A brief look at last week and the week ahead, the Weekly Review from IG Index.
Weekly Trading Report 30 August 2010 - Last Week's Trading Highlights
Last week saw the FTSE 100 fall to a seven-week low at Wednesday’s close, as weak US data hit Wall Street hard and sent tremors through an increasingly brittle global recovery.
A meagre 0.3% increase in durable goods sales on Wednesday deftly countered Monday’s positive news from the July Chicago Fed activity index, while on Tuesday US existing homes sales dropped to a ten-year low.
Wednesday’s US new homes sales data was a further catalyst, as annualised sales for July sank 12.4% to 276,000. The Dow Jones fell to 9986 points at Thursday’s close, back below the critical 10,000 psychological barrier.
The UK housing market showed a little more spark, but still seemed to be suffering as Tuesday’s BBA mortgage approvals fell for a second month. Homebuilder Persimmon reported a tenfold increase in pre-tax profit of £101.4 million for the first half of the year on Tuesday, however, while on Monday peer Bovis Homes announced a £3.5 million pre-tax profit over the same period.
In a further fillip, UK GDP for the second quarter was increased by 0.1% to 1.2%, beating estimates. Friday afternoon’s Q2 GDP data across the Atlantic was also well received after surpassing expectations, despite being revised down from 2.4% to 1.6%.
In corporate news, it was a busy week for M&A activity. Fertiliser company Potash Corp urged shareholders to reject BHP Billiton’s hostile bid on Monday, while technology sector rivals HP and Dell held a bidding war for data storage company 3Par. This a battle which Hewlett Packard looked like winning with a $1.8 billion offer, which investors speculated Dell may not match.
It was also a big week for miners, with rising commodities prices prompting positive full-year data from BHP on Wednesday alongside upbeat six-month reports from Antofagasta and Kazakhmys.
On Thursday the world’s largest drinks maker, Diageo, reported pre-tax profit growth of 12% year-on-year.
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Weekly Trading Report 30 August 2010 - The Week Ahead
Indicators
The Federal Reserve’s latest minutes on Tuesday will be the focus of attention following the bank holiday weekend at home, while on Thursday the ECB are expected to maintain Eurozone interest rates at 1% for a 16th month.
US unemployment data is also prominent with the Challenger job-cut report midweek followed by the key Non-Farm payrolls on Friday.
Other significant figures to look out for include Eurozone unemployment and housing market data in the UK and US on Tuesday and Thursday respectively.
Company Results and Reports
In a quiet week for companies keep a look out for annual results from UK public transport provider Go-Ahead Group on Thursday.
Across the pond food products giant HJ Heinz unveils quarterly numbers on Wednesday.
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For previous weeks see below.
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'Online Spread Betting', Review by D. Jones, last update: 30-Aug-10
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