Unsurprising news that retail sales slumped significantly in January thanks to the latest lockdown left the FTSE 100 struggling for direction on Friday, broadly unmoved at a little above the 6,600 mark, says AJ Bell investment director Russ Mould.
โA strong pound isnโt helping the index โ crimping the relative value of its dominant overseas earnings in the latest reminder that the multi-national index is in no way a proxy for the UK economy.
โThe run for sterling towards the $1.40 mark against the dollar reflects, in part, optimism about what a rapid vaccine roll-out would mean for reopening in the UK, setting quite high expectations ahead of Boris Johnsonโs statement on the easing of restrictions on Monday.
โAn interesting story continues to play out in the commodities space as gold prices remain dull. The precious metal is often seen as an inflation hedge so you might have expected the growing concern about rising prices to see it shine.
โIt suggests gold may have been supplanted for now by other alternative assets like cryptocurrencies. However, before it is entirely written off, it is worth remembering that it has an extremely long history as a store of value.โ
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