A brief look at last week and the week ahead, the Weekly Review from IG Index.
Weekly Trading Report 2 August 2010 - Last Week's Trading Highlights
The week started positively for the FTSE 100, with equities making double-digit gains on consecutive days to close at a multiple week high of 5365.67 on Tuesday.
The rally was driven by banking shares, as the sector benefited from the solid results of pan-European stress tests.
Only seven of the 91 tested banks failed, with every UK bank passing the test. The news saw Lloyds and Barclays gain over 3% each on Monday and buoyed stock indices across Europe. By midweek, however, the rally had run out of steam and the FTSE closed at 5313.95 on Thursday, just one point above Monday’s opening level.
Corporate results were also mixed this week, starting with Swiss bank UBS announcing expectation-beating quarterly profits.
The bank made a net profit of 2 billion Swiss Francs (or £1.2 billion) between April and June, considerably outperforming analysts' estimates of 1.3 billion Swiss Francs. Deutsche Bank reported a €1.2 billion (£1 billion) net profit, up from €1.1 billion a year ago.
However, BP announced on Tuesday that it has set aside $32.2 billion to cover oil spill costs, leading to a quarterly loss of $17 billion, a UK record. Aircraft giant Boeing reported quarterly profits of £504 million, down by a fifth from last year as deliveries fell.
In the US, the influential Beige Book survey indicated that economic activity had continued to increase over the past seven weeks. But the report, released on Wednesday, also suggested there were signs of a slowdown, with only 10 of the 12 Federal Reserve districts reporting increased activity, down from all 12 last time.
The week ended with markets on the back foot, as US GDP figures showed that economic growth slowed to 2.4% during the second quarter. This was down from a revised first-quarter growth rate of 3.7%. The Dow dropped just over 70 points as the news broke.
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Weekly Trading Report 2 August 2010 - The Week Ahead
Indicators
Thursday is the big day for macroeconomic news, with interest rate announcements from the BoE and ECB. Other indicators include PMI releases across Europe on Monday, Eurozone retail sales midweek and the all important US Non Farm payrolls on Friday.
Company Results and Reports
In the UK analysts will be watching to see if recent momentum enjoyed by the banking sector has had a positive impact on the half-year results for Barclays, Lloyds, RBS and HSBC. Miners also feature prominently, with announcements from Antofagasta midweek and Rio Tinto on Thursday.
Across the Atlantic keep an eye out for quarterlies from Procter and Gamble, retailer Watson Pharmaceuticals and media conglomerate News Corp as the earnings season draws to a close.
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Remember that financial spread betting is a leveraged product and can result in losses that exceed your initial deposit. Spread betting may not be suitable for everyone, so please ensure that you fully understand the risks involved.
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- Live Prices, Charts, Indices, Equities, Commodities, Forex and more >> read the
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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 2 August 2010', Review by D. Jones, last update: 2-Aug-10
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