Not even a strong showing in Asian equity markets was able to keep the FTSE 100 afloat today.
Asian markets rose after record earnings declared by Apple yesterday provided a boost to market sentiment, although the upbeat morale was short-lived in London due to a string of weaker-than-expected European economic data.
The FTSE 100 index reached an intra-day high of 5777.69 earlier today before slumping to a low of 5694.05 by 3pm (London time). Data from the Office for National Statistics indicated that the UK economy is heading for recession, after GDP fell by 0.2% for the last three quarters of 2011.
In the previous quarter, GDP expanded by 0.6%. This leads us to believe that further quantitative easing is on the cards.
ARM holdings, the chipmaker for Apple’s iPads and Macbooks, outperformed today on the back of record earnings by Apple yesterday.
In contrast, HSBC was a major laggard due to the sale of its retail and wealth management division in Thailand. Its search for a buyer for the Japanese retail business is ongoing.
The Davos effect
The sentiment at Davos this year is one of caution as the world political leaders question the model of capitalism.
The most bearish CEOs interviewed were from Asian companies, which goes to show that emerging markets are not immune to the European sovereign debt crisis.
However, Ashmore group, an investment management firm dedicated to emerging spread betting markets, saw its shares buck the negative trend after unveiling strong earnings from its emerging market debt fund earlier today.
Greece continues to drive uncertainty
Germany is backing ECB in its stance to not take losses on its Greek debt holdings, exacerbating pressures on private holders of Greek debt.
This may eventually translate to higher losses for private investors that are exposed to Greece’s government borrowing.
Greek bondholders meet today in Paris to discuss the bond write-downs. If there isn’t a speedy resolution, then further market uncertainty (and volatility) will dominate markets this week.
US open
The Nasdaq outperformed this afternoon following the release of record earnings by Apple.
This led to increased optimism for the technology sector in general. In the contrast, the S&P 500 and Dow Jones were lower mostly due to the dire situation in Europe, as well as a barrage of disappointing earnings from companies operating in the region.
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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Spread Betting News - 20 January 2012
16:00 update:
The Dow Jones managed to eke out yet more gains today, helped on its way by more decent earnings from US companies, although the broader S&P 500 failed to emulate its bigger brother. Nonetheless, US markets remain near five-month highs, and show no sign of stopping yet.
By 4pm (London time), the Dow Jones was up 0.36% at 12.669.28, while the S&P 500 was down 0.35% at 1309.86. In London, profit-taking pushed the FTSE 100 lower, down 0.27% at 5725.39.
FTSE lower, Wall Street edges up again
It was, and remains, a quiet afternoon for financial markets. Traders seem to have opted not to look the gift horse in the mouth, and are closing out some of their positions after a good week for those who remain bullish on financial spread betting markets.
A six-month high for the S&P 500 is a significant watermark, and it will require yet more good economic and corporate data for markets to push much higher from this point.
What is surprising about this week is the way in which markets have crept higher almost unnoticed over the past five days.
In stark contrast to the volatility that characterised the latter half of 2011, this week's gains have been made in a 'Grandmother's footsteps' style, with the gains being made in a quiet fashion, pushing higher in spite of the problems that beset Europe.
Hope springs eternal in respect of a Greek debt deal - each day markets have been sustained by reports that negotiations continue in Athens, after last Friday's dramatic breakdown that spooked markets.
No concrete word has emerged on this deal, but rumours have circulated that an agreement could come as early as this evening.
Greece needs the deal to qualify for the next tranche of bailout cash, without these funds the cradle of Western democracy and civilisation will become the first developed country to default on its debt since the Second World War.
GE keeps the earnings season going in fine form
Earnings season continues apace in the US, after tech stocks reported a broadly upbeat fourth quarter late last night.
Today's major name is General Electric, now known as GE, with the largest US group by market capitalisation reporting a rise in earnings of 3%, mainly due to yet another strong performance at its finance division.
Revenues were up 4% to $38 billion, slightly less than forecast, while the dividend was boosted by a third to 61 cents per share. GE shares fell 1.5% to $18.86.
HMV lives!
If anyone out there has stopped believing in miracles, then I suggest you glance at HMV.
This old dog, which many believed was on its way to the vets for a final treatment, has found a new lease of life, up 200% to 7.2p after it agreed a new deal with bank lenders that will allow it to fight on for now.
PR concerns might have played their part here, with RBS having pulled the plug on clothier Peacocks earlier in the week.
The bank, which is a significant lender to this iconic British music firm (which boasted a long association with British composer Sir Edward Elgar), perhaps decided that it would be best to allow HMV more time to complete its turnaround plan.
