Wall Street fought hard to make headway this afternoon, but a downward revision to US GDP for the third quarter and continued Eurozone woes meant that many investors opted for an early exit well ahead of the Thanksgiving holiday.
By 3.45pm (London time), the Dow Jones was down 0.27% at 11,516.05, and the S&P 500 had lost 0.2% to 1190.37. In London, the FTSE 100 struggled to remain in positive territory, and was up 0.3% at 5238.47.
US GDP figures weaken
If there is one thing that indices spread betting investors didn't want this afternoon, it was a downward revision to US GDP data. However, we got exactly that. Third-quarter GDP growth for the US was cut from 2.5% to 2%, confounding the experts who had forecast that the figure would remain unchanged.
The revision (another, final revision will follow) saw inventories changed, with private inventories down to -1.55% from -1.08%, which rather dents the hopes of those expecting a fourth quarter rebound from the effects of business restocking.
With the news that the US budget 'super committee' (they might want to rename it given its obvious failure) has been unable to agree on any budget cuts, we can now expect substantial reductions in spending at the federal level, as automatic cuts kick in.
Spanish borrowing costs rise
Last week, the leader of the Spanish Popular Party (the victor of the weekend's elections) pleaded for more than just 'half an hour' from international bond markets in order to sort out Spain's fiscal problems.
It seems he got about 48 hours. An auction of three-month bonds saw yields spike to an average of 5.11%, more than double the rate paid at a previous auction. Given that we'll have to wait until mid-December before the new cabinet actually starts making decisions, traders can be forgiven for being picky about investing in Madrid's debt.
Without active and energetic support from the ECB, Spain remains stuck in the same mire as Greece, Portugal and Italy.
Still no relief for retailers
Retail shares are under heavy pressure on the FTSE today, following David Cameron's downbeat comments about the state of the UK economy.
Game Group, French Connection, JJB Sports and Supergroup have all seen their shares fall, as investors continue to flee the sector based on expectations of continued low levels of consumer spending.
While Thomas Cook might not be in the same sector as the aforementioned companies, its warning this morning served as an unpleasant reminder that spending their hard-earned cash is something that UK consumers won't be doing in significant quantities any time soon.
Homeserve gets no reprieve
The travails of home repair firm Homeserve continue, as the shares slump another 12% on the release of the company's half-year figures. The shares now stand at 219p, having been at 478p at the end of October before the company confessed that it had been forced to suspend its sales operations (which prompted its shares to drop precipitously).
Revenue for the six months to 30 September rose by 25% to £213 million, while pre-tax profit was 2% higher at £18.2 million. A reduction in marketing for the full year will see customer numbers drop by 5%, but the interim dividend was boosted from 3.3p to 3.63p.
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.
'Downwards Revision to US GDP Sends Dow Spreads Lower', Article by IG Index, last update: 22-Nov-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.
