US stock markets erased their opening losses this afternoon after the Congressional Budget Office (CBO) announced that the recent budget deal will slice projected deficits nearly in half over the next ten years.
The CBO reported that the US will rack up $3.5 trillion in cumulative deficits over ten years, $3.3 trillion below its previous projection, which provided a boost to the currently sore market sentiment. Helping to lift spirits was also US durable goods orders data, which came in higher than expected.
The S&P 500 and Dow Jones were both almost 0.5% higher at 1167.93 and 11,231.75 by 3.45pm (London time). Across the pond, the FTSE 100 jumped almost 2% this afternoon to 5221.39.
US durable goods orders
Orders for US durable goods climbed more than forecast in July as a surge in demand for aircraft and autos eclipsed a decrease in business equipment. US orders for durable goods rose 4% in July and orders for June were revised up to show a 1.3% drop instead of a 1.9% decline, according to data released this afternoon.
However, orders for core capital goods, which exclude defence and transportation sectors, and are a proxy for future business investment, fell by 1.5%. This was the largest fall in six months.
In addition, shipments of core capital equipment goods edged up 0.2% in July. Orders for transportation equipment jumped 14.5%, while orders for motor vehicles and parts increased 11.5%, the most since January 2003.
The report reflected a rebound in production for vehicle makers, following supply disruptions caused by the earthquake in Japan in March.
‘Minor’ activity
The FTSE 100 was supported today by strength in heavyweight miners, despite low volumes, as investors remain nervous ahead of a key speech by Federal Reserve chairman Ben Bernanke on Friday.
BHP Billiton was up almost 3% to 1943.5p after the miner posted record profits in the 12 months to June. Xstrata was up over 7% during the day and hit an intraday high of 1003.02p. Tullow Oil was another top blue-chip gainer, which rose 5.8% after the oil explorer posted soaring first-half profits.
Macarthur Coal continues to flirt
Today, Australia's Macarthur Coal played up its growth prospects by announcing that it was continuing talks on potential counter-offers, after rejecting a A$4.7 billion bid from Peabody Energy and ArcelorMittal.
Following the announcement, Macarthur's shares rose to A$15.74, just 0.5% above the offer value, suggesting that investors doubt a higher offer will emerge. However, sources in the industry speculate that Anglo American is being lured in for a possible counterbid.
UK and US GDP data eyed
With a lot of uncertainty facing online spread betting markets at the moment on the back of global economic slowdown fears, the ‘bad news is good news’ paradigm makes it difficult to speculate how markets will react to tomorrows GDP numbers from both the UK and US.
However, ahead of Mr Bernanke’s speech in Jackson Hole on Friday, it is perhaps fair to suggest that any sign of a slowdown will see added pressure on him to signal some sort of stimulus to save the world’s largest economy.
Remember that financial spread betting is a leveraged product and can result in losses that exceed your initial deposit. Spread betting may not be suitable for everyone, so please ensure that you fully understand the risks involved.
IG Index
- Live Prices, Charts, Indices, Equities, Commodities, Forex and more >> read the
IG Index Review.
The above content does not constitute investment advice, it is provided purely for information purposes and is delivered as a personal view of the writer. Neither the contributing company (or writer) nor Online-Spread-Betting.com accepts any responsibility for any use that may be made of the content.
'BHP Biliton Rises After Posting Record Annual Profits', Article by IG Index, last update: 24-Aug-11
Content approved / provided by IG Index which is Authorised and regulated by the Financial Services Authority, FSA Register number 114059.
Related articles:
Spread Betting Daily, 18-Apr-12,
The daily afternoon spread betting update featuring the key stock market indices, forex, shares and commodities markets. Daily updates focus on the spread betting markets as the UK closes and the US continues to...see: Spread Betting Daily
Spread Betting News Daily, 17-Apr-12,
The afternoon spread betting update from IG Index - a look at the spread betting markets with the UK closing and the US markets just...see: Spread Betting News Daily
Looking to improve your trading results? Get free trading tips and trading analysis as well as the latest trading offers »
Trading News.
Risk Warning:
Spread Betting carries a high level of risk
to your capital and you can lose more than your initial investment,
it may not be suitable for all investors. Ensure you only
speculate with money that you can afford to lose and that you fully
understand the risks involved and seek independent financial advice where necessary.
Disclaimer:
Online-Spread-Betting.com does not endorse the information and
analysis available on this site. It is provided purely for information
purposes and is delivered as a personal view of the writer. Under no circumstances
is the information hereon to be used or considered as, an offer to sell, or a
solicitation of any offer to buy. The website content does not constitute investment
advice and neither the individual contributor nor Online-Spread-Betting.com accepts any
responsibility for any use that may be made of the content.
* Tax Free Trading:
Tax law is subject to change. It may also differ if you pay tax in a jurisdiction outside the UK.
