Sharp increases after the opening bell were rapidly given up this afternoon on Wall Street as consumer confidence figures provided investors with further reasons to worry about the US economic recovery.
An unexpected drop in consumer confidence prompted Wall Street to surrender early gains this afternoon. The July figures relating to US consumer confidence contrasted sharply with those for Germany seen this morning, showing a figure of 50.4, a five-month low.
Economists had expected a reading of 51, down from June's level of 52.9. The figure suggests that a lack of jobs will hinder the US economic recovery, and that sentiment will continue to remain at a depressed level until the pace of new hiring activity begins to pick up.
However, US home prices struck a more positive note, increasing at a faster-than-expected rate in May. The Case-Shiller index showed that house prices in the biggest US cities had risen by 4.6% in May, the biggest year on year increase since 2006. However, the monthly gain of 1.3% follows on from a small gain in April that begins to indicate that the housing market continues to remain relatively flat.
David Blitzer, the chairman of S&P's index committee said, 'A broader look at home price levels over the past year still does not indicate that the housing market is in any form of sustained recovery.' [1]
At 4pm (London time), the Dow Jones was 5.98 points (0.06%) ahead at 10531.41 and the S+P 500 spreads had edged forward by 1.3 points (0.12%) to 1110.80. The Nasdaq 100 had fallen by 2.83 points (0.15%) to 1887.57.
DuPont , the third-largest US chemicals firm, reported a forecast-beating profit for the second quarter, with earnings of $1.17 per share. Bloomberg survey expectations had been for figures of 94 cents. Sales at the group jumped by 26% to $8.62 billion, helped by a 21% surge in sales volumes. The shares gained 3.57% to $40.38.
Office Depot revealed results which showed a narrower loss than forecast of $18.7 million, helped by lower costs and a return to profit in its North American retail division. The second-largest office supplies firm said that sales dropped by 4.4% to $2.7 billion. JP Morgan said, 'The tone of the release generally highlights sequential improvement in most areas.' Office Depot lost 4.02% to $4.54.
On the back of positive results from UBS and Deutsche Bank, US banks Morgan Stanley, Wells Fargo and Bank of America all advanced between 1.5% and 2% in early trading on Tuesday. The continental banks both exceeded analysts' expectations, with Deutsche in particular saying that it expected to see a strengthening of global economic activity.
However, investment manager Invesco saw second quarter earnings plummet by 46% as a result of costs incurred in its purchase of Morgan Stanley's retail funds business. Invesco's chief financial officer said that investors 'should expect a positive impact from the acquisition going forward'. The shares fell back 1.71% to $19.49.
The US-listed ADRs of BP dropped 2.41% to $37.72 as a changing of the guard took place in the management of the oil firm. British CEO Tony Hayward will be replaced with American Bob Dudley as the firm looks to shore up its battered image in the US. BP hopes that Dudley will be the right man to improve the negative perceptions of BP currently held by both the US government and American citizens. In addition, BP will sell assets worth $30 billion in order to meet the costs of the oil spill, having incurred a $17 billion post-tax loss for the second quarter.
A small bright element of macro-economic data was seen in the release of the Richmond Federal Reserve manufacturing index, which showed a smaller than expected decline in July. The index of manufacturing activity stood at 16, just above economists' expectation of 15, but still down on the figure of 23 seen in June. Respondents to the survey indicated that a faster rate of growth in both raw materials and finished goods was expected in the next six months.
In currencies, the euro continued to decline against the dollar as optimism engendered by the eurozone bank stress tests was overcome by concerns over the pace of the US recovery. UBS noted that the rally in the higher-yielding currencies lacked conviction, with investors chasing risks as a result of rises in stock markets and stronger earnings results. 'Without strong conviction,' the bank said, 'you can see a turn-around on a dime.' [2] By 4.10pm (London time), the euro had moved back to $1.2979. The dollar also pared earlier gains against the yen on falling risk appetite, dropping back to 87.83 yen from a high of 87.92.
Source: [1] Financial Times (27 July 2010), [2] Wall Street Journal (27 July 2010)
IG Index
- Live Prices, Charts, Indices, Equities, Commodities, Forex and more >> read the
IG Index Review.
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.
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.
Spread Betting News - 26 Jul 2010
5.00pm update:
Investors gave a sigh of relief and equity markets charged forward after the US Census Bureau reported a surprise jump in new US home sales last month.
US equity markets started the trading session relatively flat, unsure as to which direction to move following weak leads from European markets. That changed once the US Census Bureau announced a surprise jump in the number of new homes sold in the US last month. According to the report, 330,000 new homes were sold in June, a 23.6% increase on the previous month’s sales which was downwardly revised to 267,000. Economists surveyed by Bloomberg had forecasted a 3.3% increase over the previous month.
While the result provides a much needed boost for the fledgling US housing sector, we should keep in mind that the result comes off an incredibly low base, where new home sales plunged 36.7% in May (upwardly revised from 32.7%) following the expiry of the government’s incentive scheme. Nonetheless, investors will be relieved, as there were concerns that if the number of new home sales had come in weaker-than-expected then it could have derailed the recent rally in equities.
By 4.15pm (London time) the Dow Jones Industrial Average had gained 50.41 points (+0.48%), the S&P 500 Index was 6.83 points higher (+0.62%) at 1109.49, while the Nasdaq 100 edged forward 5.60 points (+0.30%) to 1880.98.
In a push to show that the US is serious about bringing down its massive fiscal debt, US Treasury Secretary Timothy Geithner announced yesterday that the government should allow tax cuts for the highest earning Americans to be lapsed later this year. The tax cuts were implemented during the Bush administration and Mr Geithner is suggesting that the cuts lapse only for the wealthiest Americans who earn over $250,000 a year, while extending the tax cuts for everyone else. Individuals earning over $250,000 only account for 2-3% of Americans – not enough to have a negative effect on growth in Mr Geithner’s view.
Adding to the positive momentum in equities this afternoon was an upbeat outlook from FedEx. The delivery specialist boosted its outlook for the remainder of the year on better-than-anticipated growth in their FedEx Express and FedEx Ground volumes. Earnings for the current quarter are expected to come in at $1.05 to $1.25 a share, up from a previous $0.85 to $1.05. Full-year earnings were revised upward to $5.20 a share, ahead of median forecasts of $4.96, according to analysts surveyed by Bloomberg. FedEx shares jumped 4.74% on the open to $82.70.
