CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

Markets chew on Brexit delay

Article By: ,  Senior Market Analyst
February 27, 2019 4:59 AM
The implications of a potential delay in Brexit and the pound’s new found strength are working against the FTSE this morning and even though several blue chips like ITV, Weir Group and homebuilder Taylor Wimpey turned in good results, this was not enough to stem the tide.

As of yesterday the Prime Minister has agreed that MPs will be able to vote on delaying Britain’s departure from the EU if they decide to reject the revised Brexit proposal she is currently working on. She cited the fact that businesses and government are seriously unprepared for a hard Brexit as one of her main reasons for the proposal. 

While the delay helps avoid some of the consequences of an abrupt departure from the EU it also is keeping industry in a sort of limbo that doesn’t allow for long term planning and hampers a number of business decisions. Brexit could end up being delayed until 2021, which, for a lot of businesses will mean operating with one hand tied behind their backs for another two years.

Investors take dim view of M&S’s Ocado deal

Marks & Spencer has finally initiated the process of branching off into online sales and deliveries with the purchase of Ocado. The supermarket chain will take over from Waitrose as Ocado’s main partner in September 2020 when the Waitrose deal runs out.

Strategically it is a smart move in a situation when high street sales for most UK supermarkets have been losing ground to online sales. But M&S’s decision comes with a hefty price tag of £750 million. 

To raise that money the supermarket chain will launch a £600 million rights issue and cut the dividend payout by 40%. Investors were less than positive on the details of the deal, punishing the company with an 8% decline in share price.

Oil and currencies steady

Yesterday’s onslaught on oil futures seems to have petered out and prices stabilized this morning for both Brent crude and WTI. Some major headwinds remain in place with President Trump calling on OPEC to relax production because prices are too high in his view, but the prospect of a Sino-US trade deal is pushing the market in the opposite direction because it could help boost the Chinese economy and consequently oil demand. 

The currency markets are also slightly less volatile this morning with the pound rising 0.14% against the dollar on the back of domestic Brexit news.

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024