DAILY TRADING STRATEGY

Friday, Mar 02

UK OVERVIEW
U.K. stocks ended with losses Thursday in a downbeat start to March, as attention turned again to U.S. Federal Reserve Chairman Jerome Powell and what he was signaling about U.S. interest rates in fresh testimony to Congress. Shares of ad giant WPP PLC were pummeledafter a financial update, as investors sorted through a new round of earnings reports. Stocks held to losses after the U.K.’s manufacturing PMI marked an eight-month low. The FTSE 100 index lost 0.8% to end at 7,175.64, building on Wednesday’s fall of 0.7%. It ended February trade down 4%, for the worst monthly performance since August 2015, according to FactSet. The pound bought $1.3746, down from $1.3761 late Wednesday in New York. Sterling came under pressure on Wednesday after the European Union laid out its Brexit terms, which were largely dismissed by U.K. Prime Minister Theresa May. The EU document was helping to reignite a debate over Northern Ireland’s future. London-listed blue-chips suffered for a third losing session after losses on Wall Street on Wednesday, as well as mostly downbeat action on Thursday, as of midway through the American session.
Stocks globally have struggled since Tuesday, when Fed chief Powell told congressional lawmakers the U.S. economic outlook has strengthened since December. Investors saw 
that as a sign the Fed could raise interest rates four times this year, instead of three times as it has previously signaled. Powell returned to Capitol Hill Thursday to testify before the Senate Banking Committee. Powell said he didn’t see any evidence of the U.S. economy overheating. Global investors watch U.S. yields and Fed rate policy, as higher U.S. interest rates tend to drive financial markets globally and as many companies do business in the U.S. CRH PLC shares rose 1.8%. The building materials company said 2017 pretaxprofit rose 16% as the company benefited from a positive performance in Europe and the U.S. Rentokil Initial PLC shares tumbled 9.2% even as the pestcontrol company said 2017 pretaxprofit rose more than threefold to £713.6 million ($986.7 million). Burberry Group PLC climbed 3.8% after the British luxury goods maker named Italian designer Riccardo Tiscias creative director. The company has been struggling with weak sales in the U.S., its largest market. Shares in Sky PLC were up 1.8% after the British broadcaster announced a deal with Netflix Inc. to carry the U.S. streaming media on its European set-top services. IHS Markit/CIPS said its U.K. February manufacturing PMI came in at 55.2, the lowest level in eight months. That compares with the 55.3 reading in January and FactSet’s consensus estimate for February. 

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