It is 14th September. The sun is still high on the yardarm and the City of London is stifling, which is far from the best remedy for the increased energy levels required to select another gear. Admittedly the news flow is almost non-existent. So market activity resembles a ‘tooth pulling session!’ Mary Magdalene would have been very comfortable on Threadneedle Street or in Canary Wharf. At 3.20pm the FTSE is up 32 points at 6698. The Street of Dreams is suffering from a similar amount of inertia resulting in the DOW gathering in just 12 points as I write.
Pharmas have been strong in London with the sector up 1.75%. Miners have been in good form – up 1% on a slightly weaker Dollar. Oils were up 1% but have eased back and remain as a sector just in positive territory after a small drop in the price of crude. HSBC bounced out of the traps despite a downgrade and is currently UP 1%. Few companies of any real consequence have posted numbers today, though Dunelm is up 0.5%. Wm Morrison and Next post trading statement tomorrow with many analysts hoping for greatly improved performances. It has been confirmed that Bayer will pay $128 a share for Monsanto with a $2 billion break-up fee in a confirmed.
There a couple of UK macro data points provided by Simon French, Panmure’s top economist: the unemployment headlines are positive but beneath the headline fall in unemployment you have weak wage growth (at a time when inflation is set to pick up) and the highest level of redundancies for 2 years. The claimant count (those claiming Job Seekers Allowance) also rose for the third month in a row. Overall a decent “Prexit” picture still prevails but there are signs of caution.
Secondly the CML released lending data for July – very weak with -13% MoM declines in home purchase mortgages and -19% for first time buyers and -21% for buy to let. Anecdotally the market has had a recent start to September but certainly looks like a very weak summer of lending. The area that bucked the trend was re-mortgaging, up 7% on June levels.