Banks were broadly higher this afternoon as the results of the European bank stress tests helped ease concerns over the eurozone debt crisis. Bank of America and Citigroup advanced 1.16% and 1.62% respectively, while JPMorgan edged a modest 0.35%.
Goldman Sachs bucked the trend and was trading lower this afternoon after a Bloomberg report showed that the investment bank may have had a higher exposure to insurance giant AIG than previously realised. If the US government had not bailed out AIG, then Goldman would have had to rely on the credit default swaps it held against AIG to protect its capital, with some of the major sellers of the credit default swaps being Citigroup and Lehman Brothers. Goldman would have had a lot of trouble cashing in the credit default swaps considering Citigroup was the beneficiary of the most bailout funds among all the US banks, and of course Lehman Brothers collapsed. Shares in Goldman Sachs retreated 0.79% to $146.21.
IBM was under the spotlight this afternoon over allegations by the European Union that it violated antitrust laws. The computer services giant is claimed to have abused its dominant position in the market by delaying access to spare parts for which only IBM had access to. IBM has hit back saying ‘Certain IBM competitors which have been unable to win in the marketplace through investments in fundamental innovations now want regulators to create for them a market position that they have not earned.’ [1] IBM shares were down 0.55% to $127.68.
Sterling was broadly stronger against most currencies today and was trading near $1.5465 against the US dollar by 4pm (London time). Sterling is still being bolstered by last Friday’s GDP data which showed an unexpected jump in UK domestic growth of 1.1% in the second quarter. This has added to the recent confidence surrounding UK economic recovery and has seen a FTSE and sterling rally over the last few weeks. The euro has also edged higher against the US dollar as the European bank stress test removes a level of uncertainty over the region. The euro was trading near $1.2940 against the US dollar, up from its open of $1.2900, but struggling to break through the $1.3000 level.
Tomorrow the earnings season continues with DuPont, United States Steel, Office Depot and Lockheed Martin reporting. On the economic front, German retail sales will be published in the morning, while in the US the S&P/Case-Schiller Home Price Indices, Richmond Fed Manufacturing Index and consumer confidence levels for July are scheduled for release.
Source: [1] Bloomberg News (26 July 2010)
IG Index
- Live Prices, Charts, Indices, Equities, Commodities, Forex and more >> read the
IG Index Review.
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.
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.
Spread Betting News - 23 Jul 2010
5.00pm update:
Wall Street had a mixed start today, as anxiety ahead of the European bank stress test results weighed on equity markets.
There has been much speculation over the results of the European bank stress tests that will be released later this afternoon, but we had a small indication of what the tests may include from an article posted by Bloomberg.
According to the article, only the sovereign debt held on the trading books of banks would be included in the test, instead of debt held until maturity. The distinction is important as, for example, a certain bank may hold 90% of its Greek government debt in their banking book - i.e. an account that aims to hold the security until maturity - while the remaining balance of 10% may be held for short-term trading. Therefore an isolated analysis of the trading book does not take into account the bank’s full exposure and may not provide an accurate reflection of the risks confronting the bank, especially if there is a sovereign debt default. Following the announcement, European equity markets pared all of their earlier gains and the euro slumped about 80 points against the US dollar.
The revelation also lead to a choppy start on Wall Street, which opened in the red before settling just above its previous close by mid-afternoon. At 4.00pm (London time) the Dow Jones Industrial Average was up 15.25 points (+0.15%) to 10337.55, the S&P 500 nudged forward 0.41 points (+0.04%) to 1094.08, while the Nasdaq 100 lost 4.33 points (-0.23%) to 1858.77.
Today was another busy day for US earnings, but the results failed to shine and did little to lift equity markets. Firstly, Microsoft posted fourth-quarter earnings after the close yesterday.
The software giant announced record revenues of $16 billion and a 48% increase in net income, which came in at $0.51 a share, topping projections of $0.46 a share. However, concerns that Microsoft is falling behind in tapping into the smartphone and tablet computer business held its shares back. Microsoft retreated 0.81% to $25.63.
Further signs that the auto industry has turned a corner came after Ford Motors reported second-quarter profits that topped analyst expectations. Ford’s net income came in at $2.6 billion, which, if combined with first quarter profits, was the best half-year performance since 1998.
Excluding certain one-off items, earnings came in at $0.68 a share, exceeding the $0.41 average forecast shown in a Bloomberg survey. Ford boosted their earnings by charging extra for options like heated leather seats and voice-controlled devices while reducing the number of discounts on new models. The company said second-half earnings won’t be as high due to higher costs from new product introductions and higher commodity prices. Shares in Ford edged forward 2.52% to $12.40.
Also releasing quarterly earnings was Schlumberger, the world’s largest oil-field services company by market-cap. Second-quarter profits climbed 33% to $818 million, which was in line with analyst expectations, while revenue advanced 7.4% to $5.94 billion on the back of increasing work in North America and Latin America.
The company said it expects a slow but steady demand for its services for the second half of the year, adding that gains in crude oil prices should drive further exploration and production spending from their customers. However, investors should be mindful because BP’s Gulf of Mexico oil spill has left the industry susceptible to additional tightening measures in the oil sector, which threaten to erode Schlumberger’s profits going forward. The results failed to impress investors, with shares in the company slumping 3.39% to $59.22.
McDonald’s and Amazon were among the companies reporting their quarterlies as well today. Earnings at McDonalds came in just above analyst expectations, with the restaurant chain able to capitalise on the heat wave in the northern hemisphere by selling more frozen drinks and smoothies. Shares in the fast-food giant nudged forward 1.82% to $70.10.
Meanwhile, Amazon, the world’s largest online retailer, slumped 6.8% to $111.86 after it warned that operating income for the next quarter will be $210 million, well below the $361.6 million expected by analysts surveyed by Bloomberg.
Investors will be keeping an eye out for the European bank stress test results at 5.00pm (London time). European markets will already be closed at that time, however we could see some large swings on US equities after the details are unveiled. The euro was trading lower against the US dollar this afternoon at $1.2830.
The euro did receive a strong boost this morning following upbeat reports on business confidence in Germany, however, gains were pared as investors took profits ahead of the bank stress test results. Meanwhile, sterling made strong gains against the US dollar and euro after it was announced that UK second-quarter GDP grew by 1.1%, almost double economists’ expectations. Sterling was trading at $1.5420 against the US dollar and €0.8325 against the euro.
