As the DOW ploughs through the 19k threshold for the first time, the euphoria on the Street of Dreams seems to be as about as contagious as the Great Plague was in London in 1665. It doesn’t matter that I don’t get it. Whilst the Dollar remains strong and punters think Trump, in terms of business confidence, is the ‘dogs’ testicles’ this market is unlikely to have a major reversal until there is some bad news or Congress rejects his early legislation or Putin starts being overly zealous and jingoistic in re-locating his nuclear weaponry in places of political and strategic discomfort. Let’s hope that the appointment of Rex Tillerson as ‘Secretary of State’, makes that an unlikely eventuality. His relationship with ‘Vlad’ suggests that a combination of appeasement and détente has a real chance of working! We shall see! The threat of higher rates (+0.25%) in the FOMC FED rate seems irrelevant.
Few stocks in London were initially prepared to make a move. The market opened 6 points to the good. When it became clear that the US futures had some legs before the opening, the FTSE cracked on. At the close the FTSE 100 was up 1.1% – 78 points at 6968. Oils were flat apart from Royal Dutch Shell was up 1%. Mining stocks did not even play a spear carrying role. Banks (Lloyds +1.9%, HSBC +1.3%) were in good form and drugs (GSK +1.1%, Shire +2.8) attempted to come out of the doldrums. It was the likes of Unilever (2.6%), Diageo (+2%) and Reckitt Benkiser (+2.8%) that put their best foot forward.
The fact that Robert Swannell will be slinging his hook as chairman of M&S saw the retailer’s share bounce by 1.1%. Carpetright had another shocker losing 7% after indifferent numbers. Just after the European close the DOW was up 80 points having been up 120 early doors. UK Inflation bounced on annualised basis to 1.2% from 6% the previous month. The 18% drop in the value of the Pound is starting to adversely affect food clothing and petrol prices (Oil up 6% in the last month). Unicredit raised its €13 billion rights issue and will hose out 14k staff. Shares closed up 15.9%.