Interactive Investor

Market snapshot: FTSE 100 and US futures down again

29th January 2021 08:30

Richard Hunter from interactive investor


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Down in six of the past seven sessions, the top UK index is now where it was at the start of 2021.

The last few turbulent trading sessions have all but wiped out what had been a strong start to the year.

The pandemic remains a major theme, with some havoc being caused by variants of the virus, in turn leading to further lockdowns, strengthened travel restrictions. That means a delay to any economic recovery being given the chance to take hold.

While governments and central banks stand ready to provide further support, the effects of stimulus so far have been to lessen the blow of the pandemic as opposed to promoting growth. As investors question the speed of recovery, the latest stimulus package as proposed by the new President is yet to garner the required support.

As a result, the Dow Jones is now flat on the year, with the S&P 500 adding just 0.8%.

The beacon of light which was the Nasdaq during 2020 continues to provide some optimism, with the index ahead by 3.5% in the year to date. The extra reliance, which the pandemic has underlined in the technology space, has been underpinned by some blowout numbers in the current earnings season from the likes of Apple (NASDAQ:AAPL) and Netflix (NASDAQ:NFLX), with Alphabet (NASDAQ:GOOGL)and (NASDAQ:AMZN) still to come.

As sterling has held up, tightening pressure on the FTSE 100, and with general investor malaise beginning to permeate sentiment, the index has now given up its gains for the year, and currently stands down by 0.8%.

The year’s early gains, as evidenced by a spike of 6% just in the first week, had been driven by recovery and demand hopes which benefited the likes of the banks and oils. In addition, there had been some signs that the UK was slowly coming back into favour as an investment destination.

For the moment, however, the pandemic continues to cast a dark shadow and the timing of any recovery, economic or social, remains unclear.

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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