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FTSE 100 makes flat start as Wall Street slows on J&J Covid jab setback

Jim Armitage
·2-min read
Coronavirus (PA Wire)
Coronavirus (PA Wire)

The FTSE 100 was set for a sluggish session today despite tech shares in the US hitting yet more records overnight.

European stock markets were expected to take more note of the traditional US stocks which, unlike their tech counterparts, slipped back on Tuesday, led by concerns over Johnson & Johnson’s Covid vaccine.

The drugs giant headed into reverse after its one-shot jab was suspended in the US over concerns about rare blood clots similar to those experienced by a small number of AstraZeneca vaccine receivers.

The news unsettled markets somewhat and led to a delay for European rollout of the jab. That alarmed economists who have seen it as part of the solution to the covid crisis still gripping parts of the EU. Shares in Moderna and BioNTech jumped last night as J&J fell.

AstraZeneca’s shares will be under scrutiny in trading today as its jab, like J&J’s is a modified adenovirus.

The FTSE 100 was expected to open up 2.2 points at 6895.3 according to prices being quoted on the IG platform.

The lsluggish performances of shares came despite a sharp fall in US bond yields - a proxy for interest rates, which can generally be good news for equities.

CMC Markets analyst David Madden noted that yields were falling despite higher-than-expected inflation in the US.

The fact is, in such unprecedented circumstances, nobody knows what the longer term outcome will be for the US, UK and EU economies, so talk of rising central bank rates that has been doing the rounds for much of this year could be overdone.

Central banks have consistently stressed that they will take a wait and see approach but markets have consistently ignored them.

Federal Reserve governor Jay Powell is likely to repeat the mantra later today alongside the release of economic data likely to show an improving outlook for the economy, particularly on the jobs market.

For cryptocurrency watchers, there is only one story in town today: the $65.3 billion IPO of crypto exchange Coinbase. Priced at $250 a share, the company’s float was delayed from March after it got nobbled by the US regulators over claims of reporting false transaction information but could get off to a surging start amid global excitement at its prospects.

More cynical investors may take the view that it is floating at the peak of what could be another bubble for crypto currencies that will eventually burst.

Professor Scott Galloway, who called it right on WeWork and AirBnB, said in his blog on Friday that: “It’s likely that on the day of its imminent public listing, Coinbase will be more valuable than Goldman Sachs.”

It’s not always clear if the beloved tech blogger is, or isn’t, kidding, but for that to come true, Coinbase would have to double on day one.

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