The FTSE was down 30 points in early trading this Wednesday morning following a negative close on Wall Street yesterday as investors wait to see if politicians can find agreement on the format of the US tax reform bill.
A poor start for the FTSE was in part due to weaker commodity prices which sent miners lower. Hammerson and Micro Focus were the morning’s worst performers with the former agreeing to £3.4bn offer for Intu Properties which sent shares diving 3.5% while the latter continues its slide following the Deutsche Bank downgrade to Hold last month.
The Pound, meanwhile, has been unable to shake off its Brexit related concerns. Spreadex analyst, Connor Campbell noted “With the DUP obstinate as ever, and Theresa May once again under fire for her bumbling, barely comprehensible approach to Brexit, the pound didn’t really stand a chance of recovering its recent losses this Wednesday. Instead the currency was further daubed in red, falling to a sub-$1.34 one week low against the dollar while slipping 0.3% against the euro.”
Over in the US, the Tax Reform Bill continues to dominate investor sentiment. “The US dollar continues to look fairly well supported in anticipation of some form of legislation being passed, while there still appears to be fairly little concern about the raising of the debt ceiling, despite the expectation that the US treasury will see its cash balances fall to $70bn by the end of this week.” suggested CMC Markets analyst, Michael Hewson.
US equity markets fell yesterday as the S&P 500 recorded its first 3-day losing streak since August. Accendo Markets Analyst, Mike van Dulken commented, “Despite a rebound of sorts for Tech, Housebuilders reacted to a negative update from Toll Brothers. Upgraded buyback programmes from Mastercard and Bank of America, were welcomed, but not enough to reverse market sentiment as we await confirmation on tax reform.”
