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Today's Markets: FTSE turns lower after fresh high, Unilever shares rise after ditching bid

FTSE 100 hit a new post-pandemic high of 7,620, and company updates from Unilever, ABF, and Deliveroo
January 20, 2022
  • FTSE 100 hitting further post-pandemic highs
  • Unilever stand firm on GSK offer
  • Deliveroo shares up 2 per cent after sales boost

Is Boris a busted flush? Of course! But can he cling on? Less savaged by a dead sheep, the big dog, trying to cajole his flock, was headbutted by a gnarly old ram. If Sue Gray’s report lets the PM off, he could yet have enough political capital to hold on, but only for a limited period while the plotters scheme... polling data will not improve much and that’s all that ultimately counts. MPs in marginals are already looking for a new leader but even so-called safe seats are no longer safe (Chesham & Amersham, North Shropshire). Things are just about to get interesting in British politics. Markets won’t be too concerned – the leading candidates like Sunak and Truss seem pretty free-market, fiscally-conservative, on the whole. And remember, Brexit is done. So too, the pandemic. The new leader will hopefully have a brighter outlook. 

After a decent start for stocks in Europe, the main bourses turned broadly lower, after more selling in the US, whilst Asian markets snapped a week’s run of losses as China cut benchmark mortgage rates. As the UK and US tighten policy, they are leaving many peers behind... The Bank of Canada might hike next week, the RBA likely later this year. The ECB is way behind and looks deaf to cries of inflation – German PPI inflation rose to a record-breaking 24.2 per cent in December, data this morning shows. 

Bonds are now moving in a straight line up by any means... US 10s back to 1.85 per cent after touching 1.90 per cent. Maybe a hint of geopolitical risk premium weighing on stocks and helping cool the rout in bonds... does Russia invade Ukraine? Joe Biden thinks it’s likely. Oil prices are a little lighter after touching multi-year highs. US natural gas is also weaker with yesterday’s sharp reversal signaling the end of the uptrend since the end of December. 

The FTSE 100 marked a fresh post-pandemic high at almost 7,620 in early trade but turned lower to trade down about 0.3 per cent after the first hour of trade. 

US stock markets fell, led by a 1 per cent decline for the Nasdaq which is now in correction territory – 10 per cent off its all-time high. The S&P 500 and Dow Jones fell by similar margins as they marked fresh lows, with SPX now trading back in the pre-Santa rally range around 4,500-4,700. Consumer defensives and Utilities outperformed, large cap tech soft again. Futures point to a higher open.

NDX testing the 200-day moving average.

Neil Wilson is the Chief Market Analyst at markets.com