Everyone gets a rally, except for ABF
|In mid-morning trading the FTSE 100 is 100 points higher, as the sell-off seen on Thursday morphs into a broader rebound.
- Investors see opportunity amid the gloom
- Lack of Huawei news helps matters
- Primark stumble means ABF is out of favour
European and Asian markets have taken heart from a robust rebound last night in the US that saw the Dow Jones claw back a whopping 700 points from the lows. The overall put/call ratio, a handy short-term measure of sentiment, has swung from bullish to bearish in the space of a week, returning to the levels seen at the low in November. Given that the S&P 500 has once again defended the lows around 2620, it looks like there are still plenty of hardy souls willing to buy in. The lack of any development in the Huawei issue has calmed sentiment too, although we would be foolish to think it had gone away. Investors remain skittish however, so we should expect the heightened volatility to
continue, and the jury is still out on whether this is a re-run of 2015/16 or a new 2008.
The FTSE 100 is almost uniformly higher this morning, which is not surprising given the washout in equities over the past few days; just 7% of the index is above their 20-day moving averages, a level that normally suggests we will be treated to a bounce in the short-term at least. But one left out of the rally is Associated British Foods, and with a warning of further challenging trading at Primark it is not hard to see why. If even Primark is suffering, then the UK high street is in real trouble.
Ahead of the open, we expect the Dow to start at 24,826, down 121 points from Thursday’s close.
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