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Yet another fall in real wages
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FTSE stuck in a holding pattern
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Reckitt looks pricey versus rivals
It’s not been a great week for sterling bulls. First inflation comes in as expected, disappointing those hoping for a bounce in prices, and then the wage gap stays firmly in place. This should send a firm signal to the BOE to not get too excited about possible rate increases. A brief spike above $1.32 for cable was reversed as the pair headed back to the lows of the day. It looks like the rally off the October lows has faded away. The FTSE 100 took a brief knock as the pound rallied, but normal service has been resumed, with the index broadly in the same place it was a week ago. Equities in the UK and Europe have been mostly frozen in the same place this week, but the repeated attempts to
break higher suggest that the next move will be up, rather than some cataclysmic late-October selloff.
Reckitt Benckiser managed to buck the trend seen so far this week, as a sharp downgrade to forecasts did not produce an almighty rout in the share price. Still, for a company trading at 24 times current earnings the prospect of another reorganisation coupled with an expectation of no growth should spark some serious revisions while Unilever looks to be a much better way of getting exposure to the sector.
Ahead of the open, we expect the Dow to start at 23,041, up 44 points from last night’s close and starting the day above 23,000 for the first time ever.
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