elections. Just another Wednesday for the POTUS.