IG Index
- Live Prices, Charts, Indices, Equities, Commodities, Forex and more >> read the
IG Index Review.
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.
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.
Spread Betting News - 22 Jul 2010
4.30pm update:
A slew of upbeat earnings and better-than-expected US housing data encouraged investors back to equities today, despite weak signals in the labour market.
The number of US citizens claiming unemployment benefits for the first time jumped to 464,000 in the week ended 17 July - 37,000 more than the prior week! The rise in initial jobless claims exceeded even the most pessimistic forecast shown in a survey compile by Bloomberg. The median expectation was for a rise to 445,000. On a positive note, however, the number of Americans continuing to claim benefits for more than a week declined by more than expected, which helped to negate some of the negative sentiment accompanying the initial claims data.
Adding a positive surprise for equity markets was better-than-expected US home sales. The number of existing US homes that was sold in June declined, but by a lesser amount than anticipated. Home sales fell by 5.1%, which was better than the 9.9% drop that economists surveyed by Bloomberg had projected. Economists were expecting a large drop due to the lapsing of the federal tax credit in April, however the fact that the drop in sales was less-than-expected suggests that the deterioration of the US housing market may not be as severe as initially thought.
By 4:20pm (London time) the Dow Jones Industrial Average added 215.77 points (+2.1%) to 10336.30 while the S&P 500 advanced 25.03 points (+2.3%) to 1094.62 and the Nasdaq 100 surged 48.66 points (+2.7%) to 1865.96.
It was a busy day on the earnings front, with a number of key companies announcing their results today. Manufacturing and construction giant Caterpillar, considered an economic bellwether, surprised analysts with a 91% jump in profits over the year to $707 million, or $1.09 per share, on revenues of $10.41 billion.. According to analysts surveyed by Thomson Reuters, expectations were for earnings of $0.85 on revenues of $9.8 billion. The company also lifted its guidance for the year, saying it is confident about the long-term prospects for the industries it operates in. Caterpillar’s shares rose 1.62% to $67.95.
United Parcel Service, another bellwether for the US economy, also reported bumper profits of $845 million, or $0.84 a share - a 90% improvement from a year earlier! The world’s largest package delivery company unveiled a 13% increase in revenue of $12.2 billion. This beat earnings expectations of $0.77 a share and revenue forecasts of $11.98 billion. Shares in UPS rallied 5.85% to $63.52.
These two companies are important proxies for the US economy, as improved earnings from Caterpillar suggests that the construction and mining industries are still active, while UPS provides an important gauge of spending and business activity across the country.
3M, Qualcomm, AT&T and eBay were among the other companies that reported quarterly results that topped consensus estimates today. Shares of these companies rallied between 2.5% and 7.5%.
Mobile phone maker Nokia was less fortunate today, reporting results that missed analysts’ expectations. Profits plunged 40% to €227 million, which was less than the €285 million forecasted by Bloomberg analysts. The company cut their guidance twice in three months as a result of fierce competition in the smartphone market, especially from Apple and Google. Even though they missed profit expectations, Nokia ADR’s rose 4.08% to $9.18.
Elsewhere, GM announced that it will be acquiring auto-finance company AmeriCredit Corp for $3.5 billion. Prior to today’s announcement, GM was the only major car manufacturer that did not have an in-house lending arm. The acquisition will open the way for GM to boost its sales and reach more customers. More importantly, the acquisition is important for GM as it prepares to go public again, which may happen this year. Shares in AmeriCredit jumped 22.08% to $24.06.
Looking ahead, second-quarter UK GDP figures will be released at 9.30am (London time) tomorrow while the European bank stress test results will be published at 5pm (London time).
IG Index
- Live Prices, Charts, Indices, Equities, Commodities, Forex and more >> read the
IG Index Review.
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.
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.
Spread Betting News - 21 Jul 2010
4.30pm update:
Better-than-expected results at Apple and Morgan Stanley failed to ignite enthusiasm. Instead, investors may have opted to wait on the sidelines to see what the Federal Reserve Chairman Ben Bernanke has to say about the US economic recovery later today.
Wall Street had a slow start to trading despite excellent results from Apple, released after the market closed yesterday. The maker of iPhones posted revenue of $15.7 billion for the second quarter, up 61% from 2009, beating a Thomson Reuters analyst survey that had expected a figure of $14.75 billion. The firm said that sales of the new iPhone 4 and iPad had been one of the main drivers, despite recent negative comment about the latest iPhone.
Morgan Stanley helped to counteract some of the gloom that descended following Goldman Sachs’ dismal results, after unveiling impressive second-quarter figures that defied consensus estimates. The bank reported earnings of 80 cents per share from continuing operations, exceeding Bloomberg forecasts of 47 cents per share. Net revenue of $7.95 billion was 53% above that for 2009, and Morgan Stanley’s trading revenue saw a drop of only 12%, smaller than that of its larger rival Goldman Sachs. Morgan Stanley shares surged 9% to $27.43.
The results failed to fuel a rally on Wall Street this afternoon, however. Instead, investors locked in gains ahead of an important speech by Federal Reserve chairman Ben Bernanke, due later today. Investors will be looking for Bernanke to provide guidance on the US economic recovery in the second-half of the year and to explain what tools still remain available to the Federal Reserve to help it stimulate growth. Fund manager PIMCO’s CEO Mohamed El-Erian said that it is likely that he will ‘refrain from announcing anything notable today and tomorrow. Instead, he will likely try to reassure us on the direction of the economy, remind us of what the Fed has already done, and stress the institution’s vigilance should additional policy measures be needed’. [1]
At 4pm (London time), the Dow Jones was down 3.1 points (-0.03%) at 10,226 and the S&P 500 had edged back 1.28 points (+0.12%) to 1082. The Nasdaq 100 had fallen 5.42 points (-0.29%) to 1835.25.
Among the other companies reporting today in the US, miner Freeport-McMoran C&G reported robust earnings. Revenue at the world’s biggest publicly-traded copper company rose to $3.86 billion, exceeding a Thomson Reuters forecast of $3.53 billion. Second-quarter copper sales were 914 million pounds, higher than the firm’s estimate of 830 million pounds. The company’s stock added 3.78% to reach $66.76 this afternoon.
