The general atmosphere of jubilation has spread across the Atlantic, as US markets surge on the back of positive US data and the upbeat news from Brussels.
Banking stocks led the march higher, as spread betting investors returned to risky assets with a vengeance.
Although unable to hold on to all their gains, US markets are solidly higher. By 3.45pm (London time), the Dow Jones was up 1.87% at 12,090.41, while the S&P 500 gained 2.07% to 1267.71. In London, the FTSE consolidated its gains, and was up 2.6% at 5696.62.
US data adds further cheer
As well as news of the Eurozone deal, markets have been buoyed by acceleration in the pace of US GDP growth. The preliminary estimate for growth in the American economy for the July-September period was 2.5%, in line with expectations, faster than the 1.3% seen in the second quarter, and the biggest quarter-on-quarter jump since the final quarter of 2009.
Consumers, businesses and the Federal government all increased their spending, contradicting consumer confidence surveys that showed optimism at recession levels. As a proportion of annualised GDP, personal consumption expenditure (PCE) jumped from 0.5% to 1.72%.
Since consumer spending accounts for 70% of the US economy, this jump is particularly welcome.
On the jobless front, there was a small drop in initial jobless claims, which fell 2000 to 402,000 last week, still persistently above the 400,000 mark.
Combined with the Eurozone deal, US data was sufficient to push the S&P 500 back into positive territory for 2011, joining its cousins the Dow Jones and the Nasdaq. It was only a few weeks ago that the S&P 500 dipped into bear market territory (defined as being down 20% from its highs).
The recovery in US indices clearly shows how pernicious an effect the Eurozone crisis has had on markets. The relief among traders is almost palpable, and even though major questions remain about the Eurozone, the sight of EU leaders pulling an all-nighter to rescue their currency has provided a much-needed tonic for the frayed nerves of investors.
Banks have led markets higher on both sides of the Atlantic. In New York, Goldman Sachs, Citigroup and Bank of America rose 6%, while Morgan Stanley, which faced concerns about the size of its Eurozone exposure, surged almost 10%.
In London, Barclays was up almost 19%, before settling back slightly with a 14.3% gain to 204.5p. Lloyds rose 6%, RBS jumped 9%, HSBC advanced 5.3% and Standard Chartered added 7.7%.
Higher oil prices help Exxon
US oil giant Exxon was able to report a rise in earnings for the third quarter despite also revealing a drop in production for the same period. It was able to achieve this, not through any fancy accounting, but thanks to high oil prices.
Output was down 4%, a trend echoed by BP and ConocoPhillips, but earnings were up 41% at $2.13 per share. This was precisely in line with expectations, and the shares rose 0.76% to $81.69.
Less activity at William Hill
Operating profit at bookie William Hill dropped by 22% in the three months to September, when compared with 2010, although the firm said this was due to 2010 being a World Cup year.
Online performance was better, with revenues 28% higher, and the company remains in discussions about a takeover of smaller rival Probability. Curiously (or perhaps not), there was no mention in its update of a mass walkout by staff in its Tel Aviv call centre. William Hill still expects to hit forecasts for the full year. The shares were down 0.58% at 224p.
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.
IG Index
- Live Prices, Charts, Indices, Equities, Commodities, Forex and more >> read the
IG Index Review.
The above content does not constitute investment advice, it is provided purely for information purposes and is delivered as a personal view of the writer. Neither the contributing company (or writer) nor Online-Spread-Betting.com accepts any responsibility for any use that may be made of the content.
'Spread Betting Investors Jubilant as EU Leaders Agree on Crisis Plan', Article by IG Index, last update: 27-Oct-11
Content approved / provided by IG Index which is Authorised and regulated by the Financial Services Authority, FSA Register number 114059.
Related articles:
Spread Betting Daily, 18-Apr-12,
The daily afternoon spread betting update featuring the key stock market indices, forex, shares and commodities markets. Daily updates focus on the spread betting markets as the UK closes and the US continues to...see: Spread Betting Daily
Spread Betting News Daily, 17-Apr-12,
The afternoon spread betting update from IG Index - a look at the spread betting markets with the UK closing and the US markets just...see: Spread Betting News Daily
Looking to improve your trading results? Get free trading tips and trading analysis as well as the latest trading offers »
Trading News.
Risk Warning:
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.
Disclaimer:
Online-Spread-Betting.com does not endorse the information and
analysis available on this site. It is provided purely for information
purposes and is delivered as a personal view of the writer. Under no circumstances
is the information hereon to be used or considered as, an offer to sell, or a
solicitation of any offer to buy. The website content does not constitute investment
advice and neither the individual contributor nor Online-Spread-Betting.com accepts any
responsibility for any use that may be made of the content.
* Tax Free Trading:
Tax law is subject to change. It may also differ if you pay tax in a jurisdiction outside the UK.
