Pound tumbles on Brexit tension, boosts FTSE 100
London-listed stocks recorded gains last week, as significant tensions between the United Kingdom and European Union over Brexit sent the value of the pound tumbling. Sterling fell from close to $1.33 on Monday to sub $1.28 by the weekend. Any negative movement for sterling tends to lead to a positive reaction for UK share prices, given the large percentage of revenues that large listed British stocks make overseas in other currencies. The more international FTSE 100 added 4% over the course of the week, while the FTSE 250 – which has more of a domestic-overseas balance – added 1.2%.
Several FTSE 100 names gained more than 10% during the week, including miner Rio Tinto, insurer Aviva and JD Sports Fashion. It was a good week for miners in general, with Glencore and Anglo American both posting gains of close to 10%. At the other end of the spectrum, British Airways parent International Consolidated Airlines Group suffered another tough week, falling by more than 10%, with its year-to-date loss standing at 68.9%.
- FTSE 100: +0.5% Friday, -20% YTD, (+4% last week)
- FTSE 250: -0.1% Friday, -19.8% YTD (+1.2% last week)
What to watch
Lennar Corporation: Homebuilder Lennar is the largest in the US by revenue. New home demand has maintained despite the pandemic, particularly as Americans pour out of densely populated cities to more rural areas where they are looking to purchase homes. Supply has also been constrained, as existing owners wait and see what will happen to prices before selling. That adds to the demand for new-build homes. Lennar’s shares are up 38.9% year-to-date ahead of its latest quarterly earnings figure release today, followed by an analyst call on Tuesday. Wall Street analysts are anticipating an earnings per share figure of $1.55, up from the $1.14 they had expected for the quarter three months ago.
UK unemployment rate: Tomorrow the July unemployment rate and June employment change figures will be released in the UK. The unemployment rate came in at 3.9% for June, with consensus expectations pointing to an uptick in July. Figures may worsen substantially in the autumn; on Sunday the BBC reported that employers in Britain are planning more than double the number of redundancies as they did at the height of the global financial crisis more than a decade ago.
Brexit negotiations: Given the near-term sway Brexit may have over the value of the pound; Brexit negotiations are worth keeping an eye on as they continue this week between the UK and EU. Chief negotiators from both sides have been fighting on Twitter, and Boris Johnson’s government has admitted it may break international law to prevent a hard border with Northern Ireland.
All eyes on the Fed
One of the biggest events of the week is the Federal Reserve’s final meeting before the November presidential election in the US. There will be details of the meeting’s content and a speech from chair Jerome Powell on Wednesday, in which investors will be watching for more detail on the Fed’s plan to allow inflation to run above target. Powell’s views on the economic recovery from here, and any hints on potential additional stimulus to come, are other likely highlights. The pressure is on the Fed stimulus wise, as negotiations between Democrats and Republicans on the next pandemic relief bill have stalled.
Crypto corner: Bitcoin miners see revenues surge
Bitcoin miners made $368.3 million in revenue last month, while ethereum miners also saw a huge surge in revenues, amid soaring prices for both cryptoassets.
According to a report by cryptoasset website The Block, the climb in bitcoin revenues was the highest figure, when accounting for block rewards and transaction fees, in the past three months.
Bitcoin’s transaction fees grew from roughly 8.5% in July to 10.7% in August, while ethereum’s transaction fees jumped 98% to $285.1 million in revenue in August.
Both coins have seen their prices rocket to multi-month highs in August, with bitcoin peaking at $12,228 and ethereum at $469, before both retreated sharply. This morning bitcoin is at $10,338 per coin, while ethereum is at $364.
All data, figures & charts are valid as of 14/09/2020. All trading carries risk. Only risk capital you can afford to lose.
This is a marketing communication and should not be taken as investment advice, personal recommendation, or an offer of, or solicitation to buy or sell, any financial instruments. This material has been prepared without having regard to any particular investment objectives or financial situation, and has not been prepared in accordance with the legal and regulatory requirements to promote independent research. Any references to past performance of a financial instrument, index or a packaged investment product are not, and should not be taken as, a reliable indicator of future results. eToro makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared utilizing publicly-available information.
The post Daily Market News: Oracle wins TikTok bid, Nvidia buys Arm for $40bn appeared first on LeapRate.
Higher-For-Longer Risk Continues To Grip US Treasury Market
A perfect storm may be brewing for the bond market as a combination of factors drive yields higher. Exhibit A is the benchmark 10-year Treasury yield,…
3 Gold Stocks to Buy on the Possibility of 2024 Rate Cuts
The tightening of monetary policy has translated into negative price action for various asset classes. However, the tightening cycle seems to be over with…
Ticking Time Bombs: 3 AI Stocks to Dump Before the Damage Is Done
Investors are trying to decide which AI stocks to sell.
AI stocks are facing a weakening outlook after the Fed’s latest rate decision on Sept. 20. Although…
Financing News15 hours ago
Omineca Mining & Metals Announces Grant of Incentive Stock Options
Financing News22 hours ago
Barrick Welcomes Nevada Governor Joe Lombardo and His Delegation to Canada
Base Metals12 hours ago
‘Large scale, multi-generational asset’: Sovereign’s Kasiya will be the biggest, lowest cost rutile and graphite producer in the world
Drilling News18 hours ago
Tudor Gold Intersects 55 Meters of 3.35 g/t AuEQ Within 255 Meters of 1.18 g/t AuEQ at the Goldstorm Deposit, Treaty Creek
Economics22 hours ago
EUR/USD: Dethroning King Dollar will be hard
Uncategorized22 hours ago
Weak S&P 500 Buyers, Very Weak
Economics23 hours ago
Credit Card Losses Are Surging At The Fastest Pace Since The Global Financial Crisis
Financing News22 hours ago
Morien Provides Donkin Mine Update