The FTSE 100 has retained its place at the top of the tree, rising almost 1% while other indices post small gains or struggle to move higher.

  • Carnival update provides hope of further rebound
  • Big boom expected from US stimulus efforts
  • Crude oil continues to struggle

A mixed start to the day has turned into a marginally positive one for indices, although the sense of a rally low on fuel still persists. In a further sign of good news however, Carnival said that advance bookings remained strong, while its cash burn has also decreased. In the thin period before earnings season kicks off next week such updates are the most investors can hope for, aside from the daily monitoring of vaccine progress. JPMorgan’s chief executive Jamie Dimon has also caught the mood of the moment, noting that the US government’s huge stimulus programmes should provide the fuel for a boom in that country that will inevitably spill over into the rest of the world. It would be nice to see this action coordinated with big initiatives in the UK and the eurozone, but for now a US-only effort will have to suffice. This could spark a renewal of the move into cyclical sectors which has slackened of late, as the global policy outlook shifts away from the monetary policy-driven world of low rates that has proven so beneficial for tech and other high growth names. 

The continued weakness in the US dollar has done little for oil, which has struggled to rally all week as investors revise their view on the outlook for stronger demand. From the one-way move of November – February the picture has changed dramatically, investors now expecting a softer outlook for crude that calls the recent gains into question. Continued vaccine uncertainty also poses problems, and points towards further near-term indecision, if not further weakness, for oil. 

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