The FTSE opened in positive territory, taking the lead from the US, which saw another round of record closes. US tech stocks led the rally in the US on news that Apple will repatriate billions of dollars for tax purposes. The assumption being that other US tech stocks will follow suit to avoid tax penalties. Like or dislike Trump, his aim to repatriate billions of dollars appears to be working.
The FTSE’s push northwards was short lived, as positivity is proving harder to come by in the UK than the rest of Europe. The FTSE is in its fourth consecutive negative session, mainland Europe bounded higher. Not even some encouraging corporate updates were enough to keep demand for the FTSE higher.
Costa Higher on break up hopes
Costa Coffee and Premier Inn owner Whitbred is trading up 3% following its trading update, surprising given the update wasn’t so inspiring. The chain said sales growth had stalled, blaming slowing consumer confidence. Like for like sales dropped 0.1% at Costa. The high street and retailer’s performance has very much been in focus over the past few weeks, what we are seeing at Costa is the falling footfall on the high street impact on like for like sales. The rally in Whitbred share price is probably less to do with their performance and more to do with the renewed calls to spin off Costa from the other businesses.
Royal Mail Lower Despite Revenue Rise
There was enough to like about Royal Mail’s trading update this morning, however investors opted to sell out on the release and the share dropped 1%. Firstly, Royal Mail posted 2% revenue rises for the first nine months of the year, thanks mainly to impressive parcel volumes in Europe. GLS, the International arm saw a 10% rise in volume and revenue, meanwhile letter performance declined less than expected. There were no nasty surprises, only unsurprising evidence that the international arm is where the strength is at for Royal Mail, an area where we expect the firm to focus growth and acquisitions going forward.
Quiet Economic calendar
The economic calendar for the UK and the eurozone offers nothing for traders to pick up on. This afternoon, releases from the US in the form of housing starts and jobless claims, could offer some fresh direction to the dollar.
Dollar sell off continues
The dollar is once again trading lower on Wednesday versus a basket of currencies as it has been unable to maintain the boost from the previous session. Last night even Fed doves were sounding hawkish on the buck, with Evans and Kaplan both pointing to 3 rate rises this year.