Market Report: FTSE set to fall despite better-than-expected retail sales
Derren Nathan, head of equity research Hargreaves Lansdown: “FTSE futures suggest the index is set to open down, and will start Friday a touch below the level at which it entered the week. UK investors should take some comfort from this morning’s retail sales figures which unexpectedly rose for a second consecutive month in February. Volumes increased by 1% compared to forecasts of a 0.4% decline. But it wasn’t a tide that raised all ships. Supermarket sales were unable to follow the strong rise in January. Non-food volumes rose 2.1% to the highest levels in nearly three years. Discounting in the fashion industry was called out as one potential driver, while jewellers reported an increase in demand for gold amidst wider economic uncertainty.
US stock futures are showing little movement after another down day on Wall Street yesterday. The big Detroit names Ford and GM fell around 4% and 7% respectively in the wake of Donald Trump’s announcement of Tariffs on the automobile industry. Inflation and consumer sentiment figures are the key macro reads to look out for later today.
Personal Consumption Expenditure figures are expected to show that annual core price inflation accelerated by 0.1 percentage points to 2.7% in February compared to the previous month. Anything hotter than this could introduce further doubt around the likelihood of further Fed rate cuts this year which would be a drag on investor confidence. The University of Michigan Consumer Sentiment Index is forecast to stay around the recent low-point of 57.9, but given the poor read from the Conference Board Consumer Index earlier in the week there’s scope for a further fall.
Brent Crude prices remain at near for-week highs at just below $74 per barrel. There is however some scope for a reprieve next month as OPEC+ brings moth-balled wells back on stream following production cuts of 1.65 million barrels of oil per day nearly two years ago, a measure that was initially scheduled to last just seven months.”