Week in Review: Plunging US share prices drag down FTSE 100
FTSE NEWS
Plunging US share prices dragged the FTSE 100 into the red following a relatively strong start for the UK’s blue-chip index on Thursday (25 February). It ended the day 0.11% lower at 6,651.96.
- On Monday (1 March), CIPS/Markit publish data revealing the conditions UK manufacturers are facing at present.
- On Tuesday (2 March), Kantar releases figures showing the market shares of all of the major UK supermarkets.
- FTSE Russell will confirm which firms have been relegated from the FTSE 100 as part of its quarterly reshuffle after markets close on Wednesday (3 March).
- On Thursday (4 March), data from UK Finance, the trade body, will reveal how much households borrowed in the fourth quarter.
- On Friday (5 March), Halifax releases house price data for February.
SECTOR IN FOCUS
Brits rushed to book holidays this week after Prime Minister Boris Johnson revealed his plans to gradually lift lockdown.
In a boost to the UK’s beleaguered tourism and hospitality sectors, Johnson announced that domestic overnight stays would be allowed from 12 April.
Johnson stressed that a decision on easing international travel restrictions would not be taken until May, but that didn’t hold holidaymakers back.
According to the BBC, tour operator TUI AG (TUI) reported a 500% increase in bookings for foreign trips shortly after Johnson’s announcement.
London-listed airlines easyJet plc (EZJ) and Jet2 plc (JET2) also reported a 337% and 1,000% surge in bookings, respectively.
Airlines and travel companies have been among the firms most affected by coronavirus due to the restrictions on movement introduced by many governments.
ECONOMIC UPDATE
With the Budget now less than a week away (it takes place on Wednesday 3 March), speculation about what it will contain has gone into overdrive.
A report in the Daily Mail claims that Chancellor Rishi Sunak is planning a “giveaway Budget” to help the economy bounce back from coronavirus.
That includes ditching a number of planned tax increases, such as the mooted 5p rise in fuel duty, according to the report.
Sunak is also reportedly contemplating further VAT and business rate reductions for the hospitality and tourism sectors, extending the furlough scheme and continuing the stamp duty holiday to boost the property market.
It was thought that the Chancellor may introduce a number of tax increases to pay for the spiralling cost of the pandemic.
However, in the past few weeks, various bodies have warned that introducing tax increases too early could derail the economy’s recovery.
FUND WATCH
It may not be glamourous, but investing in insurers can produce decent and stable long-term returns. That’s because, typically, the nature of premiums mean insurers have some degree of certainty about their future income. Polar Capital Global Ins F GBP Acc (IE00B61MW553) invests in insurers all over the world and has returned nearly 71% in five years. It has an ongoing charge of 0.86%.
COMPANY ANNOUNCEMENTS
2 March – Analysts at broker Jeffries upgraded Taylor Wimpey plc (TW.) to a ‘buy’ rating due to the “resilience of housing demand”. Last month, the housebuilder said its 2020 results, which will be published on Tuesday (2 March), should be “in line with market expectations”.
3 March – Multinational insurance giant Prudential plc (PRU) is in the process of demerging its US arm, Jackson Financial Inc, which would list as an independent entity on the New York Stock Exchange. After the demerger is complete, the ‘Pru’, as it is often known, plans to focus its efforts on fast-growing markets in Asia and Africa. Expect to hear more about this in its full-year results, which will be released on Wednesday (3 March).