Spread Betting and London Stocks Off to a Positive Start
Financial Market Comments from David Jones, Chief Market Strategist, IG Index.
After last night’s strong finish in the US, London stocks have got off to a positive start.
All eyes are on the earnings announcement from Goldman Sachs, as stock markets around the world have rallied on hopes that the banking sector is going to deliver the strongest profits since the credit crunch began.
Investors are hoping that the sharp bounce back seen over the last couple of days ends up being more sustainable than some we have been used to.
Closer to home, this morning’s CPI data for the UK dipped, as expected, below the Bank of England’s 2% target, showing the price had risen by 1.8% over the last year. This was widely forecast and market reaction has been negligible, with the focus firmly back on corporate news.
Better than expected news out of the US earnings season could help bolster confidence for a wider recovery, something economic news has failed to do over recent weeks.
The nagging worry is that the latest rally this week could be setting markets up for a disappointment and investors are hoping that it doesn’t turn into “buy the rumour, sell the news”.
Looking ahead to the US open, overnight futures are still positive and at the moment we are expecting the Dow Jones to open around 10 points higher from Monday’s close.
Retail Sales for June are due out an hour ahead of the open, as are the announcements from Goldman’s and Johnson and Johnson.
By the end of trading in London today, traders are expecting to have a much better idea as to whether in the short-term at least we have seen the worst of the slide for stock markets.
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.
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