Weekly Trading Report 28 March 2011 - Last Week's Trading Highlights
Stock markets were able to rally in broad terms last week, mainly due to hopes that the nuclear crisis in Japan was edging closer to stabilisation. The Nikkei index jumped 4.4% on Tuesday, in what was dubbed a 'relief rally', while the FTSE and the Dow climbed to near pre-earthquake levels on Thursday.
Further gains were held in check, however, by continuing Oil supply concerns in Libya and the renewed threat of a Portuguese bailout. Portugal's government collapsed on Wednesday, following failed budget proposals, leading to Lisbon's debt reaching euro lifetime highs. S&P downgraded Portugal's sovereign debt rating by two notches as a result.
In the UK, the main focus was Wednesday's Budget, where George Osborne surprised many by cutting corporation tax by 2% and fuel tax by 1p per litre. These breaks were offset, however, by increased taxes on banks and North Sea oil companies, and a carbon levy likely to raise the average consumer's energy bill by £17 in 2015.
The Office for Budget Responsibility also cut its 2011 growth forecast from 2.1% to 1.7%, due in part to a spiralling inflation rate, which soared to 4.4% in February, according to Tuesday's figures. Despite the ongoing threat of inflation, Wednesday's MPC minutes revealed an unchanged 6-3 vote against raising the bank rate.
Retail was also in the spread betting market’s spotlight. Fashion vendor Next and B&Q owner Kingfisher both surprised to the upside on Thursday, posting year-on-year profits of £551 million (up 9%) and £670 million (up 22.5%) respectively.
Sainsbury's did not fare so well, however, unveiling slow Q4 sales growth of just 1% against 3.6% the previous quarter. All three companies warned of tough times ahead, and with February UK retail sales volumes falling by 0.8% on the previous month, it looks set to be a difficult year on the high street.
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Weekly Trading Report 28 March 2011 - The Week Ahead
Indicators
Following the excitement of last week's busy UK schedule, a quieter few days is interrupted on Tuesday by mortgage approvals data and final GDP figures for the fourth quarter, where a further downgrade would provide a fresh setback to the UK economy.
It's an important week for US jobless data, with Wednesday's Challenger job-cut report followed up on Friday with the influential non-farm payrolls.
Company Results and Reports
The company calendar is also relatively sparse this week, with investor attention likely to focus on full-year numbers from blue-chip copper miner Kazakhmys on Tuesday, followed by six-month figures from house builder Bellway the following day.
Reporting comes to a virtual standstill across the Atlantic, where used car retailer Carmax releases Q4 data on Thursday.
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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 28 March 2011', Review by D. Jones, last update: 28-Mar-11
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