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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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 News - 19 January 2012
16:00 update:
Small gains were the order of the day for markets this afternoon, as investors digested the latest US economic data and bank earnings. Caution persisted ahead of tech earnings this evening, with Microsoft and Google reporting after the market closes.
By 3.15pm (London time), the Dow Jones was up 0.1% at 12,589.13, while the S&P 500 had risen 0.25% to 1306.80. In London, the FTSE 100 edged back to 5723.62, a gain of 0.36%.
Markets struggle to establish clear direction
It has been another quiet day for markets, with an early rally for the FTSE 100 weakening as the US markets open, while Wall Street has failed to make much headway so far in the session.
Confidence about a Eurozone deal keeps holding markets up, but optimism was dampened by a weaker-than-expected Philadelphia Fed reading. This came in at 7.3 for January. This was an improvement over December’s 6.8, but was below the expected 10.3.
Surprise fall in US jobless claims
US jobless claims fell to their lowest level since April 2008 last week, according to data from the Bureau of Labor [sic] Services.
Claims were down to 352,000, much better than the expected figure. However, the Labor Department said that the fall was a reflection of the usual January volatility.
Spread betting markets were mostly unmoved by the announcement, with any positive atmosphere dispelled by news that housing starts dropped by 4.1% in December to an annual rate of 657,000.
However, as we’ve seen with the Eurozone bond auctions, market expectations are beginning to rise; expectations for these two metrics of confidence dropped so low that almost any figure was an improvement.
Now that both have got decidedly better, the reaction in stock markets has been less marked – the data needs to keep getting better if this rally is to be sustained.
The point was well-demonstrated by the aforementioned Philly Fed index – the gain was not as big as expected, but then a run of better data tends to push up forecasts, leaving open the possibility of disappointment.
US bank earnings season rolls on
Bank of America and Morgan Stanley both became the latest American banks to report earnings today, painting two rather contrasting pictures.
Fourth-quarter income for Bank of America was $2 billion, with earnings of 15 cents per share, much better than for the equivalent period in 2010.
Loan growth outpaced investment banking, as was the case at its rivals JP Morgan and Goldman Sachs. However, at Morgan Stanley, the investment banking arm was in much better shape, with revenue up to $6.8 billion.
The bank reported a lower than expected loss of$227 million, mostly as a result of one-off items. Morgan Stanley shares rose 4.7% to $18.17, while Bank of America was up 4.34% to $7.09.
ABF and ASOS see improved sales
Associated British Foods rose 1.4% to 1153p, following news that revenue was up 12% for the first four months of its year, aided by strong sales in its sugar and Primark clothing divisions.
Higher commodity prices and higher production lifted sugar trading, but ABF expects that downward pressure on consumer spending in the coming year will limit revenue.
Also in clothing, ASOS, the online retailer, was up 20% to 1798p, as the firm’s international division posted further impressive growth. Even the UK division saw growth rise 10%, double the market expectation of 5%.
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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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 News - 18 January 2012
16:00 update:
Equities spread betting markets bounced higher this afternoon after risk appetite was lifted on reports that the International Monetary Fund would bolster its lending resources significantly to insulate economies from Europe's debt crisis.
By 3.45pm (London time) the FTSE 100 was 0.1% up at 5699.46, while the FTSE 250 jumped 0.56% to 10,651.99. Across the Atlantic, the S&P 500 was 7.40 points higher at 1301.07 while the Dow gained 60.25 points to 12,542.32.
US inflation cools
US producer prices fell in December as companies paid less for gasoline and vegetables, but a measure of underlying inflation climbed higher, sending mixed signals about inflation pressures in the economy.
US data released this afternoon showed that wholesale prices unexpectedly dropped in December, consistent with the Federal Reserve's assessment that inflation remains tame.
The producer price index fell 0.1% while the core measure (excluding food and energy) rose 0.3%, fuelled by a big gain in prices for light motor trucks, which rose 0.9% last month.
Prices in the auto sector have been affected in recent months by floods in Thailand last year that disrupted supply chains. Though inflation appears to be cooling, higher core prices might make the US central bank more cautious about taking additional steps to help the still-struggling US economy.
IMF plans to beef up fund
New reports revealed that the IMF is proposing to raise its lending capacity by $500 billion to insulate the global economy against further deterioration of the Eurozone debt crisis.
The Washington-based lender currently has $385 billion available to lend but wants to lift that to $885 billion after identifying the potential for a $1 trillion global financing gap in the next two years.
IMF Managing Director Christine Lagarde said yesterday the IMF is looking at ways to increase the fund's size, hopefully by contributions from China, Brazil, Russia, India, Japan and oil-exporting nations.
Ms Lagarde's proposal is set to be discussed by G20 deputy finance officials, scheduled to meet this week in Mexico.