Iconic brand Coca-Cola also released its figures for the second quarter today. The company said its results were helped by marketing linked to the 2010 football World Cup. Global sales by volume grew by 5% to $8.67 billion and sales in North America increased for the first time since 2007. This contrasts with rival PepsiCo, which saw a drop in sales in the US and Canada for the period. Shares in Coca Cola moved up 1.92% to $54.24.
A decline in mortgage banking revenue hit Wells Fargo’s quarterly results, although the bank still managed to beat expectations. Wells saw net income fall to $3.06 billion, but revenue remained flat at $21.4 billion due to stagnating loan growth.
BP’s US-listed ADRs rose 3.5% to $36.42 as the firm reached a deal with Apache to sell $7 billion of assets to help pay for the Gulf oil spill. The firm sold interests across the world in order to contribute to the $20 billion fund which the US government ordered it to set up to compensate victims of the disaster. Separately, BP strenuously denied rumours that embattled CEO Tony Hayward would be leaving the company before 1 October. The Times in London said that Hayward would step down as part of a new strategy once the Deepwater Horizon disaster had been resolved.
In a quiet day for macroeconomic news, US mortgage applications rose by 7.6% in the week to 16 July, helped by low interest rates of 4.59% for 30-year fixed rate mortgages. Meanwhile, the 4-week moving average mortgage application, a more reliable indicator that smoothes out volatility, rose by 4.9%.
[1], FT Alphaville (21 July 2010)
IG Index
- Live Prices, Charts, Indices, Equities, Commodities, Forex and more >> read the
IG Index Review.
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.
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.
Spread Betting News - 20 Jul 2010
4.30pm update:
Wall Street suffered sharp falls after the opening bell this afternoon, as downbeat earnings announcements and poor housing data raised fears about the strength of the US economic recovery.
Wall Street moved sharply downwards in early trading, as investment banking titan Goldman Sachs reported disappointing second quarter figures. The bank, memorably described as a 'vampire squid', said that the UK bonus tax and a regulatory fine from the Securities & Exchange Commission (SEC) had required it to set aside more than $1 billion from its revenues.
Goldman’s profits slumped 83% to $453 million, and trading revenues in its equity division plummeted 89%.
CEO Lloyd Blankfein said that the 'market environment became more difficult during the second quarter'. Despite the news, Goldman shares nudged forward 0.27% to $146.08. Goldman's earnings come on the back of poorer-than-expected results from IBM and Texas Instruments, both useful indicators on the health of the US economy, as both missed analyst expectations.
Also reporting today was PepsiCo, which saw second quarter profit decline by 3% to $1.6 billion, although overall sales raced ahead 40% to $14.8 billion, beating analyst expectations as growth in emerging markets helped the company's performance.
Healthcare products firm Johnson and Johnson was not as successful, as sales of consumer products dropped by 5.4% to $3.6 billion in the quarter, with six product recalls having a significant impact on the firm’s brand image. Global sales edged up 0.6% to $15.33 billion, far below a Thomson Reuters forecast of $15.64 billion. PepsiCo moved up 1.92% to $63.20, but Johnson & Johnson fell 2.35% to $58.17.
US markets were also buffeted by the release of housing data for June. Housing starts dropped by 5% to 549,000, their lowest level in eight months. A Bloomberg survey had forecast a figure of 577,000, just below May's 578,000. The decline was overwhelmingly concentrated in the multiple-family housing sector, known for its volatility, although this represents less than 20% of housing starts. However, building permits, which act as a useful forward indicator, rose by 2.1%to 586,000.
At 4pm (London time), the Dow Jones was 80.45 (0.79%) lower at 10,074.66, and the broader S&P 500 had retreated 6.12 (0.57%) to 1065.13. The Nasdaq 100 index of leading tech stocks had dropped 18.47 (1.02%) to 1800.77.
Reporting after the market closes today are Apple and Yahoo, with investors keen to examine the former's numbers in the wake of the iPhone 4 problems. Analysts will be looking to determine the success or otherwise of Silicon Valley veteran Carol Bartz in her bid to turn the company around. A Thomson Reuters survey has forecast revenue of $1.16 billion after subtracting advertising commissions.
By 4.10pm (London time), Wall Street had pared most of its earlier gains, as investors decided to take some profits following a disappointing US construction report. The Dow Jones Industrial Average was trading at 10113.41, representing a 0.15% gain over Friday's close, while the broader S&P 500 traded 0.60 points (+0.06%) above its previous close at 1065.48.
In commodities, the cost of shipping gasoline to the US from Europe may be falling, as growing inventories suggest a decreasing need for imports. Fuel stockpiles increased to 221 million barrels in the week to 9 July, and imports dropped 27% in the same period. Imports are expected to decline further, said broker Tradition Energy, as the prime driving season comes to an end. [1]
The Bank of Canada, the first G7 country to raise rates last month, increased them for a second month. The rate was set at 0.75%, but the bank warned that a more hesitant pace of rate increases is to be expected, due to a slower-than-expected economic recovery both at home and abroad.
In Europe, news emerged concerning the bank stress tests, the results of which will be published on 23 July.
Germany’s Hypo Real Estate, which was nationalised during the financial crisis, looks set to fail the tests which include scenarios involving writedowns on sovereign debt.
Hypo is one of the major holders of debt issued by troubled states such as Greece, Portugal and Spain. A failure to pass the tests will mean that the German government will be required to inject more capital into the lender.
Hungarian woes continued, as the embattled government sold less than targeted for the fourth time since June. Budapest was only able to raise 35 billion forint instead of the planned 45 billion forint, and the average yield climbed to 5.47%, the highest rate since 2 March. The president of the Hungarian Central Bank said that a 'sustained increase' in risk premiums may prompt a rate increase.
Source: [1] Bloomberg Website (20 July 2010)
IG Index
- Live Prices, Charts, Indices, Equities, Commodities, Forex and more >> read the
IG Index Review.
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.
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.
Spread Betting News - 19 Jul 2010
4.30pm update:
After taking a battering for much of Friday’s session, there were some signs of stability returning to the US indices at the open today, with the Dow and S&P 500 both kicking off in positive territory following better-than-expected results from US oilfield services giant Halliburton.
The Halliburton shares rallied over 5% this afternoon to reach $28.92 a share, after unveiling an 83% surge in quarterly profits thanks to robust US onshore drilling revenues and an increase in global market share.
