A last minute postponement of the key congressional Healthcare vote saw US equity markets pare early gains to eventually close a touch lower. As a result of the mixed messages from House Republicans, the Healthcare sector led declining sectors on the S&P500 as the index underperformed its peers, while UnitedHealth led losses on the Dow Jones while Nike mounted a recovery from Wednesday’s 7% fall to help the index close just shy of breakeven.
Accendo Markets Analyst, Mike Van Dulken commented – “…markets aren’t panicking. This is thanks to suggestions that a favourable vote isn’t a prerequisite for work to begin on other measures like tax cuts and infrastructure spending. However, it would mean Republicans, who have hated ACA since its 2010 birth, have to accept it will stay. An ultimatum, if you like, setting markets up for a dollop of weekend risk.
This would appear either fortunate timing for a successful vote tomorrow, restoring confidence in the Trump reflation trade, and a revival of risk appetite come Monday. Either that or an unfortunate result that leads to more questioning about how much Trump will actually be able to deliver on.”
Meanwhile, FTSE 100 stocks have stood strong against the pound’s appreciation, holding its ground above the 7300p level this morning. Cable has rallied to 1.2530 on the back of the solid retail sales data released yesterday.
LCG Analyst Ipek Ozkardeskaya commented – “Higher inflation, solid retail sales, combined to several Bank of England (BoE) members’ concerns about keeping the bank rate at the current historical low level for a longer period of time should continue supporting the pound recovery.”
In focus this morning will be a raft of Manufacturing and Services PMI data from Europe.
ADS Securities Analyst, Konstantinos Anthis suggested – “Analysts are expecting the reports to print mildly lower with the focus being mainly on the Services sector; a potential bearish reading could intensify the pressures on the Euro that has lost ground against the Dollar over the past few days.”