The FTSE 100 shed more than 1% of its value this afternoon as a rash of losses seeped across several high-profile names including Reckitt Benckiser. The Big Board, in the end, finished 75 points lower at 7,377. But US manufacturing growth was (see below) in rather better shape.
Across the water Markit’s Purchasing Managers’ Index (PMI) for the eurozone area in July slipped to 55.85 compared to June’s 56.3 result – something of a slow start for Q3 though there’s a decent buffer built in.
“Despite coming off recent highs,” Markit chief business economist Chris Williamson said, “the index remained at an elevated level by historical standards and signalled one of the strongest expansions seen over the past six years.”
More drift for both the euro and sterling pairs against the dollar with the euro down -0.33% to $1.1640 and the pound up +0.30% at $1.3042 (at 4pm).
- UK FTSE 100 7,377 -1.02%
- Dow 21,531.72 -0.23%
- S&P 500 2,468.81 -0.15%
- Nasdaq 6,390.49 +0.04%
- Nikkei 225 19,975.67 -0.62%
- DAX 12,215.65 -0.20%
- CAC 40 5,134.83 +0.61%
- Gold 1,262.50 +0.12%
- Oil WTI 46.27 +1.11%
US private sector picks up pace
A bit more welcome news from the US: new manufacturing and service sector data from Markit claims the US private sector is picking up speed. The PMI index for July hit 54.2 compared to 53.9 in June. The hike was driven by a steeper increase in manufacturing production mainly.
“Survey respondents," said Markit, "cited an improving economic backdrop and greater willingness to spend among clients in July. Reflecting this, latest data revealed the strongest upturn in new work received by service sector firms for exactly two years.”
That news was welcome given the IMF downgrade this morning on both the US and the UK economies (US growth revised down to 2.1% from 2.3% and UK growth stagnant at 1.5%).
Meanwhile the US and the UK are to hold their first Brexit trade talks international trade secretary Liam Fox is to meet his US opposite Robert Lighthizer, though subject detail for the talks remains unclear.
Brit investment potential at risk
“Businesses want a transition period on the way to a final agreement with the EU,” Dr Adam Marshall of the British Chambers of Commerce said recently. “If companies have to change their business model once in 2019 and again several years thereafter, the competitiveness and investment potential of our firms will be undermined.”
Meanwhile Bloomberg claimed earlier that Deutsche Bank could be looking at moving around €300bn out of its UK entity back to Frankfurt.
Citigroup exec Jim Cowles recently said, in an email seen by Politico, that Frankfurt was increasingly looking competitive compared to post-Brexit London. “Frankfurt is our first choice for headquartering our EU broker-dealer based on the existing infrastructure, and the people and expertise we already have on the ground.”