The company’s second-quarter net income rose to $480 million, equivalent to 53 cents a share. After excluding discontinued operations, earnings per share came in at 52 cents, exceeding the 37 cent a share estimate shown in a survey compiled by Thomson Reuters. Top line growth was also encouraging, with revenues climbing 15.8% from a year earlier to $4.4 billion, beating expectations of a rise to $4.1 billion.
Halliburton, which did cementing work on BP’s well in the Gulf of Mexico, said it expects its 2010 earnings to be down by 5 to 8 cents per share due to a ban on US deepwater drilling, however. Analysts polled by Reuters expect the company to earn $1.44 per share in 2010, still 13.4% above the prior year’s comparative.
The latest quarterly results seem to quash some of the negative preconceptions about the US quarterly earnings season. We are all eagerly waiting for the results of tech giants IBM and Texas Instruments. These reports are due after the market closes today and likely to set the direction for global equity markets this week.
Analysts surveyed by Thomson Reuters expect earnings at IBM to rise by 11.2% to $2.58 a share and revenues to climb to $24.2 billion, while Texas Instruments is expected to unveil earnings of $0.62 a share on revenues of $3.52 billion due to stronger demand from tablet PC’s. IBM shares were up by nearly 1% to $129.29 a share while Texas Instruments climbed 1.05% to $25.03 a share this afternoon.
By 4.10pm (London time), Wall Street had pared most of its earlier gains, as investors decided to take some profits following a disappointing US construction report. The Dow Jones Industrial Average was trading at 10113.41, representing a 0.15% gain over Friday’s close, while the broader S&P 500 traded 0.60 points (+0.06%) above its previous close at 1065.48.
The National Association of Home Builders/Wells Fargo confidence index dropped to a reading of 14 this month, the lowest level since April 2009, from 17 in June. Readings lower than 50 mean more respondents anticipate a deterioration in construction activity. ‘The housing sector is going to be in a hangover for a few months and it looks like it will be quite a nasty one,’ said David Sloan, a senior economist at 4Cast Ltd. ‘This will weigh on growth in the third quarter and well into the fourth quarter as well.’ [1]
Lennar Corp retreated 1.1% to $13.86, KB Home fell 1.2% to $10.39 and D.R. Horton slid 1.3% to $9.97 after a report from the National Association of Home Builders revealed that US house builders became more pessimistic about the sector in July.
Lingering concerns about the state of the European economy have also weighed on sentiment. Earlier today, Moody’s downgraded Ireland’s credit rating by one notch to Aa2, citing growth worries, but raised its outlook on the country from ‘negative’ to ‘stable’. The agency said that the reason for the downgrade was due to the government’s ‘gradual but significant loss of financial strength’ arising from the cost of bank bailouts. In addition, Hungarian credit default swaps rose today after the EU and International Monetary Fund (IMF) decided to withdraw a €20 billion Hungarian lending facility, saying they require the new Hungarian government to provide further details of how it intends to cut spending.
Source: [1] Bloomberg News (19 July 2010)
IG Index
- Live Prices, Charts, Indices, Equities, Commodities, Forex and more >> read the
IG Index Review.
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.
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.
Spread Betting News - 16 Jul 2010
4.30pm update:
Investor sentiment turned sour this afternoon following a sharp drop in US consumer confidence, despite Bank of America, Citigroup and GE topping analyst expectations.
The US Treasury department reported a larger-than-expected fall in net foreign purchases of long-term securities today. Foreign investors purchased $35.4 billion worth of long-term US assets in May, compared to $81.5 billion the prior month. The measure gives an indication of the amount of funds that are coming into the US from overseas, and therefore reduces the amount of funds the Treasury needs to offset the trade deficit. It also gives an indication of the demand for long-term US financial assets, which clearly weakened in May, and may put pressure on the US dollar.
A drop in US consumer prices also weighed on investors this afternoon. Consumer prices fell 0.1% in June, dragged down by lower energy prices. Exerting upward pressure on prices however, were apparel, medical supplies and cigarettes. If you exclude food and energy, otherwise known as core consumer prices, then prices actually rose 0.2% over the last month. The data reaffirms the view that the Fed is likely to keep interest rates on hold for a lengthy period, but a positive to take away from today’s figures is that concerns over deflation may take a back seat with core consumer prices rising.
However it was a sharp decline in consumer confidence, as measured by the Reuters/Michigan Consumer Sentiment Index, which sent equities plunging upon announcement. Consumer sentiment fell to a reading of 66.5 in July from 76 the prior month. This was the lowest reading for this survey since August 2009 and was lower than even the most pessimistic forecast given by economists surveyed by Bloomberg. The drop in US consumer confidence does not bode well for the US economic recovery, which is already struggling to boost consumer spending amidst high unemployment.
By 4pm (London time) the Dow Jones Industrial Average had fallen 150.76 points (-1.48%) to 10208.55, the S&P 500 was 17.17 points (-1.59%) lower at 1079.31, while the NASDAQ 100 retreated 27.60 points (-1.51%) to 1828.64.
Bank of America and Citigroup both announced their second-quarter earnings today, and while both banks beat analyst expectations, their share price took a heavy hit in early trading. Bank of America’s second-quarter earnings came in at $3.12 billion, or 28 cents a share, down from 33 cents a share a year earlier. The median estimate from analysts surveyed by Bloomberg had estimated earnings per share of 23 cents. Despite earnings beating expectations, the lacklustre performance across almost all its business lines weighed on investor confidence towards the bank and called into question the health of the US financial sector. Bank of America shares slumped 7.41% to $14.25.
It was a similar story for Citigroup , which reported second-quarter earnings of $2.73 billion, equivalent to nine cents a share, which was ahead of expectations of five cents a share. Lower revenues were partly mitigated by improving credit conditions, with the company planning to sell a number of unnecessary assets to better reposition itself. Shares in Citigroup slid 4.21% to $3.98.
A positive from all the banks that have reported is that they have reduced their provisions for loan losses, suggesting that the worst of credit losses and bad loans have now passed.
Bucking the negative trend in the banking sector was Goldman Sachs, which rose 2.89% today to $149.41. It was reported just after the market close yesterday that the investment bank had reached a settlement with US regulators over allegations of misleading investors in relation to Collateralised Debt Obligations (CDO’s). Goldman Sachs has agreed to pay $550 million to end the three-month ordeal that has been undermining the bank’s reputation.
