In mid-morning trading, the FTSE 100 is once again in the red, as miners and supermarkets bear the brunt of the losses.
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Europe picks up where it left off yesterday
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Next braves the market with fresh downgrades
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Trump puts all others to flight in nomination quest
The selling has continued today in London, with eurozone indices following suit after an initial attempt at a rally. The lack of any particularly abysmal bank earnings from Europe is helping matters, but in London BHP Billiton has kicked off another round of losses for the mining sector. Yesterday’s sharp rebound in the US dollar has caught many on the hop, and the $65,000 question is whether this was the beginning of a new run higher for the greenback. If it is, the implications for equities could be dire. Away from FX, corporate news is still plentiful for UK investors, and the usual contrariness of the market has been seen, as those with good news suffer losses while bearers of bad news enjoy a rally. It appears investors have finally adjusted to bad news from Next, with the shock of downgrades to forecasts evidently wearing off through repetition. Perhaps the bounce this morning indicates that the market is moving from anger to acceptance, with the re-rating of the shares seemingly complete for the time being.
ADP numbers and the US non-manufacturing PMI index dominate the afternoon on the economic front, while crude oil data will provide fresh direction for an oil market that continues to struggle with losses. The long battle for the Republican nomination seems to be at an end, as Donald Trump completes his transformation from eccentric outsider to front-runner. Having seen off his rivals, he now needs to work out how to broaden his appeal without losing his core vote. IG clients remain sceptical that he can manage this, and continue to think Hilary Clinton will occupy the White House come November, with the IG binary currently pointing to a 75% chance of a Democrat victory.
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