Spreadex Market Update
FTSE fails to find momentum after UK Q1 GDP disappointment; Fed and Apple-dominated session looms for Dow Jones
Coming in a tad higher than expected at 0.4%, compared to the 0.6% seen in the final quarter of 2015, the UK’s latest GDP reading was nevertheless a disappointment, with enough evidence to suggest that the current Brexit fears are having a material effect on the country’s growth. Most notably business growth fell from 0.7% to 0.3% quarter-on-quarter, suggesting an increased reticence on the behalf of companies ahead of June’s referendum. Add onto that the gradual erosion of Barclays’ early gains, and the 1%-plus drop seen by Sainsbury’s in light of Home Retail Group’s near 30% plunge in full year profits, and the FTSE was left trudging along with a 0.2% loss as the morning continued.
Looking ahead and the Dow’s open is likely to be dominated by the continued reaction to Apple’s Q2 earnings, with a healthy dose of pre-Fed jitters thrown in for good measure. Having spent years as the market’s darling the Apple is now experiencing what it is like to be on the other side of the equation, investors sending the stock 8% lower in after-hours trading as its quarterly revenue fell for the first 13 years.
Unsurprisingly the long-rumoured iPhone sale-slowdown was the main culprit for this decline, Apple flogging 10 million fewer phones when compared to this point last year. It didn’t help that the company was also contending with the pesky stronger dollar AND the ongoing issues in China, where revenue fell a whopping 26%. With investors seemingly worried last night that Apple’s core is beginning to look a bit rotten it will be interesting to see if anyone swoops in looking for a relative bargain (the company’s stock now pushing $95, a 2 month low) this afternoon.
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