- FTSE 100 falls as “reopening” names struggle
- IAG (LON:ICAG), Rolls-Royce (LON:RR), easyJet (LON:EZJ), Tui AG NA (LON:TUIT) all weak
- Ocado (LON:OCDO) and other supermarkets strong
- GBP weak around 1.3900 handle
- Bitcoin steady below $60,000
By Samuel Indyk
Investing.com – The FTSE 100 finished lower on Friday as a number of the names that are to benefit from economies reopening struggled. The FTSE 350 Travel & Leisure sector declined with airlines and travel operators particularly weak. The weakness comes amid fears that a third wave of the coronavirus has gripped Europe with regions of France going back into lockdown, following similar moves by Germany and Italy recently. The German Health Minister Jens Spahn struck a particularly downbeat tone, saying that new infections were rising in Germany exponentially and that there were not enough vaccine doses in Europe to stop the third wave by vaccination alone.
On the other hand, companies that have reaped the benefits of national lockdowns have finished the week on a high. Grocery delivery company Ocado Group PLC (LON:OCDO) topped the blue-chip index with supermarket chains WM Morrison Supermarkets PLC (LON:MRW) and J Sainsbury PLC (LON:SBRY) (OTC:JSAIY) not far behind.
In the world of asset management, Scottish Mortgage Investment Trust PLC (LON:SMT)’s long-term portfolio manager James Anderson announced he would be retiring next year. FTSE 250 listed Sanne Group PLC (LON:SNNS) shares were the best performing in the FTSE 250 after announcing increased profit, revenue, and dividend in 2020.
GBP was generally weak with GBP/USD dropping below 1.3900 amid broad USD strength. The US Dollar Index eked out small gains as yields stable but still elevated. After touching a high of 1.75% on Friday, the United States 10-Year yield dropped back toward 1.73% and US yields continue to drive the wider market.
WTI and Brent crude futures pared back some of yesterday’s sharp losses despite fears of a Covid third wave in Europe, which could impact oil demand. Another attack on Saudi oil facilities by Houthi rebels failed to have much of a market impact after the Saudi energy minister said there were no casualties and no impact on throughput at the target.
Bitcoin was relatively steady but remains below the $60,000 mark which it broke above for the first-time last weekend. The rise in institutional interest in cryptocurrencies continues to keep prices elevated with yesterday’s news that Bank of New York Mellon (NYSE:BK) was investing in a cryptocurrency start-up supportive of prices.
After the plethora of central bank meetings this week, next week is somewhat quieter. UK labour market data is released on Tuesday with unemployment rate forecast to tick higher to 5.2%, however, this likely still underestimates the actual level of unemployment given the number of people furloughed in the UK. Wednesday sees UK inflation data with CPI forecast to increase to 0.8% YoY from 0.7% last month.
Wednesday will also bring flash PMI readings from the UK & Europe and on Thursday the Swiss National Bank holds its quarterly policy meeting. On Friday the ONS rounds off the week by releasing UK retail sales figures and markets will be watching out for the US PCE figures for any signs of rising inflation.
FTSE 100 falls, reopening names struggle amid 3rd wave fears, GBP weak
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