Week in Review: FTSE 100 slumps following disappointing US jobs data

FTSE NEWS

Worse-than-expected US jobs data caused the FTSE 100 to slide on Thursday (18 February). The UK’s blue chip index was down around 0.5% until data revealed that US unemployment claims had risen by 861,000 last week. It ended the day down 1.4% at 6,617.15.

• Prime Minister Boris Johnson is expected to confirm a ‘road map’ out of lockdown on Monday (22 February), which could have major ramifications for the nation’s battered hospitality and tourism industries.
• On Tuesday (23 February), HM Revenue & Customers publishes property transaction data for January. The figures act as a good indicator of the current health of the property market.
• Bank of England governor Andrew Bailey appears before the Treasury Select Committee on Wednesday (24 February) and is expected to give his views on the direction of interest rates.
• The Confederation of British Industry publishes data looking at business activity in the UK’s dominant services sector on Thursday (25 February).
• On Friday (26 February), Lloyds Bank and Bank of Scotland publish their monthly Business Barometer, measuring the optimism of the UK firms.

SECTOR IN FOCUS

The UK could be on the verge of a medical marijuana boom with a number of cannabis-based drug producers lining up to list on the London Stock Exchange.

Shares in Kanabo Group plc (KNB), which makes cannabis-based inhalers to treat sleep disorders, soared after the firm listed on Tuesday (16 February).

Kanabo’s London debut follows that of MGC Pharmaceuticals Ltd (MXC), which became the first medical marijuana firm to list in London last week.

It has also been reported that a handful of other medical cannabis firms are eyeing London listings, including Cellular Goods, which is backed by former England footballer David Beckham.

The boom follows a decision last year from City watchdog the Financial Conduct Authority to allow legal cannabis firms to list on London’s main market.

Experts believe the decision could pave the way for the UK to become a hub for medical marijuana firms in a sector that is already booming in the US.

ECONOMIC UPDATE

Speculation is rife that Chancellor Rishi Sunak may introduce tax hikes in next month’s Budget to pay for the spiralling cost of coronavirus.

However, this week progressive think tank the Institute for Public Policy Research (IPPR) urged the Chancellor to “boost it like [US President Joe] Biden” to get the economy back on track.

The organisation suggests that an economic stimulus plan four times larger than the current one is needed if the UK is to minimise long-term scarring for businesses, workers and families.

To date, Sunak has committed around 2% of annual economic output to support the economy through coronavirus.

However, the IPPR is calling for another £190bn, or 8.6% of output, and argues that cash should be targeted at supporting “firms and households hit hardest by the pandemic”.

In the US, President Biden is fighting to get Congress to approve a $1.9 trillion stimulus package to get the US economy moving.

In a statement this week, the IPPR said: “At this March’s Budget, the Chancellor should look to his transatlantic counterparts and pass support measures commensurate to the size of the economic peril the UK is in.”

FUND WATCH

While US shares have stolen the limelight over the past year, Japan’s stock market has been ticking up steadily and hit a 30-year high this week. If you’re lacking exposure to Japanese shares in your portfolio, you may want to consider Man GLG Japan Core Alpha C Professional Acc (GB00B0119B50), which has an ongoing charge of 0.9% and has returned more than 59% in five years.

COMPANY ANNOUNCEMENTS

23 February – Shareholders will be hoping HSBC Holdings plc (HSBA) resumes its dividend when it reports its full-year results on Tuesday (23 February). Banking watchdog the Prudential Regulation Authority asked banks to pause shareholder payments last year to preserve cash during coronavirus. However, HSBC has since expressed its desire to restart the payments, with a decision likely on Tuesday.

25 February – Miners have been boosted by China’s insatiable demand for commodities in recent months. UK-listed miner Anglo American plc (AAL), for example, has seen its shares rise by more than 18% in the past three weeks alone. The mining giant will give an update on demand when it publishes its full-year results on Thursday (25 February).