FTSE boom continues

The FTSE continues to push higher, with supermarkets in particular feeling the benefits of earnings season.

• FTSE hits new high, despite initial weakness

• Commodity stocks benefit from rising metal prices

• Supermarkets on the rise after impressive Sainsbury’s data

The FTSE has had a bit of a mixed morning, with initial losses soon turning into gains as we once more see the index hitting a record high. The incredible bullish sentiment seems to be borne out of a concoction of a weak pound, loose monetary policy, rising commodity prices and expectations of increased US fiscal stimulus.

This week’s sharp rise in Chinese PPI points towards strength in commodity prices, which has been followed up in style, with the likes of copper, gold and iron ore proving enough to drive substantial gains for names such as Anglo American and Antofagasta. Elsewhere, UK supermarkets seem to be in rude health following bullish statements from both Morrison’s and Sainsbury’s. While Sainsbury’s remains uncertain over the impact the falling pound will have upon future margins, the firm reported positive growth in like-for-like sales and total retail sales. However, the headline grabber was the 4.1% increase in total sales and 4% rise in like-for-like sales for Argos compared with last year. This goes a long way to proving that there could yet be significant value in the Argos purchase despite the integration process being at its infancy.

After Obama’s emotional farewell last night, we await a speech from his successor. With a light macro calendar this afternoon it will be the main event of the day, especially given the press coverage overnight. Ahead of the open we expect the Dow Jones to open 29 points higher, at 19,884.