Markets climb as ECB hints at more easing

The FTSE has shrugged off weak retail sales figures and continued rising.

Mario Draghi
Source: Bloomberg

With only a week away from Black Friday and the ubiquitous Cyber Monday, today’s retail sales figures will have had high street store managers sitting a little less comfortably. Next weekend is the unofficial start to the Christmas sales, and today’s news will set an ominous tone for the weeks ahead.

Equity traders followed on from the bullish US and Asian trading sessions and have hardly paused for breath as they continue with their bullish path for the week. This template of clawing back last week’s lost ground was given further encouragement from the European Central Bank’s minutes.

There was confirmation that Mario Draghi and his team would consider further stimulus, which did not surprise many and will have garnered even more enthusiasm for the bulls.

Johnson Matthey, an infrequent visitor to the highest climber category in the FTSE, has added almost 10% to its shares today. The prospect of a pre-Christmas treat in the shape of £305 million, split between shareholders in the form of a special dividend, has seen investors topping up their positions in the chemicals firm.

Normally an increase in interest rates triggers a little less enthusiasm for equities, but it looks like no one has told US traders this. The renewed buying in US equities flies in the face of normal analysis, but is arguably a reflection of the extent that traders have been forewarned of the FOMC’s desires to normalise its monetary policies. Although it is not a forgone conclusion, it now looks like it will take some particularly disappointing figures to derail this plan. Today’s better-than-expected Philly Fed manufacturing data will not be the catalyst for change.

The launch of the Square IPO will have kept CEO Jack Dorsey busy in the run up to today’s events, but the fact that he is also the CEO of Twitter would have ensured that anyway. The murmuring of discontent from shareholders is only likely to grow louder as he tries to juggle these two jobs.

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