Trade war fears hobble Wall Street

Heading into the close, the FTSE 100 is 60 points higher, but US markets are struggling. 

A slow start to the US session threatens to undermine the gains seen in Europe, but with trade concerns now front and centre once again it is not surprising to see Wall Street struggling to build up a decent head of steam. While progress of any sort would be good to see, unless there is real direction from the top the discussions will go nowhere, and it seems President Trump is in no hurry to get a deal done ahead of the 1 March deadline. It seems odd not to see much follow-through on equities shortly after a Fed policymaker aired the idea of QE outside of emergency situations, which probably speaks to how cautious investors are at present. But after a remarkable bounce from the lows, it  will take something truly special to ignite another move higher.

Sterling remains under pressure, and it is not hard to see why confidence continues to drain away from the UK, as politicians dither despite a looming deadline. The sensible thing would be for both sides to call for an extension to Article 50, but that comes with so many problems on all fronts that it remains unlikely. The PM’s statement tomorrow may move the dial, but given recent events a break in the deadlock seems difficult to envisage.