The FTSE 100 was set to make modest gains in early trading today as London investors got their chance to react to new US Treasury Secretary Janet Yellen’s pledge to “act big” to help the US economy rebound from Covid-19.
Yellen, former head of the US Federal Reserve central bank, pledged to provide relief to those in need in the US economy, triggering expectations of further stimulus measures beyond the $1.9 trillion already promised.
She also made clear that the tough US policy on China would continue, albeit with a different tone than under Donald Trump.
For its part, China today upped the ante against the US with media there repeating claims the Covid pandemic had been started by America.
For currency markets, her biggest point was to stress that the US would no longer be looking to talk down the dollar. Trump had regularly attempted to suppress the greenback to boost US exporters.
Asian markets started the morning up strongly, hitting new record highs, but the gains petered out, and Joe Biden’s inauguration later today was not set to be greeted with a surge in markets in Europe.
The FTSE 100 was being called up just 15 points at 6726, the Dax in Germany flat at 13815 and France’s CAC 40 down 8 at 5590. Those prices were from CMC Markets. IG Index called the FTSE up 20.5,
Inflation data today for December will show there are no signs of prices rising as economies struggle under the weight of Covid. The numbers will not include the more optimistic feel that markets have indicated so far this month in the UK as vaccine rollout progresses quickly.
Europe’s dismally slow pace of vaccinations will hold back their economies a little longer than the UK’s, although Britain has further to claw back after Covid hit it hardest last year.
UK inflation could see a modest uptick to 0.5% from 0.3% in November largely due to higher fuel prices. The less-widely watched core inflation number is likely to come in at 1.3% from 1.1% before.
European inflation is set to come in at minus 0.3% in headline CPI and plus 0.2% in the core inflation figure.
Stockwatchers in the US may have been watching Yellen with half an eye, but the focus after hours was on Netflix, which shot the lights out on its trading figures. Shares in the popular big tech stock jumped 13% in after hours trading as it reported strong growth in subscriber numbers to more than 200 million despite the rise of Disney’s streaming product and some price rises.
Still on global stocks, Alibaba shares jumped this morning after founder Jack Ma made his first public appearance since disappearing after criticising China’s regulators and state-owned banks in October. After his speech back then, his Ant Financial’s IPO was cancelled by regulators and he was given a dressing down in public by Beijing officials.
In a video posted online, he said: “My colleagues and I have been studying and thinking, and we have become more determined to devote ourselves to education and public welfare."
All eyes as ever in London will be on the oil price after the International Energy Agency yesterday warned new Covid lockdowns would depress global oil demand. Those lockdowns include fresh ones in and around Beijing, where officials are deeply concerned about a spree of new outbreaks.
Entain, the Ladbrokes to Coral gambling giant formerly known as GVC, will be in the spotlights again after MGM dropped its £8.1 billion takeover bid. Entain’s shares tumbled 12% yesterday afternoon after the announcement and could see some gains today as bargain hunters move in.