Lastly, GE was also able to beat analyst forecasts, with strong performance from its financial services unit helping it to exceed expectations despite slipping on revenue expectations. Second quarter income was up 19% at $3.2 billion, with analysts noting that the company had improved faster than anticipated. However, the selling pressure was too much today, with GE shares falling 3.08% to $14.78.
The earnings season continues next week with IBM reporting on Monday, while Apple and Goldman Sachs unveil their results on Tuesday.
IG Index
- Live Prices, Charts, Indices, Equities, Commodities, Forex and more >> read the
IG Index Review.
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.
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.
Spread Betting News - 15 Jul 2010
4.30pm update:
A successful Spanish bond auction and stellar results from JP Morgan couldn't lift Wall Street out of the red this afternoon, after a swathe of weak economic data took its toll on investors.
European equities were buoyed this morning after the Spanish government successfully sold €3 billion worth of 15-year bonds. There was strong interest from investors, who were willing to purchase 2.57 times more than what was on offer. This gave a lift to European equities and saw the Euro jump to over $1.28 against the US Dollar.
Another boost to equities came after JP Morgan Chase unveiled their second-quarter results. The Wall Street bank was able to top analyst forecasts with an impressive 76% rise in profits. Net income rose to $4.8 billion, or $1.09 a share, which was way ahead of expectations of $0.71 according to Bloomberg.
However a swathe of US economic data released this afternoon outweighed the positive developments from this morning. There were some positive aspects, including a decline in the number of US citizens claiming first time unemployment benefits. Initial jobless claims fell from an upwardly revised 458,000 in May to 429,000 in June, the lowest level since August 2008.
This was better than the 445,000 median estimate from economists surveyed by Bloomberg. However, the larger-than-expected drop in initial jobless claims was overshadowed by an increase in the number of continuing jobless claims, which rose to 4,681,000 in June from an upwardly revised 4,434,000 the prior month.
Another positive bright spot from today's economic data was a slight increase in industrial production, which rose 0.1% in June. According to Bloomberg, the median estimate from economists was for a decline of 0.1%.
Once again, however, the positive sentiment was muted with the New York Empire State Manufacturing Index falling sharply to a reading of 5.1 when expectations were for the index to fall to a reading of 18.
The New York Empire State Index measures manufacturing activity in New York, northern New Jersey and southern Connecticut with a reading above zero signalling expansion.
Also released this afternoon were US producer prices, which fell 0.5% in June. The result is in line with yesterday's drop in import prices and suggests that inflation is well and truly not an issue for the US at the moment; however deflation may be a concern.
'We're going to flirt with deflation, but we don’t think it’s going to be a lasting period of deflation,' said Russell Price of Ameriprise Financial Inc. [1]
US CPI figures will be released tomorrow which will give the most accurate gauge of the level of inflation in the US.
The last piece of data to be released this afternoon came at 3pm (London time) when the Philadelphia Fed Manufacturing Survey was released.
The survey showed manufacturing in the Philadelphia region slowing to a reading of 5, when expectations were for the reading to increase to 10. This added the final nail to the coffin and sent the Dow Jones tumbling 100 points following the announcement.
By 3:30pm (London time) the Dow Jones Industrial Average had lost 103.38 points (-1.01%) to 10263.34, the broader S&P 500 index fell 11.55 points (-1.07%) to 1083.62 while the NASDAQ 100 declined 17.78 points (-0.97%) to 1835.63.
Despite the strong results, JP Morgan was not immune from this afternoon's sell-off. After opening positively, shares in the investment bank retreated 1.71% to $39.66. Industry peers Bank of America and Citigroup were among the heaviest fallers on the Dow Jones, losing 2.94% and 2.49% respectively. Both of these banks are due to report their second-quarter earnings tomorrow.
Shares in Google and Advanced Micro Devices fell between 2.7% and 3.2% this afternoon, ahead of their earnings announcements later today.
Elsewhere, nutritional supplier NBTY outperformed this afternoon, skyrocketing 43.71% to $53.85. The company announced that it had agreed to be bought by private equity firm Carlyle Group for $3.8 billion, which would make it one of the largest private equity deals so far this year. The offer of $55 per share represents a 47% premium to NBTY’s closing price on Wednesday.
[1] Bloomberg news (15 July, 2010)
IG Index
- Live Prices, Charts, Indices, Equities, Commodities, Forex and more >> read the
IG Index Review.
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.
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.
Spread Betting News - 14 Jul 2010
4.30pm update:
Weaker-than-expected retail sales dragged Wall Street lower this afternoon, giving investors an opportunity to lock in recent gains as the market pauses for breath from this week's earning schedule.
The US Census Bureau announced today that retail sales fell by 0.5% in June, an improvement from the upwardly revised 1.1% decline the previous month, but slightly more than the 0.3% median estimate decline from Bloomberg. Retail sales (excluding autos) fell by a more modest 0.1%, while retail sales (excluding autos and gas) actually rose by 0.1%. Auto and gas sales fell by 2.3% and 2% respectively in June, which dragged overall sales lower. Non-store retailers, which includes online and direct-mail purchases, continued to improve in June, rising 1%.
The data suggests the US recovery is cooling, with consumers still hesitant to make purchases when faced with uncertain employment conditions.
In a separate report, US import prices declined by more than expected in June. With prices subdued, this gives the Fed less incentive to lift interest rates anytime soon, and we could see the ultra-low interest rate policy held for even longer. The strength of the US dollar has been hurting the US economy at the moment, as evidenced by the widening of the trade deficit reported yesterday, and now the decline in import prices today. Recently, the US dollar has generally been benefitting during times of uncertainty, however if risk sentiment continues to improve as it has done in the past week then we could start seeing the US dollar depreciate against most currencies.
By 4pm (London time) the Dow Jones was trading 7.26 points (0.07%) above its previous close at 10370.28, the
SPX 500 was 0.9 points lower (-0.08%) at 1094.44 and the tech-heavy
NASDAQ rose 7.14 points (0.39) to 1852.17.
