Recovery stocks propel FTSE higher
|The new month has begun with healthy gains for indices, with the FTSE 100 up 70 points as it heads towards the close.
- FTSE 100 makes solid gains
- ECB & NFPs to underscore current narrative
- Bounceback stocks lead FTSE 100 higher
Asian and European markets have enjoyed a strong start to the month, but so far Wall Street is being a little more tentative. It seems odd to think that the market can remain so confident about a return to normality when the wall of bad Q2 data, especially GDP data, is still some way off, but perhaps the answer to this conundrum lies in the events towards the end of the week, namely the ECB meeting and the latest monthly non-farm payrolls report. The first should see an increase in monetary stimulus, in the form of the ECB’s PEPP, while the second, while still expected to show a loss of jobs numbering in the millions, will be much improved from last month’s catastrophic figure. Data will get better, or ‘less worse’ at least, from here, but stimulus programmes remain in place. Those expecting a further downturn in stocks will continue to beat their heads against these two pillars.
The theme to today’s winners on the FTSE 100 is ‘rebound’, with Associated British Foods leading the charge after its hopeful update this morning, boosting Next as well on hopes that retail may start its own bounceback soon. Throw in Carnival and IAG on hopes of a return to more international travel, plus Standard Chartered thanks to diminished US-China concerns, and we have the makings of a solid recovery for the index that looks poised to carry the index back towards last week’s highs and on from there.
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