Oil prices have tumbled more than 1% on an OPEC agreement that will not commit beyond a nine-month production cut. Though oil at $50.88 has come back from its January 2016 low (around $28 a barrel) it has yet to see a price resurgence beyond $58.
In the US shares opened earlier at record levels after the disclosure that the US Fed expects the economy to gain speed. Interest rates, US policy makers indicated, may climb higher sooner rather than later. Bourses in Europe also picked up though the response was less emphatic.
At 4pm the euro was close to 1.1210 against the dollar while sterling was at 1.2938 though the pound seemed to ignore weaker lower UK growth figures earlier from the ONS – for a while, at least.
The ONS said a 0.2% quarter-on-quarter GDP growth rate compared to a previous 0.3% estimate was partly down to the impact of rising prices, particularly in retail and general household spend.
- UK FTSE 100 7,517.71 +0.04%
- Dow 21,091.18 +0.37%
- S&P 500 2,415.20 +0.45%
- Nasdaq 6,200.10 +0.60%
- DAX 12,645.80 +0.02%
- CAC 40 5,346.69 +0.10%
- Gold 1,258.90 +0.10%
- Oil WTI 50.74 -1.25%
The pound’s loss in value continues to dent consumer confidence but the latest GDP figures also means Britain’s lead as one of the faster growing G7 countries gets a decisive push back. Consumer spending is looking very weak.
Mortgage lending flat – except Wales
New data from the Council of Mortgage Lenders (CML) does little to perk things up. UK mortgage levels have slipped to £18.4bn in April, down 11% on March though there is some seasonality buried in the figures.
Partly that's because new lending generally hesitates in the spring. “Still, first-time buyers continue to be a key driver in Wales,” said the CML, “with the largest activity in the first quarter of the year since 2007, and remortgage activity is at a five-year quarterly height.”
Sears sales surge
Rather better US consumer sentiment meanwhile has seen Sears shares soar 25% to $9.42 following solid sales climbs and a quarterly profit of more than $240m, though underlying sales are still on a downward path.
For example, comparable sales slipped 12.4% in the quarter with a fall in Sears’ gross margin rate also. Beleaguered retailer JC Penney shares climbed 3% today to $4.80 though they have almost halved in value since the start of the year.
The FTSE 100 ended the day at 7,517.71 up just 0.04% or three points. The biggest climbers were 3i Group up 3.51% and easyJet up 2.75%. Tesco and Royal Mail shares pushed up 1.86% and 1.66% respectively. Fallers included Anglo American, down -2.44% and Paddy Power Betfair down -1.25%.
Breaking news: Non-OPEC countries including Russia agree to fall in line with OPEC's nine-month production cut until March 2018. Sterling is now down 0.3% against the US dollar at $1.2936 following this morning's GDP cut.