Posts from — December 2009

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

The FTSE suffered an initial drop this morning of around 32 points by 10am, down 0.60% on last night’s closing figures.

The biggest UK gainer so far has been Rentokil, up 4.10 % by 10am. The biggest loser is Home Retail Group, down 3.01% on last night’s close.

Much of the overall drop today came from weakness in the mining sector, a knock-on effect of copper prices taking a tumble on the metal markets.

The morning’s cautious start has brought yesterday’s momentum to an abrupt halt. It comes after the Fed’s announcement that both interest rates and lending rates to banks would stay the same for the time being.

The Dollar reacted well to this, up to its highest levels in three months, while the old adage of ‘strong Dollar weak stocks’ shows true for the most part.

It was widely expected that the Fed would be reluctant to worry the markets, with all signs pointing to near-zero rates for the next six months.

However, investors remain mindful of the fact that low rates are a temporary measure, with the morning’s results showing no perceptible surge in the markets.

The Fed’s upgraded assessment of market conditions is indicative that it’s nudging closer to what must be its ultimate goal of withdrawing financial support in early 2010.

With this is mind, investors seem to expect little volatility in the short-term, taking a relaxed approach to the markets as the year draws towards its close.

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 Anthony Grech, Market Analyst, IG Index.

In early trading, the FTSE has added around 34 points to last night’s closing level.

Today’s strength for equities has been fairly broad-based but unspectacular, with the biggest gainer, Resolution, up 3.5% by 10am in London.

Markets seem to be in limbo ahead of the Fed’s announcement on rates later today, with yesterday’s lacklustre trading session for the Dow also contributing to the markets’ sluggishness.

However, CPI data (also from the US) might give the markets a bit more shape this afternoon.

As markets start to wind down ahead of the festive season, traders will be wondering whether there is still some data-driven volatility left in equities this year.

Today seems as though it might set the tone for the final weeks of 2009. The Fed’s announcement will be received in the context of a global economy that appears to be recovering. Traders are well aware that low rates and cash lifelines cannot last forever.

The number of people in the UK claiming unemployment benefit has dropped for the first time in almost two years and VAT is about to head northwards.

When combined with potentially upbeat CPI data in the US later today, central banks will already be planning withdrawal strategies for economic life support.

How and when this happens will surely be the single biggest factor in determining the medium-to-long-term trajectory for equities.

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, shares in London have started off a little weaker with the FTSE 100 back below 5300.

A lacklustre performance by US shares on Monday seems to have set the sluggish tone for trading in London this morning with the FTSE slipping back to levels from the end of last week.

UK inflation data came as something of a surprise – for November this came in at 1.9% which was ahead of expectations and the fastest rise in six months.

Last week’s recovery drove the FTSE index back up above 5300 and since mid-November there has been a marked loss of momentum for the market whenever that barrier has been breached.

With no real compelling reason to load up on shares ahead of the break and with many already starting the wind-down into Christmas, it looks like we may be set for an “up one day, down the next” directionless week.

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 Tim Hughes, Head of Sales Trading, IG Index.

In mid-morning trading UK shares are sitting on healthy gains with the FTSE back above 5300.

So far this morning we have seen a fairly broad based rally. The news that Abu Dhabi is providing $10 billion to Dubai World has helped to ease any remaining jitters about the debt situation.

This gave a life to the financial sector, particularly the likes of Standard Chartered, as London started off by continuing to build on the recovery seen at the end of last week.

Looking ahead to the US, at the moment we are expecting the Dow Jones to start off around 50 points higher than Friday’s finish. The Dubai-inspired strength in Asian markets overnight has helped to lift sentiment around the world.

There is little of any note on the economic calendar for today so a strong early start could point to a steady but positive session ahead.

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 positive news flow has lifted the FTSE 100 towards the 5300 mark.

After a dismal few days, UK investors have found something to be cheerful about so far this morning.

UK producer prices have risen at their fastest rate in nine months, suggesting business is still on the upswing for factories. However, course this also raises the spectre of inflation a bit further down the line.

Also today, credit rating agency Moody’s stated that it has no immediate plans to downgrade the US and UK. Earlier this week it was these sort of concerns expressed by the ratings agencies that had put pressure on markets.

Some sense of normality has returned to the market – with the miners as ever helping to drag the index up.

This afternoon there are still retail sales figures to come out of the US and the potential for a shock later can’t be ruled out. But for now it looks like much of the worries from earlier in the week have been shaken off.

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.