FTSE Rises Despite UK GDP Contracting in Q4
This morning all eyes were on the UK preliminary GDP figures, which came in weaker than expected at -0.3%.
Although not an absolute confirmation, this news does strongly point towards a triple-dip recession for the British economy.
Having had half an hour to absorb the figures, at 10am the FTSE spread betting market was up seven points at 6271.
When looking at these figures, several factors should be taken into consideration.
Firstly there’s the unwinding effect of last summer’s Olympics, secondly the poor weather and thirdly the fact that parts of the North Sea oil fields were shut down due to maintenance issues.
None of these elements on their own are enough to de-rail the GDP, but taken together they will have accounted for a significant percentage of the change.
Chancellor George Osborne’s timely trip to Davos will give him a bit of breathing space before he has to face the rest of the British press not already in Switzerland.
Other than the UK GDP figures, the only other economic data of real relevance is this afternoon’s US new home sales, due out at 3pm (London time).
It is not only the economic calendar that is looking a little thin today, as there is a dearth of equity news too.
Anglo American has advised the markets of its latest metal production figures, and although a number of factors have impacted these, the firm will still not be feeling too clever with itself.
Looking ahead to the US open, at 10am (London time) the Dow is being called to open up 50 points at 13,875.
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Financial Market Comments from Alastair McCaig, Market Analyst, IG Index.
The above comments do not constitute investment advice and Clean Financial accepts no responsibility for any use that may be made of them.
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