Yahoo Finance FTSE 100 falls on expectations of further Covid lockdowns amid concerns over US stimulus and Brexit
The FTSE 100 was set to fall in early trading today as the EU and UK still failed to come up with a Brexit deal and Covid delays of goods travelling through Dover continued.
London’s leading shares index was being called down 19 points at 6438 on the IG Index platform before trading resumed despite a fairly robust morning for markets in Asia after two days of selling. That would mark a reversal of yesterday’s 36 point rise for the FTSE.
Trading was expected to be thin as many investors head off for a quiet Christmas break.
Donald Trump’s ability to upset apple carts continued to be felt even in the dying days of his office as he railed against the US Covid stimulus deal that has underpinned share prices in recent sessions.
He called the $900 million deal to help revive the struggling US economy a “disgrace” and demanded Congress review it. His prime concern appears to be that it was too stingy despite it being his Republicans who have spent months battering down the Democrats on the sum.
He said it was wasteful and unnecessary in many areas, as well as criticising direct payments of $600 per couple as being too low, calling instead for $2000-$4000.
France’s reopening of its border to UK freight went some way to helping sentiment in the UK markets but the backlog of 3000 lorries could take several days to clear, in a phenomenon many have likened to the potential outcome of a no-deal on Brexit trade talks.
Expectations that more of the UK would be moving into Tier4 Covid restrictions on Boxing Day did nothing to lighten the stock market mood.
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On Brexit, the negotiations continue to drag on with reports saying progress has been made on most areas although the tiny fishing industry remains the big threat to an agreement.
The two sides were widely reported as saying they hoped for a deal by Wednesday night which politicians can vote through before New Year’s Day although the EU’s Michel Barnier apparently let slip that the negotiations could go into the New Year.
The UK City diary is predictably empty as Christmas approaches although in the US it is set to be a busy afternoon with key data on November’s personal income and spending plus unemployment.
The two datapoints are interlinked as joblessness, or the fear of it, threatens to hold back confidence in the world’s biggest economy. Signs of a sharp spending fall will confirm fears that the recovery earlier in the year has been thrown off course by the continued grim spread of the pandemic.
Later in the day, figures on inventories of oil and gasoline will impact on commodities prices. The Energy Information Administration figures are likely to show a fall of 3.2 and 1.2 million barrels respectively.
Shares in Whitbread, owner of the Premier Inn hotels chain, will come under scrutiny after property trade magazine Costar reported it had sought a sharp reduction in rents to landlords.
It is the first time the hospitality giant has tried to cut its bills and was spurred by the latest round of hugely damaging lockdown restrictions. Shares in the group could rise at the prospect of it making some savings.
The closure of businesses over the weekend is set to cripple large swathes of the economy including hotels, bars and retailers.
Today, insolvency practitioner Begbies Traynor reported some 40,000 retailers would be on the brink of potential collapse in the New Year, with Arcadia and Debenhams being just the start of the domino fall.
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