Cookie Policy

We use cookies on our website and have placed these on your computer. By continuing to use our website you consent to this. For more information, including how to change your cookie settings and to disable our non-essential Google Analytics cookies, please refer to our Cookie Policy. If you do not wish to be reminded of this on each visit, please use the close button.

Newsround: FTSE flat as US stocks advance

13 April 2018

Tags: Macro Economics


The FTSE 100 closed a touch lower on Thursday (12 April), just above the 7,250 mark, as a stronger pound helped undermine the relative value of constituents’ overseas earnings.

Next Monday (16 April) US retail sales will be in focus. The last three months have seen sales shrink – the first time this has happened in five-and-a-half years. In the early hours of Tuesday (17 April) morning China’s GDP growth is reported (see Economic update). This announcement is followed later in the day by UK earnings data and the building permits release in the US. The latter offers a good insight into future construction activity as obtaining a permit is one of the first steps involved in constructing a new building. On Wednesday (18 April) UK inflation figures for March are out. Inflation dropped more than expected to 2.7% in February. Next Thursday (19 April) UK retail sales are published – several names on the British high street have run into financial difficulties amid pressure on consumer spending. 

Sector in focus 

Consumer antivirus provider Avast has unveiled plans to float on the London stock market in early May, providing another investment option of scale for investors in the exciting cyber security space. It hopes to raise about $200 million of cash (roughly £140 million at current exchange rates), although that will largely be used to cut debt of somewhere in the $1.4 billion to $1.6 billion ballpark. Reports suggest a market valuation of around $4 billion. 

This is a company whose products many investors may already be using without realising it. Avast owns the highly popular AVG (which it bought in 2016) suite of antivirus tools. It plans to pay dividends in the future. Operating cash flows came in at $307 million last year, amounting to 75% of adjusted earnings. The IPO will add to a burgeoning cyber security sector in London, with Avast joining companies like Sophos (SOPH) as well as smaller outfits such as NCC (NCC) AIM newcomer GRC International (GRC:AIM).

Economic Update

Chinese economic growth can often have a significant impact on the FTSE 100 due to the weighting of index towards miners and China’s status as the largest global consumer of the metals they produce. In this context upcoming first quarter GDP figures from the world’s second largest economy are likely to be closely scrutinised next Tuesday (17 April) – particularly given the recent war of words over trade between the US and China.

ETF Watch

As well as traditional stock market indicies and asset classes like commodities, exchange-traded funds can also be used to capture specific investment themes, including the growth of cyber security. ETFS ISE Cyber Security (ISPY) offers exposure to a basket of global companies involved in this industry for an ongoing charge of 0.75%. 

Company Announcements

17 April - Roadside assistance provider AA (AA.) releases full year results on 17 April and investors will be eager to see what new changes CEO Simon Breakwell has in store. Breakwell shocked the market in February with his new strategy for the company and slashed the dividend. He’s not been in the job long but has the blessing of renowned fund manager Neil Woodford who increased his stake following the update.

17 April – Mining firm Rio Tinto (RIO) will publish its first quarter update at 11.30pm – reflecting its listing in Australia. During the second part of March, Rio Tinto announced $4.15bn worth of coal asset sales meaning it has now exited the coal industry completely. The sales should complete in the second half of the year and most of the proceeds are expected to be returned to shareholders.

Writer: Tom Sieber Tags: Macro Economics

You can start investing today through any of our account options:

Dealing Account

Access a wide range of global investments in this flexible, unrestricted account.

Find out more

Stocks and Shares ISA

Take advantage of tax free investing with our Stocks and Shares ISA today.

Find out more

Self-Invested Personal Pension (SIPP)

From great value to best-in-class, access the SIPP to suit your needs through our extensive network of providers.

Find out more

I've still got questions!

We’re on hand to help at our Customer Experience Centre on 0345 0700 720

Selftrade does not provide investment advice. This article is the authors view and is not the view or opinion of Selftrade and Selftrade accepts no liability for any loss caused as a result of the use of this information. The opinions expressed are those of the author at the time of writing and should not be interpreted as investment advice.

The value of investments can fall as well as rise and any income from them is not guaranteed and you may get back less than you invested. Past performance is not a guide to future performance. We do not provide advice or make recommendations about investments. If you have any doubts about the suitability of an investment, you should seek advice from a suitably qualified professional adviser.

If you have a Stocks and Shares ISA, make sure you get the best value for your investments. We are ranked top for price on large portfolios (Platforum, 2018).

Open an account today and we’ll cover any transfer fees up to £100.*

*T&Cs apply.

Open a Stocks & Shares ISA

Find out more