FTSE dashed by Fed, WHO comments
Fiona Cincotta May 14, 2020 5:18 PM
Two high level comments are reverberating through the markets this morning, pulling the FTSE and European gauges lower.
Two high level comments are reverberating through the markets this morning, pulling the FTSE and European gauges lower. Fed chairman Jay Powell warning that the US could be facing an extended period of weak economic growth affected both European trading and trading in Asia. He also urged Congress to spend more or face a period of historic economic turmoil.
Dashing hopes that the pandemic will be resolved quickly, the World Health Organisation’s Emergencies Director Michael Ryan said that the coronavirus may never go away and instead become just another endemic virus in the community.
Retail speculators boost investment firm stocks
In London, stocks that are typically the worst hit by the coronavirus came under renewed pressure, notably airlines, housebuilders , banks and insurance firms. The negative broader picture weighed on property firm Persimmon even though the firm is about to reopen its offices at the end of this week and 65% of its construction work is back up and running.
But these distressed times are also offering opportunities such as private equity firm 3i Group and distressed buyer Melrose Industries. 3i shares are the flavour of the morning after the firm said it would still pay out its dividends for 2020 despite returns on its private equity business dropping by over 30%. The hardest hit have been its investments in the travel and the car sector.
The extended lockdown and the shares meltdown has created a vast surge in retail trading activity over the last two months with trading broker Hargreaves Landsdown experiencing the influx of an additional £6.3 billion from investors. Strong results mean that the firm will be able to stick to its planned dividend payout for this year.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.
Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.