A brief look at last week and the week ahead, the Weekly Review from IG Index.
Weekly Trading Report 12 July 2010 - Last Week's Trading Highlights
The FTSE made significant progress last week, adding 141 points on Tuesday and a further 50 and 91 points on Wednesday and Thursday respectively.
This rally has seen the UK’s leading index break through key resistance levels, once again passing the 5000 mark on the upside.
The market was spurred on by hopes that European banks will pass EU stress tests and banking stocks led the rally, with some adding more than 15% to their share prices over two days.
The ECB’s announcement on Thursday that it would keep interest rates at 1% helped cement gains for shares.
A similar pattern has been repeated across global equity markets this week. The Japanese Nikkei added 2.8% on Thursday as bullish sentiment in Asia continued to boost confidence.
In the US, the Dow Jones rose rapidly on Wednesday and Thursday, gaining 274 and 120 points consecutively. Nevertheless, these gains were made against a less-than-ideal backdrop; figures out on Tuesday showed that the US service sector grew at its slowest pace since February, adding to an earlier fall of 125,000 in Non Farm payrolls.
Both pieces of news were widely seen simply to reflect a slowdown in the recovery, rather than the start of a double-dip scenario.
BP were once again in the news this week, after announcing that the cost of the oil spill in the Gulf of Mexico had passed $3 billion. The oil giant also warned that costs associated with the disaster would continue to rise significantly.
There was mixed news for retailer Marks and Spencer as its share price dropped on Wednesday, after it warned that lower consumer confidence could impact future earnings. Nevertheless, M&S posted a third consecutive rise in quarterly sales.
JJB Sports reported like-for-like sales for the six weeks to 4 July that were 22.3% better than last year.
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Weekly Trading Report 12 July 2010 - The Week Ahead
Indicators
It’s relatively quiet on the UK calendar this week, but the imminence of the US reporting season means a heavier schedule in America, with Alcoa and Google releasing quarterly results on Monday and Thursday respectively.
Keep an eye on the banking sector towards the end of the week, with quarterlies from JP Morgan Chase on Thursday and Bank of America and Citigroup on Friday.
Company Results and Reports
The week’s UK economic indicators begin with Monday’s final GDP for the first quarter. Also of interest will be inflation data for the UK and Eurozone on Tuesday and Wednesday respectively, along with unemployment figures midweek.
Across the Atlantic look out for retail sales numbers on Wednesday, and then inflation data and the latest University of Michigan consumer sentiment survey on Friday.
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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.
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For previous weeks see below.
Note - 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.
'Financial Spread Betting 12 July 2010', Review by D. Jones, last update: 12-Jul-10
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