A brief look at last week and the week ahead, the Weekly Review from IG Index.
Weekly Trading Report 21 June 2010 - Last Week's Trading Highlights
The week started with the newly created Office for Budget Responsibility downgrading the UK’s growth forecast for 2011 from 3-3.5% to 2.6%.
While this was sobering, there was some welcome news as the ONS reported that the UK’s inflation rate in May dropped to 3.4%, from April’s 3.7%.
In a further move in the coalition government’s efforts to beef up financial regulation, George Osborne used his Manor House address on Wednesday to state that the FSA would be broken up, with more regulatory power going to the Bank of England.
BP suffered another sorry week as it was forced to cancel its dividend payment and endure continued criticism from the US government; however there was a small glimmer of hope as the energy giant’s shares rallied on Thursday following the finalisation of a $20 billion compensation deal.
Closer to home, both Sainsbury’s and Tesco reported disappointing quarterly growth figures. The increased VAT rate of 17.5% and higher fuel prices, which hit consumer spending power, were cited as the main reasons for the lacklustre growth.
Elsewhere, clothing brand Ted Baker reported a 20% increase in retail sales in half-year results, compared with the same period last year, while BskyB saw its share price spike on Tuesday following reports that News Corporation is planning to take full control of the satellite broadcaster.
Looking at the wider markets we saw consecutive gains for equity markets, including the FTSE 100 and Wall Street.
Thursday saw the FTSE push out to its best level in a month as investors appeared less inclined to hit the ‘sell’ button despite Greece’s credit rating being relegated to junk status by Moody’s on Tuesday.
Analysts cited the relaxed mood towards European debt and a stronger Euro as reasons for the resilience.
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Weekly Trading Report 21 June 2010 - The Week Ahead
Indicators
All eyes in the UK will be focussed on Tuesday’s emergency budget report, and with rumours of tax hikes and painful spending cuts already well-publicised, it’s sure to be an eventful week for the FTSE and Sterling.
Eurozone consumer confidence data on Tuesday should make for interesting reading, after the economic uncertainty in the region over the past few months.
On Wednesday the FOMC announces interest rates in the US, where it remains to be seen whether US monetary policy will remain unchanged.
Company Results and Reports
The UK companies schedule is fairly light next week, with full year results from software supplier Kewill on Monday and from property developer Berkeley Group on Friday.
In the US, expect to see quarterly results from retailer Walgreen and software firm Adobe Systems on Tuesday, and from sportswear giant Nike on Wednesday.
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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 21 June 2010', Review by D. Jones, last update: 21-Jun-10
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