Posts from — July 2009

Financial Market Comments from David Jones, Chief Market Strategist, IG Index.

The FTSE is still looking for a clear direction this morning; after topping the highest closing point of the year in early morning trading, it was all but flat at 10am in London.

BA is leading the market so far after softening the blow of a £94 million interim operating loss with a 6.6% reduction in operating costs.

The airline seems to have had some success plugging inefficiencies but the wider trading environment will clearly continue to test profitability.

Weighing the UK index down was the Energy sector, with BG Group, BP and Royal Dutch all losing out in early trading – down 2.29%, 0.88% and 1.62% respectively.

Despite a slightly languorous session of trading so far today UK investors continue to show unwillingness to leave their long positions.

Q2 GDP figures from the US this afternoon may well set the tone for the next few weeks on the equity markets.

A 1.5% contraction is being touted as a likely outcome, but anything better could well add further momentum to these buoyant markets.

On the flipside, while the UK market is sitting at (or around) its year-high, a worse-than-expected figure may push the balance in favour of a large-scale selloff and see investors begin a new month on a more cautious note.

Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.

Good Luck!

DB

The above comments do not constitute investment advice Clean Financial accepts no responsibility for any use that may be made of them.

Content provided by IG Index which is Authorised and regulated by the Financial Services Authority. FSA Register number 114059.

Financial Market Comments from Philip Gillet, Sales Trader, IG Index.

In the morning session the FTSE is trading around the 4590 level.

The UK’s leading index is steadily pushing higher following the release of better-than-expected first-quarter results from Telecoms giant BT.

The results came in better than analyst expectations and BT’s share price was sent soaring from 12p to 125p, its highest since January, despite a 44% drop in profits.

There are positive signs in the housing sector after Nationwide announced that UK house prices rose 1.3% in July, the third rise in as many months.

However yesterday saw the release of data showing that UK mortgage lending was down to £343 million, lower than the expected £600 million mark. This drop in mortgage lending appears slightly baffling and may come down to people’s reluctance to sell at comparatively lower prices, leading to less supply and no market to drive prices.

Another reason could well be that foreign buyers are taking advantage of a weak sterling. Either way, there still seems to be a risk to the downside on house prices.

Also see Spread Betting on House Prices.

Looking ahead to the US open, we are calling the Dow around the 9150 level.

Traders will be looking at initial jobless claims figures out in the US – expectations are that first time applications will rise by 26,000 to 570,000.

Whilst the markets are definitely in a more buoyant mood at the moment, there seems to be little in the way of good news for the workers.

Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.

Good Luck!

DB

The above comments do not constitute investment advice Clean Financial accepts no responsibility for any use that may be made of them.

Content provided by IG Index which is Authorised and regulated by the Financial Services Authority. FSA Register number 114059.

Financial Market Comments from Philip Gillet, Sales Trader, IG Index.

Coming up to the mid-morning point, the FTSE is trading around the 4565 mark, up over 30 points as it recoups some of yesterday’s losses.

Cadbury’s has this morning announced that it’s raising profit forecasts, mainly due to lower costs and cheaper raw materials.

Data out from the UK shows a slight upturn in mortgage approvals, suggesting that the housing market may be easing slightly. This would further support the positive new homes data that came out of the US on Monday.

But we are not out the woods yet – UK mortgage lending was down to £343 million, well below the expectation of £600 million. It is apparent that while Alistair Darling has begun to play “hardball” with the banks, credit is still not flowing freely – the grease intended to ease the UK economy back into action is still not reaching the cogs.

Having gained nearly 400 points in the past weeks, the markets are now awaiting durable goods data from the US, a key sign of industrial output. Expectations are that there will be decrease of 0.6%, as industrial plants such as GM closed for part of last month.

While this isn’t great news, it does appear that equity markets have finally stabilised somewhat and are no longer simply reacting to every piece of negative data by shedding hundreds of points.

The longer this period of relative stability lasts, the more weight will be added to the bulls’ view that this is no bear market rally.

Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.

Good Luck!

DB

The above comments do not constitute investment advice Clean Financial accepts no responsibility for any use that may be made of them.

Content provided by IG Index which is Authorised and regulated by the Financial Services Authority. FSA Register number 114059.

Financial Market Comments from Philip Gillet, Sales Trader, IG Index.

In late morning trading UK stocks are little changed on the day.

Some of the weariness that was creeping into the UK stock market yesterday has continued into this morning’s trading. Sentiment is still positive but it looks as if investors are happy to be on the sidelines for the moment, following the relentless rally over the past couple of weeks.

Oil giant BP has also added to the restrained tone with the statement accompanying its second-quarter results suggesting that there is little evidence supporting the likelihood of an increased demand for oil. This in turn suggests that the industry has not yet started gearing up significantly in anticipation of an economic upswing.

This is bound to inject an element of caution into the market up here. There is always the worry after a strong bounce-back that the market has got at least a little bit ahead of itself and that seems to be the tone for now.

It is a similar approach ahead of the US open, with little change expected for the Dow Jones Index at the moment.

The latest US house price index and Consumer Confidence numbers this afternoon should help shed some light on how sentiment is in Main Street USA, but it is going to be earnings news that continues to dictate market direction from here.

It would not be surprising to see at least some weakness in stock markets over the next couple of days, but for now markets seem to be holding relatively firm.

On the FTSE the 4500/4550 area continues to provide support and traders still seem happy to step in and buy these small dips at the moment.

Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.

Good Luck!

DB

The above comments do not constitute investment advice Clean Financial accepts no responsibility for any use that may be made of them.

Content provided by IG Index which is Authorised and regulated by the Financial Services Authority. FSA Register number 114059.

Financial Market Comments from David Jones, Chief Market Strategist, IG Index.

In mid-morning trading there is little change for the FTSE 100. After a positive start UK stocks lost some ground in early trading and are fairly flat on the day so far.

The stand-out winner this morning is publisher Pearson Group with strong first half results that lifted the share price by around 9%.

The company’s share price has significantly underperformed over the past three months, leaving some traders hoping that today’s spurt is part of a continued recovery targeting a run back to the year’s high around 740p.

Although there has been some slight weakness for the index this morning, the FTSE 100 still remains positive overall and within the recovery that started two weeks ago.

After proving to be a ceiling for so long, many are hoping that the 4500 level will now become the floor to any weaknesses, with dips back to here expected to tempt out fresh buyers.

Looking ahead to the US open, we expect the Dow Jones to open around 40 points higher, which would set fresh highs once again for 2009.

Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.

Good Luck!

DB

The above comments do not constitute investment advice Clean Financial accepts no responsibility for any use that may be made of them.

Content provided by IG Index which is Authorised and regulated by the Financial Services Authority. FSA Register number 114059.