However, if one is to learn from past events, last year's November summit in the French resort of Cannes failed to persuade G20 leaders to contribute further as they demanded that Europe do more to fix their crisis before they contribute.
I doubt much will come of this summit though, as nothing has changed much in Europe.
Goldman profit falls 56%
Goldman Sachs, the bank once described as the 'vampire squid', announced this afternoon that fourth-quarter profit fell 56% as trading and investment banking revenue plunged.
The bank however, did manage to beat analysts' expectations, which had dropped considerably in recent weeks.
The bank earned $978 million, down from $2.2 billion a year earlier, while revenue dropped 30% to $6 billion, from $8.6 billion a year earlier despite taking steps to reduce expenses and reporting lower taxes than in the previous financial year.
Operating expenses declined 7% to $4.8 billion, while Goldman's tax provision of $234 million was down 78%.
However, it was these expense reductions which allowed Goldman to report a better profit than expected. Shares in the bank were up 5.16% to $102.72 by late afternoon trade.
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
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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 News - 17 January 2012
16:00 update:
Wall Street pushed higher this afternoon as US traders played catch-up following their day off yesterday. Spread betting markets remain sanguine about the Eurozone crisis, with data from the US and China helping to take their mind off the situation on the continent.
By 3.30pm (London time), the Dow Jones was up 0.95% at 12,541.26, while the S&P 500 had risen 0.8% to 1299.69. In London, the FTSE 100 tracked back slightly and was up 0.5% at 5687.62.
US data combines with China to push up markets
US markets have re-entered the fray this afternoon, after taking a break yesterday for the Martin Luther King holiday.
They have managed to chalk up some decent gains so far, as had been expected by the futures indices, but have been unable to hold on to all their gains.
In London, the FTSE 100 has slipped back from its highs above 5700, and is back treading its well-worn trading range.
A stronger-than-expected Empire manufacturing index helped to strengthen the bullish case, with the index of manufacturing in and around New York rising to 13.48 for January from 8.19 a month earlier.
This was ahead of expectations, and conforms to the recent trend of improving US data. This, combined with the good China data that so enlivened the Asian and European sessions, has allowed Wall Street to push to new highs for the year.
But Eurozone politicians destabilise the rally
Nonetheless, the situation remains worrying.
Comments from Finland and the Netherlands caused indices to slip back, with Helsinki saying that it will not increase the size of its contribution to the EFSF bailout fund, despite the downgrades of many of the members of the fund.
The Dutch finance minister also weighed in with a comment that there would be no more aid for Greece if its debt levels became unsustainable.
However, Greece’s debt has been unsustainable for nigh on three years now. In fact, the un-sustainability of Greece’s debt was the starting point of this whole sorry Eurozone crisis in 2009, and nothing that politicians have said or done has been able to alter that fact.
US banks continue to report latest earnings
Shares in banking giant Citigroup dropped 3.3% to $29.72 after the firm said that profit in the fourth-quarter was down 11% to 38 cents per share, having been expected to increase to 51 cents per share.
The results mirror the disappointing performance reported last week by JP Morgan. Wells Fargo, however, was up 2% to $30.19 after it managed to increase profit for the final three months of 2012 by 20%, to $4.11 billion.
Banks have been hit hard by the Eurozone crisis, which has sapped confidence as a consequence of the failure of governments to craft a meaningful solution.
Stobart hits a bump in the road
Stobart, the trucking firm, fell back 1.2% to 122p as the company announced that it had purchased a number of properties owned by the company’s chief executive and chief operating officer.
Stobart has carried out such a deal before, buying up Carlisle airport from the two to enlarge its own set of properties.
This latest deal was flagged up in April 2011, prompting some to query the transaction, and shareholders will get another chance to dissent at the upcoming meeting to approve the deal.
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 News - 16 January 2012
16:00 update:
European shares recovered from early losses this afternoon in the wake of a mass downgrade of Eurozone sovereign ratings, but trading was light with US markets closed today and the outlook for Greek debt talks uncertain.
By 4pm (London time) the FTSE 100 was up 0.35% at 5656.20 and the FTSE 250 was 0.15% higher at 10,473.32, while markets in the US were closed for Martin Luther King Jr. Day.
Athens en route to Washington
Greece is to send senior officials to Washington today for meetings with the International Monetary Fund as it races against the clock to break a deadlock in debt swap talks that has prompted new fears of a default.
Greece is back at the centre of the Eurozone crisis as fears of a default and a subsequent Eurozone exit overshadow a mass credit downgrade of Eurozone countries.
Athens is in desperate need of a deal with the private sector within days to avoid going bankrupt when €14.5 billion of bond redemptions are due in late March.
