Market Commentary January 2021
02 February 2021
January started on a positive note for the FTSE 100, ending the first week on a high as optimism about the vaccination was reflected in share price gains.
As the month went on, concerns about the supply and effectiveness of the vaccine, in addition to the continued lockdowns, were fed through to the stock market. This meant that after a very positive start to the new year, the FTSE 100 ended the month down 0.82%.
For the month of January the top 5 FTSE 100 rising stocks were;
- Johnson Matthey 22.64%
- Ocado Group 21.64%
- Pearson 19.34%
- Aveva Group 14.27%
- Entain 11.60%
In January, Johnson Matthey won a new multi-million pound deal and joint development agreement with SFC Energy for the supply of more sustainable fuel components. This is to start in February 2021 and will last for over 3 years. Fuel cells are becoming increasingly important as society strives for a more sustainable future using hydrogen and methanol to generate low carbon power, which in turn produces minimal harmful emissions. The companies are working in collaboration to provide a route for decarbonisation to achieve a more sustainable and greener future.
For the month of January the top 5 FTSE 100 falling stocks were;
- Rolls-Royce Holdings -16.03%
- Prudential -12.99%
- Natwest Group Plc -11.21%
- International Consolidated Airlines Group SA -10.79%
- Avast -10.25%
The pandemic has had a significant impact on Rolls Royce as a major player in the Aerospace industry. Rolls Royce are paid based on the number of hours their engines are in use, so the sustained travel restrictions are continuing to have an impact on the business. Rolls Royce are now expecting the cash reserves to decrease by £2 billion in 2021, which is more than double the original forecast. In order to try and minimise the additional costs, Rolls Royce have already announced plans to cut approximately 9,000 jobs, saving £1 billion. Despite the challenging times in the near future, they believe it will recover in the long run as it has significant cash reserves it can draw upon if needed.
Throughout January the pound has remained steady against the Euro and the US Dollar, increasing 0.96% and 0.18% respectively.
| 31 January 2021 | 1 month | 6 months | 12 months | 24 months | 36 months | 48 months | 60 months | |
|---|---|---|---|---|---|---|---|---|
| FTSE 100 | 6,407.46 | -0.82% | 8.64% | -12.06% | -8.06% | -14.95% | -9.74% | 5.32% |
| GBP/USD | 1.3698 | 0.18% | 4.66% | 3.78% | 4.56% | -3.48% | 8.90% | -3.85% |
| GBP/EUR | 1.1299 | 0.96% | 1.72% | -5.04% | -1.34% | -1.10% | -3.00% | -14.06% |
This newsletter is intended to provide a general review of certain topics and its purpose is to inform but NOT to recommend or support any specific investment or course of action.
Figures refer to the past and past performance is not a reliable indicator of future results. You may not get back the full amount of your investment.
Sources of information as at close of business 31st January 2020:
FTSE 100: www.investing.com
Currency: www.investing.com
FTSE 100 Risers & Fallers: www.investing.thisismoney.co.uk
Inflation & Interest rates: www.bankofengland.co.uk
