FTSE set to end winning streak?

David Cheetham XTB UK

The FTSE 100 is trading lower by around 35 points this morning with the market looking set to end a run of 6 consecutive higher closes. The weakness emanates from the US with stocks on Wall Street coming under pressure in the latter stages of Tuesday’s session as bond yields rose further. The US 10-year yield finally tagged the psychological 3% barrier and this seemingly weighed on risk sentiment whilst FANG stocks were hit with a wave of selling.

Big tech shares sell-off

The declines seen in the FANG space were more than a little disconcerting with Google (trading name Alphabet) falling almost 5% after its latest trading update. The results themselves appeared fairly positive with beats seen in both earnings and revenues but the market clearly took a dim view with one possible explanation being that the firm is seen to be less profitable in the near-term according to analysts.

S&P500 back at key level

These declines in the big Tech names weighed on the broader index and the S&P500 is now once more trading back near its 200 day simple moving average (SMA) - a technical indicator which some traders use to identify the prevailing trend; above the 200 SMA suggests an uptrend whilst below it suggests a downtrend. When the market fell back to the 200 SMA in February there were calls that the uptrend since the US election was over, but buyers stepped in and defended the level.

Lloyds lower despite rise in profits

An increase of more than 20% in profits for the first quarter is one of the highlight for investors in Lloyds Banking Group following their latest trading update, although this figure was slightly below analysts’ estimates. Statutory profit before tax increased to £1.6B, slightly lower than consensus forecasts for a £1.8B rise, whilst return on tangible equity also gained to come in a 12.3%. Overall the results are fairly pleasing for the bank which has had a troubling few years and only returned back to full private ownership last May, but the smaller than expected rise in profits has seen shares slip lower by around 1%.

Author

David Cheetham

XTB UK

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