FTSE 100 preview: Index looking up as investors digest US elections outcome

FTSE 100 preview: Index looking up as investors digest US elections outcome

The UK benchmark index looks set to open higher this morning, recouping some of the previous session’s losses, with investors digesting the outcome of the mid-term elections in the US. Today’s corporate releases include Marks & Spencer’s (LON:MKS) highly anticipated interims which will come after the high street retailer moved to scrap its trading update provided alongside the annual general meeting.

Blue-chip index to open higher

IG’s opening calls suggest that the FTSE 100 will start trading 0.44 percent higher at 7,072 points. The blue-chip index is likely to take cues from Asia, where shares are trading mostly higher this morning amid news that Democrats have won control of the US House of Representatives, while Republicans are seen retaining the Senate.

Reuters meanwhile reports that while a split Congress would put a brake on President Donald Trump’s agenda, such as tax cuts or deregulation, some investors think the Democrats may agree to more spending.

“There are still areas with compromise for spending, so even with a split government I expect more fiscal stimulus ahead. There is some possibility for compromise on infrastructure spending as well,” said Steve Friedman, New York-based senior economist at BNP Paribas Asset Management, as quoted by Reuters, adding that “if there is additional fiscal stimulus, it suggests that fiscal policy is more of a tailwind for US growth and it should, all things equal, be supportive for stocks”.

In the US, shares rose last night as investors awaited the outcome of the mid-term elections. At home, the Footsie closed deep in the red yesterday, giving up 63.16 points to end trading 0.89 percent lower at 7,040.68, pressured by a stronger pound and US election concerns.

Wednesday’s announcements

Today’s macroeconomic releases include the eurozone’s retail sales for September, due out at 10:00 GMT, while in Canada, the Ivey purchasing managers’ index for October will be announced at 15:00 GMT.

In addition to M&S, investors will also focus on updates by Persimmon (LON:PSN) and ITV (LON:ITV), which appointed a new finance chief this week.

By Alice Young
Alice joined the Invezz team after motherhood convinced her to make a career change from actuary-ing. She brings a forensic eye for detail developed through crunching numbers on underwriting satellite insurance and the like.
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