Weekly Trading Report 17 January 2011 - Last Week's Trading Highlights
The FTSE 100 spent last week trying to establish a foothold above the 6000 level, despite some disappointing local data. On Tuesday the British Chambers of Commerce reported that the UK economy slowed in the fourth quarter, expanding by 0.4%-0.5%, compared to 0.7% growth the previous quarter. The British Retail Consortium added to recovery concerns, revealing that UK retail sales declined 0.3% in December compared to the previous year.
On Thursday the MPC kept UK interest rates at 0.5% for a 23rd month. In the US, the Fed’s latest Beige Book report described ‘moderate’ US economic growth, with manufacturing sector strength offset by a weak housing sector and high unemployment levels.
The European recovery received a boost from successful bond auctions in Portugal and Spain on Wednesday and Thursday respectively. Portugal raised £1.04 billion through the auction of four- and ten-year bonds, while Spain sold £2.5 billion worth of five-year bonds at a better-than-expected average yield.
The Iberian neighbours are considered strong bail-out candidates, but this show of confidence eased concerns. The German economy provided further good news midweek, rebounding from last year’s 4.7% contraction to show 3.6% growth in 2010. Brent crude oil hit a 27-month high of $98.80 on Wednesday after two Norwegian oil fields were temporarily closed.
A week of mixed fortunes for retailers began with Morrison’s posting a 1% increase in like-for like sales for the six weeks over Christmas. Marks & Spencer announced year-on-year quarterly growth of 2.8% on Tuesday before Sainsbury’s reported record Christmas sales growth of 3.6% for the 14 weeks to 8 January.
Tesco was disappointing by comparison on Thursday, showing only 0.6% growth in like-for-like sales for the six weeks of festive trading. Home Retail Group didn’t escape the winter chill unscathed, as total sales at Argos dropped 3.2% in the 19 weeks to January, while Halfords and Dixons also saw sales decline over Christmas.
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Weekly Trading Report 17 January 2011 - The Week Ahead
Indicators
The spread betting markets see a heavy week for UK economic data, starting with inflation figures on Tuesday, followed by unemployment and retail sales figures on Wednesday and Friday respectively. US investors will be hoping that the Empire State (Tuesday) and Philadelphia Fed (Thursday) manufacturing surveys continue to show a strengthening economy.
Company Results and Reports
Following Monday’s US bank holiday, it’s a huge reporting week across the pond with major banks including Citigroup, Goldman Sachs, Morgan Stanley and Bank of America releasing quarterly results.
Other notable quarterlies come from Apple, eBay, Google and General Electric. At home it’s noticeably quieter, but look out for quarterly releases from SABMiller, BHP Billiton and Invensys.
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 17 January 2011', Review by D. Jones, last update: 17-Jan-11
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