FTSE higher but caution remains

The final day of the week has started positively, with markets broadly higher and the FTSE 100 up 15 points.

City of London
Source: Bloomberg

Rolls-Royce and housebuilders were the main gainers this morning in London, with the former up on hopes of a new deal with Airbus and the latter still finding buyers after the Bank of England opted not to squish the housing market boom yesterday. But on the final day of the week and with the end of the quarter looming as well, there are few compelling reasons to boost equity exposure, keeping gains limited.

A small downward revision for yearly UK growth was mostly ignored, with a rise in business investment helping to keep sterling supported versus the dollar. Most investors are aware that the recovery has been built on low rates, and this is why the prospect of a rate hike makes everyone from Mark Carney downwards acutely nervous.

With little US data out this afternoon, any rebound for US markets should be fairly tentative. Markets finished off the lows yesterday indicating that there are still dip buyers lurking, but until earnings season kicks off in earnest upward progress will be lacking. A 17,000 print on the Dow Jones and 2000 on the S&P 500 still seems like a question of ‘when’, not ‘if’, but it is unlikely to come next week with both the European Central Bank and non-farms on the calendar. Ahead of the open, we expect the Dow to start seven points lower at 16,839. 

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.