A brief look at last week and the week ahead, the Weekly Review from IG Index.
Weekly Trading Report 06 June 2011 - Last Week's Trading Highlights
Following holidays in both the US and the UK on Monday, the week began optimistically with news that Greece was prepared to accept more budget cuts in return for the next tranche of the IMF and EU bailout.
The positive sentiment was short-lived, however, as ratings agency Moody’s downgraded Greece’s credit rating by three notches on Thursday. The chance of a Greek default in the next three years is now cited at 50%.
The FTSE and Dow closed at 5848 and 12,249 respectively on Thursday, well off Tuesday’s highs of 6010 and 12,574.
The bearish mood on the indices spread betting markets was compounded by weak economic data on both sides of the Atlantic. In America, Wednesday’s ADP figures showed that just 38,000 jobs were added in May, compared to expected growth of 175,000.
Friday’s Non Farm Payrolls were even more disappointing, coming in at only 54,000. This is down from 224,000 last month, and well below analysts’ expectations of around 150,000.
In terms of US manufacturing, the ISM index was down from 60.4 to 53.5 on Wednesday, while in the UK May manufacturing PMI fell from 54.4 to 52.1. May services PMI retreated as well, to 53.8 from 54.3, but construction PMI rose from 53.3 to 54.
Despite market pressure on the FTSE, domestic companies released generally upbeat earnings reports.
On Thursday, B&Q owner Kingfisher announced a 3.3% year-on-year rise in first-quarter sales, with figures boosted by the warmer weather. Also on Thursday, annual revenue growth at fashion retailer ASOS hit 52%, up to £339.7 million, with international sales rising by 142%.
Wolseley too posted a healthy 30% increase in Q1 trading profits compared to a year earlier, backing up the modest growth in the UK construction sector this month. Model maker Hornby ended the week on a low note, however, reporting a 21% decline in annual profits to £4.1 million.
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Weekly Trading Report 06 June 2011 - The Week Ahead
Indicators
In a fairly quiet week, the ONS reveals preliminary first-quarter UK GDP on Wednesday. This may prove a gloomy affair given recent slashes to growth forecasts from the CBI and BoE, with analysts predicting it to have stagnated at 0.5%.
Attention then switches across the pond, where final first-quarter US GDP and initial jobless claims are unveiled on Thursday.
Company Results and Reports
In a fairly quiet week for both economic data and corporate reporting, most attention at home will be focused on Thursday’s interest-rate announcement by the Bank of England, the first without staunch hawk Andrew Sentance, who left the MPC last month.
Trade balance figures are also released on Thursday, before manufacturing and industrial production data closes out the week.
In the US, analysts will be eying Wednesday’s Beige Book for the latest summary of economic conditions across the country, while in the Eurozone preliminary Q1 GDP data will be closely watched.
Among sparse corporate reports, Thursday’s full-year data from Halfords Group and Q4 numbers from Brown Forman Corp are the UK and US standouts.
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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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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.
'Online Spread Betting', Review by D. Jones, last update: 6-Jun-11
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