2nd Day of FTSE Falls.
The FTSE 100 index has again continued its downward run of around 1.6% today and 0.60% yesterday. It currently stands at 7,373 (4pm) having nearly peaked on Tuesday at 7,452.
Why FTSE volatility?
Many shares are now starting to go ex-dividend. Ex-dividend means that if you buy the share today, it is too late to benefit from the next profit-share/dividends payment. Any dividend will be paid to the previous shareholder i.e. the current shareholder excluded. This forces demand down. Companies that have recently gone ‘ex-divi’ include BT and Lloyds Bank.
UK trade data is weaker than expected with the trade deficit being higher than expected for June and a further slowdown in the economy expected.
Finally, the war of words between the US and North Korea has escalated in the last 2 days “fire and fury” said President Trump and North Korea responding that they will have a missile “strike plan” for Guam (a US territory in the Pacific) by the middle of August, that if approved by Kim Jong-un, would fire missiles over Japanese air space, not to hit Guam but no doubt land in the sea outside territorial waters, and in doing so demonstrate their capability to strike the US.
Cuban missile crisis? We hope not. We don’t like either side’s ‘finger on the trigger’ and suspect this is all a little ‘puffing out chests’ given the increased sanctions imposed on North Korea by the United Nations. Concerning to us is the obvious slowdown of economic activity in the UK.