Category — Shares Spread Betting

The FTSE 100 has lurched downward this morning, following the lead set by Japan overnight, with investors spooked by Fed minutes and weak Chinese data.

Yesterday, index markets seemed unstoppable, with the rally carrying all before it.

Ben Bernanke’s testimony seemed to fire the starting gun on yet another rally in risky assets, but not even 24 hours later the mood has switched from greedy to fearful.

Taken in isolation, the Ben Bernanke speech, the Fed minutes and the Chinese data would probably only have a limited impact, but having come all at once investors are finding it hard to remain sanguine.

That said, even if this does turn into a sustained down move over a period of a week or two, the fundamental narrative of central bank easing and improving economic data should reassert itself.

Understandably, the mining sector is hard hit this morning, as investors reduce exposure on fears that more weak Chinese data is on the way.

Company news is being generally ignored in the undignified rush for the exit, but United Utilities are managing to rise following good results, as it boosts dividends yet again.

Should the general risk-off atmosphere persist for a while, ‘safe haven’ equities such as utilities should fare better than those more exposed to shifts in economic data.

Although the economic calendar is fairly busy this afternoon, with jobless claims, home sales and PMI figures, the aftermath of the Bernanke/China farrago will be the dominant story.

Trying to second-guess the Fed has been an entertaining pastime for several years. This is likely to enter overtime with every piece of economic data now that we know the committee is more divided than previously suspected.

Ahead of the open, we expect the Dow Jones to start sharply lower, down 130 points at 15,177.

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.

Financial Market Comments from Chris Beauchamp, Market Analyst, IG Index.

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.

In mid-morning trading, the UK 100 is slightly lower, down five points, ahead of crucial developments in the US this afternoon.

UK economic data provides a useful distraction ahead of key events in the US this afternoon.

The latest minutes from the Bank of England showed that there was once again no change from Threadneedle Street, with the committee split 6-3 for the fourth consecutive month.

However, any hope that the economy is showing slow but steady signs of improvement will have taken a knock with the simultaneous release of abysmal retail sales figures.

This is yet another reminder that consumer spending is terribly weak, showing that although other parts of the economy might be better, consumers are still sitting tight.

If Mark Carney is to engineer the recovery we all want then the rebuilding of consumer confidence and spending is perhaps the biggest hurdle.

In an area related to consumer spending, Scottish & Southern Energy has enjoyed a surge in profit thanks to higher energy prices.

The function of a utility share is to provide dividends, and SSE is doing that in spades, with a yield of around 4.8% and a PE of 14 the shares remain a compelling prospect for yield-hunting investors.

Fed watchers have a busy day ahead, as Chairman Ben Bernanke testifies to Congress and the latest set of minutes are released.

Mr Bernanke’s testimony and the subsequent questioning is likely to be the more closely-watched, since his comments have more of an element of unpredictability, with the Fed minutes set to echo the hawkish view seen in previous iterations.

Watch for the spectacle of a Fed Chairman trying to signal that all options remain open, while simultaneously trying not to spook the market unnecessarily.

Ahead of the open, we expect the Wall Street index to start five points higher at 15,392.

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.

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

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.

A brief spread trading video discussing the FTSE at 12 year highs and investors awaiting Bernanke’s testimony to Congress for signs of a tapering of US quantitative easing.

This week will also see the latest Japanese monetary policy statement, UK GDP revisions, German sentiment data and LTRO repayments.

Spread Betting & CFD trading carry a high level of risk to your capital and you can lose more than your initial deposit. Only speculate with money that you can afford to lose. These trading products may not be suitable for all investors so seek independent advice.

Video content by Capital Spreads.

The contents on CleanFinancial.com are for information purposes only and are not intended as a recommendation to trade. Nothing on this website should be construed as investment advice.

Neither CleanFinancial.com nor any contributing company/author accept any responsibility for any use that may be made of the above or for the correctness or accuracy of the information provided.

Content provided by Capital Spreads which is Authorised and regulated by the Financial Services Authority. FSA register number 3218125.

Forex technical analysis video looking at the moves in GBP/USD following lower-than-expected UK inflation data and the potential for US dollar falls if Bernanke fails to mention an exit from QE.

CMC Markets’ Michael Hewson discusses support & resistance levels, market trends and target prices for:

• EUR/USD – Recent dollar strength based on idea that Bernanke or FOMC will mention tapering QE
• GBP/USD – UK inflation data sees sterling weaken but MPC minutes may encourage a bounce

Spread Betting & CFD trading carry a high level of risk to your capital and you can lose more than your initial deposit. Only speculate with money that you can afford to lose. These trading products may not be suitable for all investors so seek independent advice.

Video content by Michael Hewson of CMC Markets

The contents on CleanFinancial.com including any articles or videos are for information purposes only and are not intended as a recommendation to trade. Nothing on this website should be construed as investment advice or form the basis of an of investment decision.

Neither CleanFinancial.com nor any contributing company/author accept any responsibility for any use that may be made of the above or for the correctness or accuracy of the information provided.

Content provided by CMC Markets. CMC Markets UK plc and CMC Spreadbet plc are authorised and regulated by the Financial Services Authority in the UK, registered offices, 133 Houndsditch, London, EC3A 7BX.

In mid-morning trading, the FTSE 100 is little changed, pausing for breath after smashing through the 2007 highs yesterday.

With the FTSE 100 index happily sitting at its highest level since 2000, there will be some who are wondering whether this rally has got ahead of economic fundamentals.

Perhaps global growth doesn’t merit markets at these highs, but liquidity-boosting actions from the central banks seem to be taking precedence.

On that subject, today’s inflation figures for the UK will please both the government and the Bank of England.

A drop in year-on-year CPI growth to 2.4% will give incoming Governor Mark Carney more room for manoeuvre if giving the economy a shot in the arm via additional QE or perhaps more unconventional measures.

Abenomics has apparently proved its worth in Japan, perhaps a dose of it in the UK might help jolt Britain out of its current malaise.

At the bottom of the FTSE today is cruise line operator Carnival, with the shares in ‘full reverse’ after it reduced profit forecasts due to a drop in fares.

Having endured a difficult season, with liners breaking down all over the place, the company will now struggle to rebuild its battered image with potential customers.

Miners are bouncing this morning after yesterday’s impressive late rebound in gold and silver but it would take a brave man to suggest that the metals have halted their rapid declines.

US markets were somewhat diffident yesterday, failing to hold on to the highs seen earlier in the session, but they remain in wait-and-see mode ahead of Ben Bernanke’s testimony to Congress tomorrow.

A couple of Fed speeches today will have investors eagerly looking for any hints as to potential changes in monetary policy, but aside from that we are likely to have to endure another fairly uneventful session.

Ahead of the open, we expect the Dow Jones to start only five points lower at 15,330.

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.

Financial Market Comments from Yusuf Heusen, Sales Trader, IG Index.

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.