FTSE Rallies, Sterling Sinks on UK Rate Cut

The Bank of England cut its benchmark interest rate by 0.25% as had been widely expected. This has sparked significant moves in the UK market today with the FTSE gaining 1.6% and the Pound falling 1.1%. In comparison, the Euro, Aussie, Loonie and Gold are all down about 0.3% against the US Dollar.

Equity market action in North America has been quiet today. US index futures are trading flat to up 0.2% with S&P futures the strongest. Over in Europe, the Dax is up 0.9% and the CAC is up 1.0%.

Although earnings reports have generally been positive again, the market reaction has been mixed. Tapestry*, parent of luxury goods retailer Coach, is up 16.5% premarket after beating expectations on earnings ($2.00 vs street $1.73), sales, and sales guidance, all of which may be seen by investors as a sign of a robust economy. Other notable earnings reports today include Suncor Energy ($1.25 vs street $1.16), BCE ($0.79 vs street $0.72), Qualcomm ($3.41 vs street $2.96), and Eli Lilly ($5.32 vs street $5.01). Amazon.com* and Constellation Software report after the close this afternoon.

Today’s US weekly initial jobless claims report was slightly worse than expected (219K vs street 213K). Tomorrow brings US nonfarm payrolls (street 170K vs previous 256K) and Canada employment (street 25.0K vs previous 90.9K).

*Shares of Tapestry and Amazon.com are held in some portfolios managed by SIA Wealth Management.

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