FTSE recovers from initial fall; US Retail sales in focus

After another shake up in the White House unnerved investors overnight, the FTSE started the day of the back foot. Rex Tillerson, Secretary of State was sacked by Trump, in the second-high profile ousting in just two weeks. Drawing parallels with Gary Cohn’s Departure, there were growing differences between Trump and Tillerson on the direction of foreign policy. With Tillerson, the voice of reason, out the door the assumption is that Trump is aiming for a more aggressive foreign policy.

Rotating door concerns at the White House saw the Dow Jones close 170 points lower, the S&P finish 0.6% down, whilst the Nasdaq snapped a 7-day winning streak closing 1% lower.

Miners lift FTSE

The FTSE has since showed signs of life, bouncing higher and leading its European peers as it finds support from the heavyweight mining sector. Better than expected industrial production data from China has helped boost the price of base metals, lifting the miners, with the likes of Anglo American, Rio Tinto and Glencore dominating the FTSE leaders board.

Morrison Supermarket to pay special dividend

Morrison's announced underlying profits of £374 million, beating expectations of £371 million. Revenue increased 5.8% to £17.3 billion. Net dent was down £221 million, to £973 million, below its £1 billion year-end target.

There was a lot to like about Morrison's results, particularly an 11% increase in underlying profit, in addition to a 19% increase in like for like sales suggesting that Morrison's is really starting to reap the rewards of the turnaround strategy implemented by CEO Dave Potts four years ago, at the height of the supermarket price wars. Despite challenging conditions such as rising costs, inflation pushing the cost of goods higher, and an increasingly squeezed consumer, Morrison's is proving to be stiff competition to low cost competitors Aldi and Lidl.

Following an encouraging year, Morrison's also announced a special dividend of 4p per share, taking the full year pay-out to 10.09p an impressive 85.8% increase on the previous year. Despite Morison’s making all the right noises, the share price dropped in early trade, with investors opting to book profits after a strong run up into the release.

US Retail sales in focus

With Friday’s jobs report showing weak wage growth and core inflation staying constant at 1.8%, investors’ fears over runaway inflation have cooled significantly. US retail sales are expected to increase 0.3% month on month in February, up from -0.3% the previous month. Even if this figure prints above expectation it is unlikely to reignite the market panic of last month which resulted in the US stocks markets entering correction territory.

The dollar is trading 0.1% higher versus a basket of currencies. A surprise to the upside could see the dollar index target the psychological level of 90.00. Meanwhile a weak print could see the dollar index take step lower towards 89.00