At 0.6% the Q4 reading surpassed the 0.5% expected, matching the growth managed in the third quarter. However, after a flurry of movement in the immediate aftermath of the release the news couldn’t enliven the FTSE or the pound; the former sat flat at 7170, while the latter found itself down 0.1% against the dollar and up just 0.1% against the euro. It appears that the overreliance on the services sector, which actually grew 0.8% during the fourth quarter, may have spooked investors given that the resilience of consumer spending will be tested by the pressures of rising inflation as 2017 continues.
Looking to this afternoon and the Dow Jones is set to modestly build on yesterday’s all-time highs. The futures suggest the Dow will jump 35 points after the bell, putting the index (just) above 20100 for the first time. It will be interesting to see how much attention investors pay to the day’s US data; Trump’s policies have been the driving force behind the Dow’s rise, shoving the figures released in 2017 to the side. The fact that this afternoon’s data isn’t particularly exciting (the flash services PMI and the new home sales reading) doesn’t help, though it does pave the way for the first glimpse at the USA’s fourth quarter GDP tomorrow.
