Global equity markets continued to rally, with the FTSE 100 up 0.57% and the S&P 500 up 0.46% by Thursday’s close. Familiar themes – the ‘Trump trade’, Brexit and the Eurozone’s problems – rumbled on in the background, but investors were more interested in company earnings and sector-specific developments.
In the UK, extrication from the European Union was again the main political preoccupation, as the House of Commons passed the bill that enables the government to formally begin the Brexit process. More domestic developments were in focus in the markets, however, with the publication of the government’s long-awaited white paper on housing. This included a number of measures designed to speed up the development of available land. A £3bn fund was announced to help smaller developers build more, and there was encouragement for the build-to-rent sector. Shares in housebuilders performed well, with Persimmon, Taylor Wimpey and Barratt all up strongly. Investors were heartened by the record results delivered by FTSE-250-listed Redrow, which announced a 35% rise in pre-tax profit in the second half of 2016.
Redrow was among the companies helping the more domestically oriented FTSE 250 to an all-time high during the week.
Mining stocks were among the biggest fallers. A strike at Chile’s Escondida copper mine weighed on the prices of BHP Billiton and Rio Tinto, both of which have significant interests there. The oil price also fell back on renewed worries about oversupply.
European markets underperformed their UK and US counterparts, with the FTSE World Europe (Ex-UK) Index up just 0.21% by Thursday’s close. Early in the week, sentiment suffered on concerns about the Greek debt crisis and the French presidential election. As the centre-right candidate François Fillon is struggling with corruption allegations, Front National candidate Marie Le Pen’s chances of victory look to have increased. Markets reacted with dismay, although strong earnings from European companies allowed the index to scrape into positive territory for the week to Thursday’s close. Among the firms announcing good results were Total, Société Générale, Zurich and Commerzbank.
In the US, President Trump’s travel ban remained suspended after a federal appeals court ruled against it on Thursday. “SEE YOU IN COURT, THE SECURITY OF OUR NATION IS AT STAKE!” tweeted the president. He does, however, have just one court left: the US Supreme Court, which is currently evenly divided between liberal and conservative judges. A split decision there would permanently prevent the ban from coming into force.
Meanwhile, a clash with the White House boosted shares in fashion retailer Nordstrom. During the week, the company dropped Ivanka Trump’s clothing line. This prompted an angry Twitter response from the president – “Terrible!” – and a surge of almost $450 million in the company’s market capitalisation. Consumer stocks were well represented among the S&P 500’s top performers, over the week, with toy-maker Hasbro leading the pack.
And finally …
For those still gripped by post-Christmas malaise, a report by employment lawyers ELAS makes for interesting reading. This Monday was National Sickie Day – the day on which illness is most likely to compel us to take the day off. Genuine or not, around 350,000 sick days are expected to have been taken on Monday. While some of these may be genuine, the ELAS report highlights the extraordinary creativity that the UK’s workforce brings to the art of pulling a sickie.
Among the worst excuses for absenteeism were getting arrested, being too drunk to drive and having to throw a birthday party for a dog. A dog was also blamed for eating one worker’s shoes, while someone else was trapped at home because their trousers were in the wash. And for one individual, the get-out was wonderfully non-specific: “I have no way to get to work”.
For the resourceful shirker, all of that provides ample food for thought. You may have missed the boat for Monday, but you’ve plenty time to prepare an artfully crafted get-out for 2018.