Spreadex Market Update
Budget gives big boost to FTSE, Eurozone and US remain in the red
News that the UK’s GDP has been revised up for the years between now and 2019, with inflation being revised down to 0.2% for 2015 with similar revisions for the following years as well, left investors pleased with the state of the country, putting the FTSE back on the path to 7000. Changes to ISAs and savings boosted companies like Hargreaves Landsdown and St James Place, whilst Diageo benefited from the latest cut to alcohol duty. Ted Baker were also a big winner this Wednesday, with the reported announcement of record-profits tomorrow lifting the retail stock higher as the day went on.
George Osborne also announced that the North Sea oil industry is set to receive £1.3 billion worth of tax cuts, a fact that briefly caused a surge in the FTSE’s oil sector. However, this was swiftly loss as another intimidating figure from high US crude oil inventories left the total inventory at a record high, wiping out any gains the sector had made post-Budget, and leaving the commodity on the precipice of further losses once again.
Over in the Eurozone, the positive swell for the FTSE couldn’t help out the region’s indices, with the DAX increasing its losses. However, the Fed statement later on is likely to have more wide reaching consequences than the UK’s Budget announcement, so the Eurozone indices could be in a different position come open tomorrow morning.
The US markets failed to shake their pre-game nerves at open this afternoon, with the Dow Jones continuing to match the DAX in its declines. The uncertainty around the Federal Reserve statement tonight remains an issue for investors, who appear unwilling to take any risks ahead of Yellen’s comments. There also remains a divide over what a positive Fed statement would contain. The hawks clamouring for a rate hike will be desperate for ‘patient’ to be removed from the Fed’s dictionary, whilst the dollar-fearing doves will want to see the hike remain at its currently tabled June date at the very least.
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