Last night Intel recorded their best quarter ever, topping analysts' expectations. Intel's revenue increased 34% from the previous year to $10.8 billion, while net income was $2.89 billion, a significant improvement from the $398 million loss a year earlier. Gross profit margin also improved to 67%, ahead of expectations of 64%, which puts to rest concerns that their profit margins were getting squeezed. They also issued a rosy outlook, with third-quarter sales expected to rise to $11.6 billion, which is better than the $10.9 billion average estimated by analysts surveyed by Bloomberg. Intel shares rose 3.52% to $21.75.
Technology stocks were buoyed by Intel's results, with the tech-heavy NASDAQ 100 trading above its previous close, while the Dow Jones and S&P 500 struggled to stay out of the red. Along with Intel, the strongest gainers on the Dow Jones were Cisco, Hewlett-Packard and Microsoft, which rose between 1.3% and 2.8%. PC producer Dell also benefitted, rising 3.71%.
Printer manufacturer LexMark fell heavily in early trading as Morgan Stanley downgraded the company from 'equal-weight' to 'underweight' due to increased competition from rival Hewlett-Packard and reduced growth prospects as a result of industry restocking. The weak retail sales data weighed on Radioshack this afternoon, which also declined following rumours that its asking price in respect to yesterday's takeover rumours was too high. Lexmark dropped by 6.74% and RadioShack lost 5.49%.
Banks were broadly lower this afternoon, as concerns over the European bank stress tests lingers and the passing of the US financial reform bill nears completion. JP Morgan will be the first major bank to report their earnings this season when they unveil their results at 11.30am (London time).
IG Index
- Live Prices, Charts, Indices, Equities, Commodities, Forex and more >> read the
IG Index Review.
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.
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.
Spread Betting News - 13 Jul 2010
4.30pm update:
Wall Street powered ahead in early trading following positive leads from Europe and an optimistic start to the US earnings season.
The situation in Europe continues to settle, with today marking the first time Greece has tapped into the bond market since it had to formally request bail-out funds.
The Greek government was able to sell €1.625 billion in six-month bills at a yield of 4.65%, 10 basis points more than a similar auction in April.
The Greek government opted for shorter term six-month bills rather than 12-month bills as they believed the yield demanded on the longer-term option would have been significantly higher due to the risk for investors holding the bonds for a longer period. However, demand for the bills was still strong with a bid-to-cover ratio of 3.64 times.
Giving further boost to the European region were reports from the FT last night that China had put forward a bid for €1 billion of Spanish 10-year bonds at the auction held last Tuesday.
The fact that Asian investors were returning to the bond market in Europe was taken by many as a vote of confidence for the region. Equities across the Eurozone rallied this afternoon, with most major European indices rising around 1.7%.
The Euro struggled against the US Dollar for most of the day, with Portugal’s sovereign debt rating downgrade from Moody’s Investors Service this morning weighing on the continental currency.
However, a surprise widening of the US trade balance for May saw the US Dollar drop against most currencies, which sent the Euro soaring to $1.2635. The US trade balance widened to $42.2 billion in May while expectations were for the deficit to narrow to $39 billion.
In some respects, the result should not come as too much of a surprise as the relatively stronger US Dollar in May would have supported imports, while reducing export demand from trade partners such as Europe and the UK.
It also suggests the US economy is still spending, albeit in overseas markets, to take advantage of the stronger Dollar. Despite the trade balance widening, US exports actually grew by 2.4%, the highest level of exports since September 2008, a good sign that demand for US goods are still growing.
By 3.45pm (London time) the Dow Jones Industrial Average rose 124.19 points (+1.20%) to 10340.46, the S&P 500 advanced 11.62 points (+1.07%) while the NASDAQ 100 gained 5.88 points (+0.32%) to 1826.91.
The US earnings season kicked off to a positive start last night, when Alcoa reported second quarter profits that topped analyst expectations. The aluminium producer unveiled earnings of $0.13 per share, ahead of the median estimate of $0.11 forecasted by analysts surveyed by Bloomberg.
Even more appeasing for investors was the company raising its aluminium consumption forecast from 10% to 12% due to improved end-market demand. Alcoa is viewed by some investors as a useful indicator for the health of the US economy overall, since it supplies products to a wide variety of industries. Shares in Alcoa rose 2.3% to $11.12.
'It's a very positive signal for economic growth and the stock market generally,' said John Stephenson of First Asset Investment Management. 'Maybe end-use demand has not been destroyed. That's a very good sign and a great way to start off this Q2 earnings season.' [1]
Intel is the next major Wall Street constituent to report earnings, which will happen after today’s closing bell.
The semiconductor chip maker is expected to show sales rebounding sharply compared to a year ago, but faces considerable headwinds with companies being slow to update old PCs and schools and governments unlikely to make new purchases in the face of budget cuts.
However, what analysts will be paying close attention to is Intel’s gross profit margin, which is expected to be 64% according to the Wall Street Journal. A greater margin than this could provide a positive boost for the stock.
Banks were broadly higher this afternoon, encouraged by the successful Greek debt auction and reports that implementation of the new Basel III requirements will be eased in slowly for banks and compromise given on capital requirements. JPMorgan advanced 2.63%, Morgan Stanley climbed 2.16% Citigroup rose 2.07%, while Bank of America was 1.68% stronger.
We'll get an idea of how the US banking sector is faring when JP Morgan announces results on Thursday morning.
Insurance giant AIG gained over 5% today, ahead of a major board meeting later this week. The meeting will discuss the future of its Asian subsidiary, AIA, which has only recently exited talks with the UK insurer Prudential.
The most likely outcome for AIA is expected to be a public float according to Reuters, since another acquisition offer would lead to further execution risks and funding issues for any potential buyer.
There were only a handful of companies trading lower on the S&P 500 Index today, but among them was Apple, which dropped 3.2% to $249. For a company that is usually in the headlines for all the right reasons, it seems their latest gadget, the iPhone 4, is marring the company’s reputation.
The smartphone received early complaints from customers about problems with the phone’s reception, which have now been deemed to be a hardware problem. As a result, consumer reports have decided not to recommend the phone.
Tomorrow, UK salary earnings and the unemployment rate will be announced, while in Europe, industrial production and consumer price figures will be released. Later in the afternoon, US import prices and retail sales for June are scheduled, along with the latest Federal Open Market Committee minutes.
Source: [1] Bloomberg news (13 July, 2010)
IG Index
- Live Prices, Charts, Indices, Equities, Commodities, Forex and more >> read the
IG Index Review.
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.
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.