However, talks with its creditors broke down without an agreement last week, adding pressure on the country's leaders.
Greek Prime Minister Lucas Papademos tried to reassure Europe over the talks, announcing that he is confident they will continue and that an agreement will be reached in time.
However, a deal with the banks must be sealed before senior inspectors from the EU, IMF and ECB (known as 'troika') arrive in Athens next week to finalise a second €130 billion bailout.
French yields fall after bond auction
French borrowing costs fell at the country's first bill sale after ratings agency Standard & Poor's stripped the nation of its coveted triple-A credit rating, with spread betting investors shrugging off the downgrade.
France sold €1.9 billion of one-year notes at a yield of 0.406%, down from 0.454% last week and a total of €8.59 billion in bills, including three and six-month paper as yields also fell on both.
Standard and Poor's defended its downgrade of France by saying that it reflects their opinion of the impact of deepening political, financial, and monetary problems within the Eurozone, with which France is closely integrated.
The focus is now shifting to Moody's Investors Service and Fitch Ratings. Moody's said today that the French government has less room for manoeuvre on its budget and added that it's still assessing its stable outlook on the country's top-rated debt.
Meanwhile Fitch Ratings said last week that France is the most vulnerable of the top-rated euro area countries.
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 News - 12 January 2012
16:00 update:
Poorer US economic data and some unfortunate comments by the ECB dulled the effect of this morning's positive bond auction by Spain, meaning that markets remained decidedly subdued in the afternoon session.
By 3pm (London time), the Dow Jones was down 5 points at 12,446.53, while the S&P 500 was up 1.4 points at 1293.91, still pushing towards the 1300 level. In London, the FTSE 100 edged lower, down 1.4 points at 5668.06.
US data disappoints
In a first for 2012, the US has failed to bolster the market with good economic data.
The world's largest economy has been doing its 'US cavalry' routine, riding to the rescue of global markets with better news on its economy, helping to take everyone's mind off the general slough of despond that is the Eurozone debt crisis.
However, the figures today took a break from this trend, failing to live up to expectations.
Initial jobless claims jumped to a six-week high last week, to 399,000, up 24,000, when a rise of only around 3000 had been forecast.
This new level is too close for comfort to the 400,000 level that became symbolic of either a strengthening or weakening US employment market.
While 400,000 new claims a week is hardly a signal of boom times, a level below that was a welcome development in the latter quarter of 2011. Spread betting investors are now worried that we might be heading back towards another difficult period for job hunters in the US.
And if US citizens aren't finding new jobs, then they aren't spending money, and not buying new houses. And the rest of us suffer as a result.
Which brings us neatly to today's other piece of poorer US data - retail sales. Sales rose only 0.1% in December, despite the orgy of buying that preceded Christmas.
Excluding cars and fuel, sales were flat from November to December. The US consumer is a vital part of the engine of the global economy, so a drop in spending is usually badly-received by markets.
ECB and BoE unmoved
Both the ECB and the Bank of England chose to keep rates on hold for the month, at 1% and 0.5% respectively.
This was expected, but what was not expected was a comment from ECB head Mario Draghi, who said at the press conference that all the bank's non-standard measures were temporary.
This leaves open the worrying possibility that the bank may eventually pull back from its stealth purchases of government bonds.
We know that the ECB has never really been keen on this role, which it sees as propping up the Eurozone surreptitiously, and we also know that Berlin is staunchly opposed to it.
But bond auctions go well
However, the morning's atmosphere had been lifted by a pair of strong auctions from Spain and Italy.
Italy sold short-term notes ahead of its ten-year auction tomorrow, but the key driver was Spain, which flogged off twice the amount of debt it had been expecting.
The yield fell from 5.187% to 3.384%, and while Madrid had planned to sell €5 billion in five-year notes, it actually flogged €9.98 billion in debt.
The news pushed Italian bond yields down ahead of tomorrow's auction by Rome, with the benchmark ten-year index falling to 6.67%, moving further away from that all-important 7% level.
British Gas & SSE cut prices
One hates to go on when one is right, but I've been told a rally in natural gas is on the way for months now and I still don't see any sign of it.
In fact, prices continue to drop to such an extent that both British Gas and SSE (which was known as Scottish & Southern Energy before the PR types got to it) are going to drop their prices to help the hard-pressed British consumer.
British Gas will reduce its prices by 5% immediately, while SSE will follow on with a cut of 4.5% on 26 March.
Understandably, the shares dropped back slightly on expectations of reduced income, but the fall was limited by a realisation that the move will help the firms to hold on to their customers.
Centrica, which owns British Gas, was down 0.8% at 281.53p, while SSE shed 1.4% to 1246p.
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 News Daily', Article by IG Index, last update: 31-Jan-12
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