FTSE sees US-inspired jump

Holding on to the coat tails of US markets and a dovish Federal Reserve meeting, the FTSE has added 50 points this morning and is trading at 6830. 

Rolls-Royce logo
Source: Bloomberg

Less than half a dozen blue chips are trading in the red, with no notable fallers. On the upside Rolls-Royce (+6%) has powered to the top spot, having promised shareholders a billion pounds in buybacks, after it sold its gas turbine unit to Siemens earlier in the year. Perhaps unusually for current climes, the jet engine maker has stated that it plans no acquisitions, with discretion the better part of valour after suffering recent order cancellations. The shares have returned to the top of their recent range, but are still well short of the £12 level where they were before the fraud investigation was announced in February.  

The Fed’s reaction to recent inflation data as 'noise' created a nice echo for equity bulls, with US indices pushing back towards their early June all-time highs and the VIX printing a low close not seen since February 2007. Confirmation of tapering remaining on track for an October end helped bid up cable, and this morning you can get a little more than $1.70 for a pound. FX markets are positioned for, and certainly talking up, a continued upward move here. A weaker May for UK retail sales created little reaction, and until we get a close above $1.70 (as highlighted by Stan this morning) longs will remain hopeful of getting one last chance to add to their positions with a $1.69 handle. 

US markets are nicely positioned for a swing at their all-time highs, with the opening call for the Dow Jones at 16,900, down 5 points, and, with little more than weekly jobless claims on the economic agenda, a piece-by-piece dissection of Amazon.com’s first foray into the smartphone market may be the most talked about item of the day.

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.