The FTSE 100 was about to jump today after yesterday’s bizarre stumble that saw tech companies suddenly slide into what some traders called a “flash crash”.
In fact, the sharp drop was more of a lightning swing than a crash, triggered by a late-morning slide in Wall Street futures – which indicates how US markets will perform.
The futures market proved right, tech markets fell in the US and Europe followed suit, with the FTSE ending down 0.7%, or 46 points.
Today that is all set to change, with markets forecasting a decent rebound to wipe out most of that fall. The FTSE 100 will drop 43 points to 6957 if IG platform traders are correct. With 68% of them betting before the market opens that it could go higher than that, it promised to be a healthy winning day.
This could lead to a rollback in stuck tech-focused stocks like home delivery giants Ocado and AO World, both of which fell sharply yesterday.
Barclays stock will be the center of attention as it tries to convince investors that it is right to increase the amount of money it is setting aside to pay big staff bonuses. Last week, chief executive Jes Staley set aside an additional £ 335million for the first quarter bonus pot for his investment bankers.
It is optional that he pays all of this, but the markets took a dim view, brutally punishing the stock price on Friday.
His attempts to explain his thinking yesterday to analysts have only led to increased sales amid fears of a political backlash at a time when so many Britons are suffering poverty due to the Covid crisis .
Staley argues that if he doesn’t compete with Wall Street banks on his turf, he will lose his top talent, and that argument surely holds a bit of water no matter what UK politicians are likely to say.
Given that it is the only UK bank with a suitable investment bank, Barclays will have more political and media heat on the issue than Lloyds or NatWest, who cut their investment arms after the financial crisis.
Investors today may, however, feel that the weakness in the stock price has gone too far and start eating Barclays stock again.