Barratt Developments pulls housing sector lower
Supermarkets continue to lead the market higher in London today, but that has not been enough to see gains of any real magnitude.
Barratt Developments dropped 3.5% after results, taking the rest of the sector with it, an illustration of how concerned investors are that the Bank of England will step in to spoil the house-price party, even though Mark Carney has hinted that interest rates are too blunt an instrument to deal with the revived craze for house buying among the general populace.
Mining shares continued to struggle today, and although Vedanta has bucked the trend it has failed to hold early gains above the £10 level.
Housing data beats expectations
The week is heading towards a quiet finish in the US, which was almost inevitable following the heavy selling of the preceding two days. Eurozone nerves continue to stalk the US, but bulls will be emboldened by today’s price action, which has seen both the Dow Jones and the S&P 500 remain firmly off yesterday’s lows.
Housing data was ahead of expectations, but a weaker Michigan confidence reading meant that we are still stuck in the purgatory of ‘mixed data’, that is neither completely positive nor entirely negative. This might have been a week of record highs, but the overriding impression is still that of a market that doesn’t know whether it’s coming or going.
US crude regains ground
US light crude has regained ground today, rising back to $102, setting the stage for another attempt to hit $105. The backing for this move has been reports of a move to end the US ban on crude export, although gains may be capped by the EIA report that crude inventories are above the usual average for this time of year.
Gold continues to hold above $1290, which has been the major source of support all through this week.
Cable enjoys second day of gains
The pound is enjoying a second day of gains against the US dollar, with cable lifting itself from the $1.6750 level and recovering $1.6800 during the afternoon. Only two days after the bank released its inflation report, the narrative of earlier-than-expected rate rises is strengthening again, lifting the pound against its US cousin.
There is less enthusiasm in EUR/USD, however, and the currency pair seems unable to pull itself away from $1.37, which is the bottom of the current range for the euro against the dollar. The likelihood is that the currency pair will now head back towards $1.3930.