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Morning Round-Up: GKN, the FTSE and US Indexes


The FTSE was up 10 points in early trading this Friday morning despite a Crude Oil pull back that saw BP and Shell lose 0.5% and a similar drop from Miners, Rio Tinto, BHP Billiton and Anglo American.

It is engineering Group, GKN, that is providing the boost the FTSE needs to hit positive territory. The announcement this morning that the business has rejected an unsolicited bid proposal from Melrose of 405p per share, the appointment of Anne Stevens as chief executive, and the announcement of plans to separate its aerospace and automotive businesses has led to a 25% surge in GKN shares.

US Equity markets were back on the front foot yesterday with yet more record highs, with the Dow Jones the standout performer, climbing over 200 points in the session.

CMC Markets analyst, Michael Hewson noted “After a brief pullback for US markets on Wednesday normal service was resumed with more record closes for US equity indices yesterday as investors shrugged off concerns about tighter central bank policy and warnings about trade tensions with respect to NAFTA.”

“Boeing once again saw strong gains, easily offsetting all laggards on the 30-stock index.” added Accendo Markets analyst, Mike van Dulken. “The S&P 500 and Nasdaq also closed at record highs, with Energy names benefitting the former thanks to fresh Oil highs, while gains for Apple aided the latter.”

Results from JP Morgan and Wells Fargo this afternoon will kick off US seasonal earnings.

The spotlight is likely to fall on the US Dollar today with investors focusing on the US economy. FxPro analyst, Edward Anderson commented “USD weakened on lacklustre factory inflation data and today’s plethora of inflation data from the US (CPI & Retail Sales) is likely to have a major impact on the trajectory of USD”

On the US inflation figures due for release at 1.30pm, Mike van Dulken noted “the headline rate forecast slower in December although the more important Core metric likely held up. Although still shy of the Fed’s 2% target, it’s unlikely to sway the Fed from further rate hikes this year.” “US Retail Sales are expected to post slower growth for headline, ex-Autos, and ex-Autos & Gas” he added.

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