Why is the FTSE a weirdo?

The FTSE is about to hit an all time high, even though the UK economy is in the toilet.

What’s going on?

We just had data out that suggested UK retail sales had contracted 0.3% while the expectation was +0.4%.

Not good! Especially in the context of growth only being at 0.1% for the month.

Arguably this means we actually didn’t grow and it’ll be interesting to see the revision, since the previous month’s retail sales data was also revised down…

I don’t know how Reeves can continue, but more to the point, what the media might spin is the FTSE being higher as something that is beneficial to the UK…

I mean, it is, but the effect is so tiny.

See, 80% of FTSE firms’ sales are done in USD.

This means they are transacting abroad, and has zero bearing on the domestic consumer.

As sterling has fallen, it makes UK companies less valuable, and they trade at a discount.

This means Americans come in and scoop shares up at a discount, but only due to the currency differential where it under prices UK firms!

So when the BBC says the FTSE is higher, remember that it is, but not because of anything good going on in the UK.

If you want to join the Discord where we provide you with daily stock ideas, click here (40% off).