FTSE 100 futures set for quiet weekend as investors eye Covid-19 numbers
Sharp increases in Covid-19 cases mean wary investors and a potentially stagnant weekend for the FTSE 100. However, weekend traders may benefit from an impending spike.
A rise in coronavirus cases around the world forced the FTSE 100 to open lower on Friday as investors continue to be spooked by data coming out of Florida, which had just reopened part of its economy again following a state-wide lockdown. On Thursday, the state recorded its largest daily death total yet, while the US recorded over 60,000 cases.
What’s causing the FTSE 100 price stagnation?
With Thursday’s announcement that England is taking a similar approach to the US by opening gyms, salons and other parts of the economy, many investors are wary of the prospect of another lockdown brought on by a future ‘second wave’. As a result, the FTSE 100 is on track for a weekly fall of over 2%.
According to analysts, the FTSE 100 looked like a stopped clock on Friday. Overall, market malaise meant that the blue-chip index barely moved and, by mid-afternoon, it was up only 28 points (0.5%) at 6,077, before eventually closing at 6,095.41 points.
With the number of new coronavirus cases in the UK rising for the first time in eight readings and footfall in retail stores remaining over 50% lower than this time last year, further stagnation is expected for the index over the weekend as investors wait for further data to be released.
How the summer statement could affect spending over the weekend and the FTSE 100 next week
This week’s bearish trend could, however, be overturned if the Chancellor’s pledges in his summer statement create an increase in footfall on the high street over the weekend and into next week.
The flagging hospitality sector, in particular, will be hoping to benefit from the Chancellor’s temporary cut to VAT from 20% down to 5%, which comes into force on 15th July. This VAT cut applies across the hospitality industry and it’s hoped that the move will get Brits spending again. To further encourage spending, the Chancellor has also unveiled a plan to pay employers to keep their furloughed staff through to January - such a safeguard on jobs is likely to boost consumer confidence.
Elsewhere, the immediate cut to stamp duty for 90% of homebuyers should also help to revitalise the faltering housing market. Halifax recently announced that house prices had fallen for four months in a row, but the stamp duty cut should encourage people to move and force prices higher in a stimulated market. Immediately following the announcement, FTSE 100 member Taylor Wimpey saw their share price soar.
As a result, investors should keep an eye on the public's reactions and actions this weekend. This new-found spending power has the potential to give the economy a boost over the weekend and return the high street to something resembling normality.
How to trade the FTSE 100
If customer confidence does return and business optimism rises, we could see the recent losses from the FTSE 100 quickly turn into gains. Looking to effect trades relating to the FTSE 100 over the weekend could therefore be a positive move.
You can trade contracts for difference (CFDs). Ready to start trading the FTSE 100? Either open a live account with us or start practising with a demo account.
IGA, may distribute information/research produced by its respective foreign affiliates 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.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. 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, and 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. Please see important Research Disclaimer.
Please also note that 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.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.