FTSE 100 gains after slew of earnings, Fed in focus

imageEconomy24 minutes ago (Apr 28, 2021 16:37)

© Reuters.

Key Points

  • FTSE 100 closing price of 6,962.18, +0.25%
  • Lloyds, WPP all higher after earnings
  • Reckitt Benckiser , Fresnillo , Sainsbury ‘s  all decline
  • Oil higher after inventory data
  • Dogecoin rallies after Musk tweet, Bitcoin steady

By Samuel Indyk

Investing.com – The FTSE 100 finished higher on Wednesday after a huge number of corporate earnings from some of the more high-profile names in the index. Advertising heavyweight WPP (LON:WPP) was the best performing stock in the blue-chip index as all business lines returned to growth in the first quarter.

Lloyds Banking Group (LON:LLOY) shares were also near the top of the FTSE 100 and hit their highest level in a year with profits rising to £1.4bln. The bank also released £459mln previously set aside for credit losses related to the pandemic.

Lagging in the index was Reckitt Benckiser (LON:RKT). The conglomerate announced strong sales from its hygiene division but national lockdowns in the UK and elsewhere has hampered the health division, which saw revenue decline by 13%. The health division includes products such as Strepsils and Nurofen and social distancing measures have led to a mild flu season in the UK. The company did announce a double-digit increase in Durex condom sales, benefiting from areas where lockdown measures are easing.

Silver miner Fresnillo (LON:FRES) was lower after reporting a decline in silver production during the quarter. Supermarket J Sainsbury (LON:SBRY) shares also fell after the company’s profit declined amid a rise in Covid-related costs, despite a strong increase in grocery revenues.

Oil companies also helped the FTSE push higher with BP (LON:BP) and Royal Dutch Shell (LON:RDSa) both rallying as oil prices gained. Analysts at Goldman Sachs (NYSE:GS) were bullish on the energy markets, saying they forecast Brent to hit $80 per barrel as they expect a huge pick up in demand over the next six months.

Today’s EIA inventory data showed a smaller than expected build in crude oil stockpiles. Crude oil inventories rose by just 90,000 barrels in the latest week, compared to expectations of a build of 659,000 barrels.

It was quieter in cryptocurrency land although Dogecoin jumped around 20% at one stage after Tesla CEO Elon Musk appeared to refer to himself as the ‘Dogefather’ on Twitter. Bitcoin was again relatively stable after rebounding from multi-week lows earlier in the week. Ethereum touched another record high amid reports that the European Investment Bank is plan to launch a digital bond on the Ethereum network.

All eyes will now first turn to the Federal Reserve interest rate decision at 19:00BST, followed by a press conference from Chair Jerome Powell 30 minutes later. The Fed is not expected to make any changes to its monetary policy instruments at this juncture and focus will be how Powell and co. view the economy going forward, now that the vaccinations appear to be slowing the spread of Covid-19 and the economy returns to normal.

After the US market closes, Apple and Facebook are scheduled to report their earnings, following what appeared to be upbeat reports from Google (NASDAQ:GOOGL) parent Alphabet and Microsoft yesterday.

FTSE 100 gains after slew of earnings, Fed in focus

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