A brief look at last week and the week ahead, the Weekly Review from IG Index.
Weekly Trading Report 19 July 2010 - Last Week's Trading Highlights
The FTSE surged 104 points (+2%) to 5271.02 on Tuesday, boosted by an increase in UK retail sales in June and news that BP’s efforts to stem the flow of leaking oil in the Gulf of Mexico were finally proving successful.
Positive data failed to keep the FTSE buoyant during the middle of the week, however, as weakness in the oil and gas sector outweighed news that UK unemployment had reached its lowest levels for a year, causing the index to pare some of its earlier gains.
Figures from China on Thursday, showing that growth has slowed, dragged mining stocks lower, sending the FTSE down 42.23 points (-0.80%) to 5253.52.
In Europe the mood was dominated by worries over banks and sovereign debt levels. The week opened with Italy’s biggest lender, UniCredit, proposing the launch of a financial rescue fund to help with future bail-outs.
Greece’s government bonds sale brought some relief to the country on Tuesday. The offer was oversubscribed, but this was accompanied by news that Moody’s had downgraded Portugal’s debt rating from AA2 to A1, putting more focus on the country's parlous debt situation.
Macroeconomic data was promising however, with industrial production in the 16-member Eurozone climbing 0.9% month-on-month in May.
In the US, the second-quarter earnings season helped propel financial markets higher. Alcoa set the tone on Monday, announcing a return to profit of $136m, versus a $454 loss over the same period a year ago.
JP Morgan also posted strong growth figures, including a net income increase of 75% year-on-year. Google earnings missed analyst expectations though, causing the internet giant’s share price to decline 4% on Thursday despite a sharp leap in profit.
At home, BP’s share price advanced daily, while luxury goods brand Burberry exceeded forecasts, announcing a first-quarter underlying revenue jump of 24%.
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Weekly Trading Report 19 July 2010 - The Week Ahead
Indicators
The Bank of England’s latest minutes will attract attention on Wednesday following last month’s split vote, while economists will closely monitor June retail sales numbers on Thursday.
Other significant UK data to look out for includes the first GDP estimate for the second quarter on Friday.
Across the pond, analysts will be examining the latest housing data on Tuesday and Thursday to see how the economic recovery is shaping up.
Company Results and Reports
The US financial services sector features prominently this week, with quarterlies from Bank of New York and Goldman Sachs on Tuesday.
Technology and internet stocks dominate both ends of the week with quarterlies from Yahoo and Apple on Tuesday, followed by Amazon and Microsoft on Thursday.
Back home significant blue-chip announcements include GlaxoSmithKline on Wednesday and Vodafone on Friday.
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Weekly Trading Report 12 July 2010 - Last Week's Trading Highlights
The FTSE made significant progress last week, adding 141 points on Tuesday and a further 50 and 91 points on Wednesday and Thursday respectively.
This rally has seen the UK’s leading index break through key resistance levels, once again passing the 5000 mark on the upside.
The market was spurred on by hopes that European banks will pass EU stress tests and banking stocks led the rally, with some adding more than 15% to their share prices over two days.
The ECB’s announcement on Thursday that it would keep interest rates at 1% helped cement gains for shares.
A similar pattern has been repeated across global equity markets this week. The Japanese Nikkei added 2.8% on Thursday as bullish sentiment in Asia continued to boost confidence.
In the US, the Dow Jones rose rapidly on Wednesday and Thursday, gaining 274 and 120 points consecutively. Nevertheless, these gains were made against a less-than-ideal backdrop; figures out on Tuesday showed that the US service sector grew at its slowest pace since February, adding to an earlier fall of 125,000 in Non Farm payrolls.
Both pieces of news were widely seen simply to reflect a slowdown in the recovery, rather than the start of a double-dip scenario.
BP were once again in the news this week, after announcing that the cost of the oil spill in the Gulf of Mexico had passed $3 billion. The oil giant also warned that costs associated with the disaster would continue to rise significantly.
There was mixed news for retailer Marks and Spencer as its share price dropped on Wednesday, after it warned that lower consumer confidence could impact future earnings. Nevertheless, M&S posted a third consecutive rise in quarterly sales.
JJB Sports reported like-for-like sales for the six weeks to 4 July that were 22.3% better than last year.
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Weekly Trading Report 12 July 2010 - The Week Ahead
Indicators
It’s relatively quiet on the UK calendar this week, but the imminence of the US reporting season means a heavier schedule in America, with Alcoa and Google releasing quarterly results on Monday and Thursday respectively.
Keep an eye on the banking sector towards the end of the week, with quarterlies from JP Morgan Chase on Thursday and Bank of America and Citigroup on Friday.
Company Results and Reports
The week’s UK economic indicators begin with Monday’s final GDP for the first quarter. Also of interest will be inflation data for the UK and Eurozone on Tuesday and Wednesday respectively, along with unemployment figures midweek.
Across the Atlantic look out for retail sales numbers on Wednesday, and then inflation data and the latest University of Michigan consumer sentiment survey on Friday.
The above content does not constitute investment advice. Neither Online-Spread-Betting.com nor IG Index accepts any responsibility for any use that may be made of the above.
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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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 Weekly News', Review by D. Jones, last update: 19-Jul-10
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