The FTSE is turning lower once more this morning, as we head towards what looks likely to be the worst week for the index since early November.
Sterling strength, coupled with a wider degree of scepticism over whether Trump will really deliver has dealt the recent rally a blow. Theresa May and Phillip Hammond have been doing the round in Davos, trying to talk up the prospects of an unshackled UK, yet the big fear is what the impact will be to jobs, particularly in the City.
December saw UK retail sales suffer their worst decline since 2011, despite the promise of a strong Christmas period from a number of major retailers. Crucially we have seen the impact that pre-Christmas sales such as Black Friday and Cyber Monday have upon December sales, with the months of October and November instead enjoying a boost.
The 1.2% growth for Q4 retail sales goes to show that perhaps we should get used to the festive period looking a little less reliant upon December and instead should take the quarter as a whole.
After an incredibly unpredictable 2016, today’s US inauguration looks set to make the once seemingly impossible, become possible. Donald Trump has somehow managed to gain the Presidency without the support of the lobbyists or his own party. At a time when people are seeking out change, Trump offers that, and the big question from here on in is whether he will deliver on his promises.
Trump’s promise of a major fiscal stimulus plan has come as a welcome respite from the monetary policy led days gone by. Yet, with expectations come the chance of disappointment, and the future of the US stock market seems hugely dependent on Trump delivering on his promises.
Ahead of the open we expect the Dow Jones to open 19 points higher, at 19,751.