London markets have opened steady this morning despite seeing Wall Street suffer one of its worst sessions in a year on Friday.
The FTSE100 declined sharply in late trading last Friday on the poor US opening, but the early signs today seem more positive, with the index currently 0.02% ahead to 5907.70.
Oil giants are leading the way so far on record prices, with BP 1.64% ahead and Royal Dutch Shell 1.57% up. On the flipside, British Airways is hurting on the price increases, down 3.32%.
All major US indices suffered on Friday, as higher crude costs and a huge jobless rate increase smashed investor confidence.
The Dow Jones IA fell nearly 400 points at close last week, down 3.13% to 12209.81; while the broader S&P 500 dipped 3.09% to 1,360.68 and the Tech heavy Nasdaq declined 2.96% to 2,474.56.
Most of the blame can be attributed to the rise in the US jobless rate, up from 5% in April to 5.5% last month. The May result was the highest since 2004 and a sharper increase than the 5.1% predicted.
Royal London Asset Management economist Ian Kernohan says the jobless rate rise will force those predicting no recession for the US to re-examine their reasoning.
“Markets are in real danger of getting too bullish too early on the outlook for the US economy, which remains poor,” he says.
“In my view, a recession in 2008 still remains the most likely outcome."IFAonline
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