The FTSE Finish Line - July 13 - 2023
FTSE & Sterling Shine As Miners Lead The Charge, Homebuilders Weigh
The FTSE recorded a second day of gains on Thursday heading into the close; the blue chip index was up 0.6%, driven by the positive performance of energy and mining stocks. The increase in commodity prices contributed to the upward movement, with Glencore leading the way by printing 2.8% in the green. AngloAmerican also continued its positive run, rising 2.45% during the day. In addition to the strong stock market performance, Sterling strengthened after official data revealed that Britain's economy contracted by a smaller-than-expected margin in May. This data suggests that the country may be able to avoid a recession in the near term. The positive economic news.
On the negative side of the ledger shares of Barratt Developments, the largest homebuilder in the UK, experienced a 4% decline to 399.1 pence in morning trade. The company issued a warning stating that it would construct significantly fewer homes in the current fiscal year due to a weak market affected by rising mortgage rates and persistent inflation, which have deterred potential buyers. Barratt Developments expects to build between 13,250 and 14,250 units in the year ending June 30, 2024, compared to 17,206 homes constructed in the previous year. This reduction in expected output reflects the challenging conditions in the housing market. Furthermore, the company reported a decline in the rate of weekly bookings per Barratt site for the fiscal year 2023, which stood at 0.55, representing a 32.1% year-on-year decrease.
Barratt's announcement had a ripple effect on its FTSE-100 peers, with Taylor Wimpey and Persimmon experiencing declines of 1.7% and 0.5%% respectively. Despite the recent drop, Barratt Developments had seen a 5.3% increase year-to-date as of the previous close. These developments underscore the impact of the weak market conditions on Barratt Developments and the broader homebuilding sector in the UK. Market participants closely monitor the performance of companies in the housing market as it can reflect the overall health of the economy and consumer sentiment.
FTSE Intraday Bullish Above Bearish below 7400
Above 7550 opens 7660
Primary resistance is 7600
Primary objective 7193
20 Day VWAP bearish, 5 Day VWAP bullish
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!