FTSE 100 closing price of 7,541.1 (-0.3%)
Cineworld rises after strong December
Currys declines following Christmas trading update
Oil notches further gains
USD edges higher despite soft US data
UK GDP hits pre-pandemic peak before Omicron
Bitcoin steady, Doge outperforms on Tesla news
By Samuel Indyk
Investing.com – The FTSE 100 finished Friday’s session lower amid global stock weakness following disappointing US data and bank earnings. Retail sales and industrial production data both missed estimates, while JPMorgan (NYSE:JPM) slipped following its fourth quarter results.
Domestically, Cineworld (LON:CINE) was in focus following its trading update for December. The cinema chain operator said it turned cash flow positive in Q4 as group revenue returned to 88% of 2019 levels in December.
“Cineworld was boosted in the fourth quarter by the release of films such as the latest instalment in the Spiderman franchise with revenue on course to move back to pre-pandemic levels,” AJ Bell Investment Director Russ Mould said, “forthcoming releases of a rebooted Top Gun film and the latest Jurassic World adventure should help this year too,”
Currys (LON:CURY) was a notable underperformer, falling over 6% following its Christmas trading update. In the 10 weeks ending January 8th 2022, like-for-like sales at the electronics retailer fell 5% compared to the same period a year ago. Full year adjusted profit before tax is now expected to be around £155 million, below the previous guidance of £160 million.
“News that the group was slightly lowering its full-year guidance hasn’t been received well,” said Hargreaves Lansdown (LON:HRGV) Equity Analyst Matt Britzman. “Those looking longer term should take solace in the fact the medium term targets are intact and the planned share buyback is commencing.”
WTI and Brent crude futures were again higher and heading for the fourth consecutive week of gains as fears that the Omicron variant would cause another major slowdown in the global economy continue to fade. Meanwhile, the supply picture remains fragile with analysts at JPMorgan this week forecasting a rise in prices as high as $125/barrel this year as OPEC spare capacity falls.
The USD retraced some of its weekly losses on Friday but the US Dollar Index was still heading for its fourth consecutive week of declines.
GBP was soft despite strong growth figures. The UK economy grew 0.9% in November from a month earlier, taking the economy back above its pre-pandemic peak. The strong growth occurred before the Omicron variant took off in the UK and growth is expected to have moderated last month, although whether this will be enough to stop the Bank of England from more tightening in February remains to be seen.
“The hit to GDP across December and January may not amount to much more than half a percent, not least because the recent booster vaccine and testing expansions may help boost health spending yet further, offsetting weakness elsewhere,” ING analysts said in a research note. “For the Bank of England, this suggests the chances of a February rate hike are rising.”
Bitcoin was relatively steady but trading below $44,000 heading into the weekend.
“Bitcoin ran into resistance a little shy of the December support zone and could see $40,000 come under pressure once more,” said OANDA Senior Market Analyst Craig Erlam. “This level is likely to be heavily protected so it will take a big push to break that support.”
MARKET WRAP: FTSE edges lower, oil notches further gains, Dogecoin surges
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