Dow Jones Futures Drop as JPMorgan Announces $2 Billion Trading Loss
A choppy open to trading sees the FTSE practically unchanged for the day so far, despite the unrelenting bad news emerging around the world.
A weak start for the FTSE has been followed by a surge higher this morning as once again rumour and hope regarding a Greek government sets the tone for the session.
News of JPMorgan’s $2 billion trading loss prompted a very jittery overnight session in Asia.
This was not helped by CEO Jamie Dimon’s comments to the effect that the loss was down to poor judgement and that the situation could get worse as new information is uncovered.
All five major banks in London lost ground on the news, while miners fell back following weaker retail sales and industrial production figures from China.
However, the FTSE reversed course during the morning as Greek conservative leader Antonis Samaras gave hope that the bickering politicians in Athens might yet put together a government of national unity.
Mr Samaras said that a proposal by the Democratic Left party for a coalition government was close to his party’s position.
This has led to gains, but these could vanish just as quickly as they appeared if the talks start to break down yet again.
Ultimately, the situation remains the same as it has been all week; online spread betting markets remain hostage to developments in Athens.
It’s a quiet day for economic data, with only the Michigan confidence index out during the US session.
Dow futures pared losses during the morning, but the index is still expected to start lower this afternoon as a result of the unpleasant surprise from JPMorgan.
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.
UK Spread Betting Markets Struggle After Spanish Bailout of Bankia
In mid-morning trade it’s been a calmer start to the day’s business, with the FTSE 100 broadly unchanged.
After the volatility seen in the last couple of days, the UK spread betting market has paused for breath, although developments in Europe still remain the theme.
The part-nationalisation of Bankia by the Spanish government seems to be welcomed as an attempt to try and draw a line under any further potential for a banking crisis here.
And a last ditch attempt to form a government in Greece by the Socialists has investors crossing their fingers but probably holding out little hope.
Sainsburys still remains in favour after yesterday’s results saw it gain market share in the UK, probably at the expense of Tesco.
Looking ahead to the US open, the calmer start in Europe suggests that the Dow at the moment is going to start the day broadly unchanged.
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.
Shares Spread Betting: Strong Earnings Boost Sainsbury’s Stocks
UK Markets
Markets have continued their weaker tone today as uncertainty in Europe and fears about the solvency of Spanish banks keep investors on the back foot.
Talk that the EU was considering withholding a €5.2bn bailout payment to Greece, due tomorrow, hasn’t helped investor’s frayed nerves.
Talk that Bankia, Spain’s fourth largest bank could be bailed out after the market close, hasn’t stopped the IBEX35 closing in on its lowest levels since 2009.
Ex-dividend stocks have also proved to be a drag shaving 15 points off the index but the overall sentiment remains one of concern about political deadlock in Greece and uncertainty over the future of Greece within Europe.
There have been some bright spots but with such a negative tone it’s been hard for shares spreads betting markets to focus on anything positive.
The UK’s third biggest supermarket Sainsbury’s was an early gainer after reporting an increase in operating profits of 7%, above analysts’ expectations and subsequently announced an increase in its dividend.
The company also increased its market share to 16.6%, the highest in a decade, despite a tough operating environment.
Terrestrial broadcaster ITV is also doing well after posting a positive Q1 trading update with sales up 13%, driven by a better performance from ITV studios.
On the downside, the usual suspects of basic resource and industrial stocks have been hit the hardest.
Weir Group slide sharply on the back of a broker downgrade and disappointment from its Q1 trading update saw a 26% drop in sales at its oil and gas division.
Business software company Sage Group is also another heavy loser despite reporting a 3% rise in profits, as concerns about recessionary headwinds in the UK and France as well as the rest of Europe weighs on the outlook.
US Markets
US markets opened lower this morning as concerns about Europe continued to preoccupy US investors.
Stocks in focus include Walt Disney after the company posted results after the closing bell last night that beat expectations of $0.55c a share coming in at $0.58c a share on revenue of $9.63bn.
News Corp is expected to report its latest Q3 earnings today with expectations of $0.31c a share, up from $0.26c a year ago.
After the bell Cisco Systems is expected to announce Q3 earnings of $0.47c a share, up from $0.42c a year ago.
Forex Markets
The Japanese yen has once again pushed higher along with the US dollar as investors flee into the twin safe haven plays.
This once again gives the Bank of Japan a major problem as Japanese exporters are hindered by when the yen appreciates.
Once again the Australian and New Zealand dollar have borne the brunt of the selling, along with the Canadian dollar as metal and oil prices drop sharply on fears of a slowdown in global demand.
Rising Spanish bond yields, pushing above the 6% level on the 10 year have reinforced the risk off mentality, pushing the single currency to its lowest levels since the end of January.
The pound has also slid as disappointing retail sales numbers from the British Retail Consortium for April showed an annual decline of 3.3%, wiping out the rise of 1.3% in March.
This decline does have to be set into the context of the timing of last year’s Royal Wedding and a late Easter.
There is also a slim chance that the Bank of England may well announce further measures to stimulate the UK economy by more QE at its latest rate meeting tomorrow.
