FTSE outperforms despite disappointing retail sales

Today’s market lull has seen the FTSE 100 outperform many of its peers, with the rise in oil prices helping the commodity heavy index trade in the green. Meanwhile, US earnings are likely to continue to drive US stocks higher despite a tentative start.

• UK in the green despite weak retail sales figures
• Crude spikes to new four-year high, with Saudi Arabia likely to drive it higher yet
• Today’s weakness unlikely to be anything more than a breather

The FTSE 100 is outperforming many of its competitors as a downbeat start to US trade sees American indices join the likes of the DAX and Ibex in the red. A week of economic data out of the UK has certainly has a noticeable effect for pound, with today’s attempted recovery coming despite disappointing retail sales figures across the board for March. There is no doubt that the weather effects will partially account for this decline in retail sales, yet this fall helps contribute to a worrisome wider story of declining consumer activity over the past 16-months.

Crude has been one of the big outperformers of the week, with Brent and WTI hitting the highest level since late-2014 amid shrinking US inventories and Saudi led supply restrictions. Tomorrow sees a host of energy ministers from some of the most influential oil producing nations meet in the Saudi city of Jeddah, heightening anticipation of what could be yet another production freeze/cut extension in the offing. Crucial to the crude story is the fact that we remain some way from the Saudi Aramco IPO date. Until the price for the IPO is set, we are likely to continue seeing the Saudis transmit their desire for a huge Aramco windfall into a short term manipulation of oil prices.

Despite today’s weak showing across much of Europe and the US, this seems more like a breather for stocks rather than the beginning of a wider market reversal. A host of better than expected earnings figures from the US have helped drive a more optimistic story of late, with markets turning away from the recent Trump-led Syria/China anxiety. The China issue may not be gone, yet for now we are seeing the habitual outperformance in US-listed stocks help drive home a more optimistic tone for global markets.