Spread Betting News - 12 Jul 2010
4.30pm update:
Wall Street fluctuated between gains and losses as investors await the commencement of earnings season, which begins with Alcoa reporting after today's market close.
Over the last week, expectations of a strong earnings season have been building up as investors hope to dispel thoughts of a stalling global recovery. According to the Royal Bank of Scotland there may be good reason for high hopes:
'Over the past 10 years there have been seven quarterly reporting seasons where more than 70 per cent of S&P 500 constituents have beaten consensus forecasts, and in six the market responded favourably, posting an average gain of 6.3 percent over a three-month period. We believe that with the macro risks already aggressively discounted, we should see markets better reflecting corporate news flow.' [1]
The official earnings season begins when Alcoa reports its second quarter profits tonight after the US market closes. It is expected that the aluminium giant will report earnings of $0.12 per share after posting losses of $0.26 per share one year ago.
By 4pm (London time) the Dow Jones Industrial Average was 21.42 points (-0.21%) below its previous close at 10176.61. The broader S&P 500 Index had lost 3.69 points (0.34%) to 1074.27, while the NASDAQ 100 bucked the negative trend and rose 1.19 points (+0.07%) higher to 1815.98.
Lifting Wall Street this afternoon were tech stocks which posted across the board gains. On the Dow Jones, Microsoft, Intel, Hewlett-Packard and Cisco Systems were among the best performers rising between 0.75% and 1.5%. The heavily technology weighted NASDAQ 100 outperformed as an index, holding above its previous close all afternoon while the Dow Jones and S&P 500 slipped into the red. SanDisk, Qualcomm and Symantec rose 5.41%, 3.51% and 2.71% respectively. Intel and Google will be announcing results this week and today's rise in tech-stocks suggests analysts are expecting a strong performance across the sector.
Insurance broker Aon this afternoon announced that it will be buying out Hewitt Associates for $4.9 billion. Aon will be taking over Hewitt to expand its foothold in human resources and outsourcing operations. The deal values Hewitt at $50 a share and shareholders will be able to elect to receive either all cash or all stock following the acquisition. The benefits from the acquisition for Aon are expecting to start coming through in 2012, with part of the savings coming from reduced duplication in back-office operations. Shares in Hewitt jumped 32.77% to $47 on the announcement, while Aon stocks tumbled 7% to $35.66.
Reports in the London Times suggested that oil giant Exxon had received clearance from the White House to make a bid for beleaguered BP, but both companies refused to comment. Separately, there were also reports that BP was in talks with Apache to sell around $12 billion in assets in order to raise further funds to both fight the Gulf spill and defend itself against merger interest. BP American Depositary Receipts (ADRs) jumped 6.14% on the New York Stock Exchange and surged 9.87% on the London Stock Exchange this afternoon.
Playboy Enterprises owner Hugh Hefner also unveiled his plans today to take the firm private. Hefner, whose offer values the firm at $185 million, said that he was concerned about the brand and the editorial direction of the namesake magazine. Heffner plans to offer $5.50 per share, which saw the share price jump to $5.26 this afternoon, or 33.50% higher than its previous close.
Worries over the health of Europe's banks continued this afternoon, with a report emerging from Germany's Der Spiegel magazine that indicated some of the worst-case scenarios being tested. The magazine said that one variant included a 2.3% haircut on German bonds, with much greater losses included for more heavily-indebted states such as Greece, where a 20% loss in value was being factored in.
Investors will be waiting for further details on the bank stress tests to be announced following this afternoon's meeting among EU officials in Brussels. There may be further apprehension derived from tomorrow's auction of Greek bonds, the first such operation to be attempted since the May bailout by the EU and the IMF. If the auction is not as successful as anticipated, it will be a signal that investors are still questioning the solvency of various European governments.
Elsewhere, data released from China over the weekend showed stronger-than-expected exports in June of 43.9%, despite easing from 48.5% in May. Imports also slowed to 34.1% in June, hit by lower demand for copper and iron ore. This will be a cause for concern, given that China is expected to be one of the major engines that powers the global economy while Europe and America deal with slower growth.
The Chinese property market also began to cool in June, with the average house price in 70 main cities falling by 0.1%, which is the kind of gentle slowing in the market that the Chinese government had been hoping to implement. Beijing had introduced a series of measures to make it more difficult to gain a mortgage for a second home, in a bid to head off increasing social tensions in urban areas. The curbing of property prices comes soon after former IMF chief economist Kenneth Rogoff warned of an impending 'collapse' in the Chinese property market that could imperil the country's banks.
Source: [1] Financial Times, 12 July 2010
IG Index
- Live Prices, Charts, Indices, Equities, Commodities, Forex and more >> read the
IG Index Review.
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.
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.
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.
'Spread Betting News Daily', Article by IG Index, last update: 28-Jul-10
Related articles:
Spread Betting Daily, 29-Jul-10,
The afternoon spread betting update from IG Index - a look at the markets as the UK closes and the US continues to...read Article
Spread Betting News Daily, 28-Jul-10,
The late review of the markets as the London Stock Exchange closes and the US markets remain open for...read Article
Spread Betting News 8 Jul 2010, 8-Jul-10,
Spread Betting News 8 Jul 2010: Some fuel categories were weaker so the overall picture (as things stand) is certainly not strong enough to warrant crude oil...read Article
Spread Betting News 6 Jul 2010, 6-Jul-10,
Spread Betting News 6 Jul 2010: A lift in commodity prices saw strong gains across resources stocks on the S&P 500. Peabody Energy, United States Steel and...read Article
Spread Betting News 5 Jul 2010, 5-Jul-10,
Spread Betting News 5 Jul 2010: The FTSE 100 was 0.34 points lower (-0.01%) at 4837.75, while the FTSE 250 had gained 33.67 points (0.36%) to 9310.06. The economic news...read Article
Spread Betting News 2 Jul 2010, 2-Jul-10,
Spread Betting News 2 Jul 2010: By 3:30pm (London time) the Dow Jones was 19.03 points (-0.20%) lower at 9713.50, the S&P 500 fell 0.08 points...read Article
Spread Betting News 1 Jul 2010, 1-Jul-10,
Spread Betting News 1 Jul 2010: The SPX 500 had lost 16.77 points (-1.65%) to 1013.94 while the NASDAQ 100 shed 34.66 points (-2.03%) to 1704.48....read Article
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.
