BoE hints at more policy action
|In mid-morning trading, the FTSE 100 is 30 points higher, as investors look to the BoE for more guidance on future stimulus.
- Bank of England leaves policy unchanged.
- Indices continue to edge higher.
- Superdry rallies after results.
An early start for the Bank of England was not quite the set of fireworks that many had been expecting, with no change in interest rates or QE, although with two committee members voting for more easing the dovish caucus is not entirely exhausted, and from the press conference hints it looks like we will get more QE in due course. Warnings of terrible economic performance this year have been followed by predictions of a moderate rebound for next year, but as companies around the globe are discovering, it is almost futile to predict what the next few quarters will look like. The end of lockdowns might bring a second wave, or they might not. A vaccine might arrive soon, or it might not. Whatever happens, the lasting economic damage will take years to repair, and from the look of corporate updates this morning we are closer to the beginning than the end. Still, stock markets have continued to eke out small gains so far today, continuing the generally optimistic theme of the week for equities, investors evidently being able to maintain their composure ahead of tomorrow’s key non-farm report.
Superdry has bounced 8% so far this morning as investors take heart from more positive elements in its trading update this morning. A renewed shift online will help offset reduced footfall in stores, but with more of its estate opening up there is hope that sales will recover later in the year. Assuming sales do see some improvement, the shares do appear to offer some upside, being down 75% from their highs earlier in the year.
Ahead of the open, we expect the Dow to start at 23,881, up 217 points from last night's close.
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