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Online Spread Betting
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A brief look at last week and the week ahead, the Weekly Review from IG Index.
Last Week's Trading Highlights
Financial markets once again slumped at the week's outset after the World Bank predicted a deeper global recession than it had previously estimated.
Its revised forecast of a 2.9% decline in the world's GDP was significantly worse than an earlier estimate for a 1.7% contraction.
With investors hopeful of a speedier economic recovery, markets across the globe took a knock on Monday.
The FTSE 100 fell 111.88 points (-2.57%) to 4234.05, while in the US the Dow dropped 200.72 points (-2.35%) to 8339.01.
The FTSE was greatly affected by a widespread fall among miners, although Anglo American bucked the trend, initially rising by almost 10% after receiving – and swiftly rejecting – a merger approach from rival Xstrata.
Sharp UK Recession
Investor sentiment was dented at home by a number of downbeat comments through the week.
On Monday the TUC poured cold water over any talk of optimism in the jobs market, arguing that the unemployment outlook is comparable with the severe recession of the 1980s.
On Wednesday, the OECD downgraded its UK GDP estimate for 2009 to 4.3% from 3.7%, with zero growth predicted next year. Stating that the UK is in suffering a 'sharp' recession, the organisation also highlighted the extent of public sector borrowing debt, which it says will reach a huge 14% of GDP in 2010.
The OECD did upgrade its overall 2010 forecast though, calculating that advanced economies will record 0.7% growth – an improvement on its earlier 0.1% estimate.
Banking and Housing
Some positive news did emerge, after the BoE's Financial Stability Report stated that British banks are now in stronger health than six months ago, though the financial system remains vulnerable to future shocks.
The housing market also showed further tentative signs of recovery, with major banks' mortgage approvals up 15.8% year-on-year to 31,162, while the number of homes sold climbed 7% in May from April according to HMRC.
UK Retailers
Meanwhile, Comet owner Kesa Electricals reported an annual pre-tax loss of £81.8 million on Wednesday, compared to a £118.5 million profit the previous year, while DSG International – owner of Currys and PC World – made a £140.4 million loss after writedowns.
BA
British Airways estimates it will save £10 million after 800 employees agreed to work for nothing for a month, while 4,000 will take unpaid leave.
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The Week Ahead, w/c 29 June 2009
Indicators
Keep an eye out for the ECB's interest-rate decision on Thursday; and, in the US, non-farm payrolls on Friday and challenger job cuts on Wednesday.
UK indicators throughout the week include mortgage lending data on Monday, current account figures on Tuesday, manufacturing PMI on Wednesday, and finish with the services PMI on Friday.
Company Results and Reports
The UK earnings calendar looks comparably lighter this week, but look out for figures from pub retailer and brewer Greene King on Thursday and HMV group on Tuesday.
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.
For previous weeks see below.
'Online Spread Betting', Review by D. Jones, last update: 29 Jun 09
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