A brief look at last week and the week ahead, the Weekly Review from IG Index.
Weekly Trading Report 22 February 2010 - Last Week's Trading Highlights
The FTSE rallied strongly throughout most of the week, with daily gains of between 0.49% and 1.48% from the opening bell on Monday until the close on Thursday.
However, retail sales figures released at the end of the week showing a worse-than-expected drop of 1.8% between December and January.
This came in addition to a surprise £4.3 billion increase in the budget deficit during January and cast doubt over the strength of the UK’s economic recovery.
Tuesday’s announcement that inflation had accelerated to 3.5% further highlighted the precarious balancing act being undertaken by the Bank of England as it aims to stimulate growth while controlling the pace of price rises.
Early in the week, Greece's finance minister, George Papaconstantinou, called on fellow Eurozone members to bail out his country in order to alleviate fears that Greece would default on its debt.
However, major Eurozone players took a hard line, suggesting that painful reform measures were required first.
Under current plans Greece will aim to reduce its public deficit from 12.7% to 8.7% over the course of the coming year, a promise that has helped keep European stock markets on a fairly even keel so far.
Adding to EU optimism midweek were strong results from Barclays, which posted a full-year profit of £11.6 billion, up 92% on last year's figures, and French bank BNP Paribas which announced net profit of €1.37 billion for the three months to December.
US markets performed well this week, with the Dow Jones making up for lost time after markets were closed for Presidents Day on Monday by adding 1.68% on Tuesday.
Late on Thursday the Fed increased interest rates for emergency bank loans from 0.5% to 0.75%, the first such move since the height of the financial crisis.
The Fed cited improved market conditions as a catalyst for the decision.
This week European and US regulators also paved the way for Microsoft's purchase of Yahoo's search and search advertising businesses, confirming that it would not harm competition.
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Weekly Trading Report 22 February 2010 - The Week Ahead
Indicators
The UK's second GDP projection on Friday will be keenly awaited to see whether there is any revision to the initial weaker-than-expected 0.1% estimate.
GDP also remains the key focus elsewhere, with the EU and Germany releasing figures on Wednesday and the US on Friday.
Company Results and Reports
A fairly solid UK earnings schedule includes full-year figures from Royal Bank of Scotland on Thursday, followed by Lloyds Banking Group on Friday.
Housing firms Barratt and Redrow also release half-year results on Wednesday and Thursday respectively.
Across the pond, Campbell Soup, Macy's and Heinz put out quarterlies in the US on Monday, Tuesday and Thursday respectively.
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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 22 February 2010', Review by D. Jones, last update: 22-Feb-10
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