Weekly Trading Report 27 December 2010 - Last Week's Trading Highlights
Despite a week of disappointing economic releases, the FTSE 100 briefly breached the symbolic 6000 barrier on Thursday 23 December for the first time since June 2008.
The week leading up to Christmas began with the CBI downgrading its UK growth forecast from 0.3% to 0.2% for the first quarter of 2011. Then on Tuesday UK government borrowing hit a record high of £23.3 billion and the ONS revised Q3 growth down from 0.8% to 0.7% the following day.
US economic growth for Q3 was upgraded on Wednesday, however, and consumer spending rose on Thursday for a fifth consecutive month.
Retailers were in the spotlight ahead of Christmas, as severe weather conditions in the UK disrupted what is usually the year’s busiest shopping weekend.
The weather is estimated to have cost retailers as much as £750 million in lost sales. John Lewis was one to buck the trend, however, reporting near-record sales in the Christmas week.
It was a punishing week for Deutsche Bank, who must pay a £360 million fine for assisting in tax evasion in the US between 1996 and 2002. Similarly, the world’s largest vehicle manufacturer, Toyota, has agreed to a £20.8 million fine for its handling of car recalls.
Europe’s consumer confidence reading fell to -11 on Monday 20 December, and Moody’s placed Portugal’s A1 credit rating on review the following day.
Speculation that France’s AAA credit rating could be under threat and a warning from Fitch Ratings that Greek debt may be downgraded to junk put further pressure on the euro.
There was some reassurance, however, when it emerged midweek that China would help the eurozone manage its ongoing debt crisis. Despite this, the continental currency traded near a three-week low against the dollar on Thursday 23 December and faced weekly losses against 14 of its 16 major counterparts.
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Weekly Trading Report 27 December 2010 - The Two Weeks Ahead
Indicators
The calendar is unsurprisingly quiet in the week following Christmas, but things pick up in the New Year with manufacturing, construction and services PMI figures from the UK on Tuesday 4, Wednesday 5 and Thursday 6 January respectively.
The US opens 2011 with FOMC minutes on Tuesday 4 January and non-farm payrolls on Friday 7 January, when we also expect Q3 final GDP figures from Europe.
Company Results and Reports
There’s little of note on the UK earnings schedule for the week leading to the New Year, but retailer Next opens 2011’s results rota with fourth-quarter figures on Wednesday 5 January.
The corporate calendar is fairly bare across the Atlantic as well, but look out for third-quarter numbers from wine company Constellation Brands and first-quarter results from agricultural biotechnology corporation Monsanto on Thursday 6 January.
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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 27 December 2010', Review by D. Jones, last update: 27-Dec-10
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