Category — Financial Outlook

A quick look at the spread betting markets yesterday and the equities markets were pretty benign in the morning session, trading in positive territory ahead of US payroll data, buoyed by positive results from Royal Bank of Scotland as it returned to profit for the first time in 3 years.

BP was also trading higher, hitting 2 month highs after confirming that the Gulf of Mexico Well had finally been sealed with cement.

UK economic data out in the morning had disappointed slightly with industrial production showing a surprise 0.5% fall for June, however the figure was dragged down by annual maintenance work in the North Sea being carried out two months earlier, instead of in August.

In other UK data, July producer output prices showed some evidence of softening slightly, giving comfort to the Bank of England’s belief that inflationary pressures would begin to subside into the end of the year.

Sterling took a bit of a tumble on the back of this news but has managed to regain some ground especially against the weakening Dollar, as it traded near $1.6000 for the first time since February.

US Payrolls Data

The long awaited US payrolls data for July soon put paid to the positive mood as it came in showing a decline of 131k jobs against an expectation of a loss of 65k, the second monthly drop in a row, while private payrolls also disappointed showing a rise of 71k against an expectation of a gain of 90k.

The disappointment in these numbers sent equity markets plunging from their highs while the US Dollar also sank, as risk came off and the positive earnings story of the past week was replaced with the negative macro story as markets again focused on the state of the US economy, and the jobs outlook for the remainder of the year.

In the forex spread trading markets, the US Dollar has continued its 8 week decline.

This coming weeks Federal Reserve meeting will now be the next focus for the market, as attention switches to the overall tone of next weeks rate statement with respect to the outlook for the remainder of the year.

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.

The above comments do not constitute investment advice and neither CMC Markets nor Clean Financial accepts any responsibility for any use that may be made of them.

Financial Market Comments from Michael Hewson, Market Analyst, CMC Markets.

CMC Markets is Authorised and regulated by the Financial Services Authority.

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

In mid-morning trading blue chips in London have made a solid start to the week.

After some disappointing performances towards the end of last week, trading in London has got off on a much better footing so far this week, with the FTSE 100 making another lunge towards 5400.

HSBC has kicked off the latest set of bank results and although the bank has seen income double in the first half of the year, profits are still somewhat below consensus expectations.

With this week seeing numbers from the other major UK banks, HSBC numbers may serve to dampen down some of the market’s early enthusiasm as the day goes on.

Looking ahead to the US open, at the moment we are expecting the Dow Jones to start off around 100 points higher than Friday’s close.

Overnight trading is showing that the US market is shaking off some of the short term gloom that hit after the latest GDP data on Friday and the index is launching another attack on the 10,600 level.

This has capped any rallies for the past six weeks and strength through here could give global stock markets a fresh impetus.

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 and 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, Head of Research, IG Index.

The FTSE hasn’t really got out of bed this morning, dropping about 18 points to around the 5295 level.

It’s been a cautious start for the FTSE 100 today as investors wait for the US Commerce Department’s advance report on GDP this afternoon.

A Bloomberg survey has forecast an annual growth rate of 2.6% for the second quarter, which would be down on the 2.7% pace generated in the first quarter.

The decline is expected to be attributed to increased imports and declining consumer spending and follows weak data on durable-goods orders and consumer confidence during the week.

However, London’s blue chips still managed to find time to decline around 18 points in early trading, as Dublin-based biopharmaceuticals company, Shire, dropped 2.75% after an analyst downgrade.

British Airways revealed a pre-tax loss of £164 million for the three months from April to June. This is larger than the £148 million loss the airline recorded for the same period last year. Despite this, there was enough that was positive about BA’s report that shares were in fact up 2.45% at 10am in London.

Samsung Electronics unveiled record quarterly net profits of £2.3 billion, an 83% rise on the same period in 2009.

But all eyes will be on Washington today to see just what sort of a statement the Commerce Department will make about the economic recovery in the US.

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 and 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 Yusuf Heusen, Senior Sales Trader, IG Index.

In mid-morning trading, shares in London have bounced back and reclaimed some of the ground lost yesterday.

Pleasing numbers from some blue-chip heavyweights has lifted sentiment this morning.

Telecoms business BT Group has seen profits rise in the first quarter thanks to cost cutting measures and pharma AstraZeneca has beaten expectations for second quarter profits and raised its forecast for the next one.

This has meant a strong start to the day for both shares which is helping to inspire a broad based rally across a mix of sectors.

There had been concerns that sentiment towards UK shares was on the turn in recent days, following the 10% plus rise for the index this month.

While the jury is still out on how much upside there is left from current levels, today’s positive earnings – and a further drop in German unemployment has helped inject a little enthusiasm back into trading.

Looking ahead to the US, we are expecting the Dow to start off around 40 points higher than last night’s close.

The 10,600 highs from June still remain the big hurdle for this index and with traders awaiting Friday’s release of the latest GDP numbers, we could be in for a day of treading water with no real direction.

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 and 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 Yusuf Heusen, Senior Sales Trader, IG Index.

Early trading on the FTSE hasn’t had much of an impact so far, with the UK index holding steady after last night’s trend-breaking dip.

The burst of confidence in the financial sector provoked by the European stress tests is continuing to buoy British bankers, with Lloyds, Barclays and RBS extending their positive run this morning.

In addition, the proposed financial reforms out of Basel, which had the markets flinching in anticipation, appear to be leaning more towards silk than sandpaper – a turn of events which has has poured soothing balm on bankers’ fears.

This morning’s other champions are once again the mining companies, as positive performance out of the Asian markets overnight lent commodities demand the usual upward swing.

Last night’s poor data out of the US, which led to the FTSE 100’s late slump, will no doubt have analysts on edge; and the twitchier bears could easily look at that dip as an opportunity to make the most of the month’s steady rise and seize profits before any potential backsliding kicks in.

Among those companies reporting today there are signs the exodus might already have begun, with engineering group Invensys seeing share prices fall 5.5% despite announcing improved expectations for the year off the back of a respectable Q1 performance.

British Gas owner Centrica saw a similar lack of confidence hit its share prices, even in the face of a six-month profit increase of 65%.

With no major economic data due out of the UK today, it’s worth watching the corporate reports and subsequent share movements to see whether the bears are strapping themselves into the FTSE’s ejector seat.

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 and 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.