Commodities Markets
Copper prices have continued their slide from yesterday, closing on levels seen a month ago when it was trading below $3.60.
Crude oil has also continued its recent declines with US prices hitting their lowest levels this year, declining for six days in a row, after crude stockpiles hit their highest levels since 1990.
Weekly inventory data also surged putting additional downward pressure on prices as US prices pushed below the 200 day MA joining Brent prices which have been trading below their long term average for the third day in a row.
Gold prices have also slid below the $1,600 level for the first time since early January as gold spread betting investors put cash back into the surging US dollar.
Spread betting and CFD trading carry a high level of risk to your capital. You may lose more than your initial investment. These products 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.
UK 100 Spread Trading Market Falls as Hollande Wins French Elections
In mid-morning trading, the UK 100 is down around 15 points as markets in London get their first chance to react to the European elections over the weekend.
A degree of calm reigns this morning, although there is an overriding sense that this is just a temporary lull while everyone gathers their breath in the wake of yesterday’s excitement.
Now that the first flurry of selling has died down, we have to wait and see how things will play out.
In France, Hollande will have little time to settle into his new residence, as he needs to begin work with Chancellor Merkel to ensure that the two biggest Eurozone countries maintain a united front, at least publicly.
‘Merkozy’ is a thing of the past, but will the new team be any better at saving the euro?
In Greece, the far left Syriza party now takes its turn at forming a government, but with so many competing parties it looks to be an almost impossible task.
Syriza has three days to try and put a coalition together, and then it becomes former governing party Pasok’s turn.
With little economic data of importance out today, all eyes in the financial spread trading markets remain on Europe.
A lack of direction from the various sides could mean that markets will continue to slip lower, especially given Friday’s weaker US jobs number which removes the ‘improving US economy’ element of the bullish case. The excitement has only just begun.
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.
Guide to Spread Trading on Salamander Energy Shares
Where to Spread Bet on Salamander Energy?
You can spread bet on Salamander Energy with any of the following companies:
Although note that you can also spread bet with other Spread Betting Companies.
Spread Betting on Salamander Energy
If an investor wants to invest in firms such as Salamander Energy then one option could be to spread bet on the Salamander Energy share price.
Looking at the Tradefair spread betting site, as of Friday, they were showing the Salamander Energy Rolling Daily market at 195.7p – 196.9p. Therefore, you can spread trade on the Salamander Energy shares:
- Rising above 196.9p, or
- Falling below 195.7p
When financial spread betting on UK equities you trade in £x per penny. So, if you decided to have a stake of £20 per penny and the Salamander Energy share price changes by 5p then that would make a difference to your profit/loss of £100. £20 per penny x 5p = £100.
Rolling Daily Equities Markets
One thing to note is that this is a Rolling Daily Market which means that there is no closing date for this market. You do not have to close your trade, should it still be open at the end of the trading day, it will stay open and roll over into the next trading session.
If you do let your trade roll over into the next day and are spread betting on the market to:
- Increase – then you would normally pay a small financing fee, or
- Decrease – then a small payment is usually credited to your account
To learn more please read Rolling Daily Spread Betting.
Salamander Energy Rolling Daily Equities Spread Betting Example
If we consider the above spread of 195.7p – 196.9p and assume:
- you have analysed the equities market, and
- you think that the Salamander Energy share price is likely to increase and move above 196.9p
then you might buy a spread bet at 196.9p and invest, let’s say, £10 per penny.
So, you gain £10 for every penny that the Salamander Energy shares spread betting market goes higher than 196.9p. However, it also means that you will lose £10 for every penny that the Salamander Energy market decreases below 196.9p.
Considering this from another angle, if you were to ‘Buy’ a spread bet then your profit/loss is found by taking the difference between the settlement price of the market and the initial price you bought the market at. You then multiply that difference in price by your stake.
Therefore, if after a few hours the shares started to increase then you might think about closing your trade and therefore guarantee your profits.
If that happened then the spread, set by the spread betting company, could change to 205.8p – 207.0p. In order to close/settle your position you would sell at 205.8p. So, with the same £10 stake you would calculate your profit as:
P&L = (Closing Level – Initial Level) x stake
P&L = (205.8p – 196.9p) x £10 per penny stake
P&L = 8.9p x £10 per penny stake
P&L = £89.00 profit
Speculating on equities, whether by spread betting or otherwise, can go against you. In this case, you had bet that the share price would increase. Naturally, the share price might decrease.
If the Salamander Energy share price weakened, against your expectations, then you could close your trade to stop any further losses.
If the spread dropped to 189.2p – 190.4p you would sell back your position at 189.2p. If so, this would result in a loss of:
P&L = (Closing Level – Initial Level) x stake
P&L = (189.2p – 196.9p) x £10 per penny stake
P&L = -7.7p x £10 per penny stake
P&L = -£77.00 loss
Note – Salamander Energy Rolling Daily equities market quoted as of 04-May-12.
Salamander Energy Spread Betting – More Details
For more information on trading Salamander Energy, also see Salamander Energy Spread Betting.
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.