Weekly Trading Report 25 October 2010 - Last Week's Trading Highlights
The week’s headlines predictably revolved around the UK’s spending review, which saw George Osborne announce budget cuts of £81 billion over the next four years. Mr Osborne outlined austerity measures that will result in the loss of 490,000 public sector jobs, as well as a £7 billion slashing of welfare benefits, on top of the £11 billion savings he announced in May.
Such drastic cuts could initiate further stimulus measures from the Bank of England, though any decision is far from determined, as highlighted by October’s three-way MPC voting split over future monetary policy.
UK markets were generally bullish however, as investors took cues from the ongoing third-quarter earnings season in the US. The FTSE 100 closed above 5750 on Thursday, its highest level for six months. The Dow also performed well, despite a 160-point drop on Tuesday in response to a shock 0.25% interest rate rise in China.
The raft of positive Q3 results from major US companies included financial services heavyweights Citigroup, Bank of America and Goldman Sachs, with a supporting cast of aviation firms Boeing, Delta Air Lines and US Airlines. All six comfortably beat analysts’ expectations to send stocks soaring, while eBay, Amazon and McDonald’s provided equally good numbers.
At home there was little to report compared to the slew of figures from the US. On Tuesday Autonomy Corp announced a third-quarter pre-tax profit rise of 34% compared to a year earlier, ensuring a rollercoaster fortnight for the software company following a recent profit warning.
Home Retail Group however was hit by poor performance at its Argos chain, as underlying profit in the half-year to August dropped 23% to £93 million. Retailers in the UK could be set for further setbacks as official figures showed a 0.2% decline in month-on-month sales in September. With the budget cuts coming into effect, and with VAT to rise from January, retailers could be in for a harsh winter.
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Weekly Trading Report 25 October 2010 - The Week Ahead
Indicators
Looking ahead in the financial spread betting markets, third-quarter GDP data is due in the UK and US, on Tuesday and Friday respectively, with both reports of special interest this week as stimulus packages continue to be discussed on either side of the Atlantic.
US consumer confidence data for October is expected on Tuesday, while in the UK the week closes with October GfK consumer confidence levels and September mortgage approvals.
Company Results and Reports
It’s another full week on the US reporting calendar, starting with quarterlies from Amgen and RadioShack on Monday, and Ford and Western Union on Tuesday. Visa reports on its fourth quarter in midweek, and on Thursday Coca-Cola Enterprises and Microsoft will provide three-month updates.
It’s relatively still in the UK by contrast, but look out for third-quarter results from ARM Holdings on Tuesday and half-year figures from Premier Foods and British Airways on Thursday and Friday 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 25 October 2010', Review by D. Jones, last update: 25-Oct-10
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