The regular monthly spread trading review from IG Index.
IG Index FTSE 100 Spread Betting - September 08
"FTSE 100 slides on banking worries"
The stock-market recovery in August, the first positive month since April, ended up looking like a 'dead-cat bounce' by the end of September, as the market slid by more than 700 points. The reasons were well publicised and mainly centred around concerns for the global banking sector.
High-street banks such as HBOS suffered significant daily falls in share price, leading to a proposed merger between HBOS and Lloyds TSB and an FSA ban on the short-selling of financial stocks. The news led to a sharp bounce back at end of September but any short-term optimism has been shrugged off so far in October.
September saw the FTSE 100 slip back to levels not seen since 2004, leaving many worrying about how much deeper this crisis has got to run. Various government actions have so far had a limited effect in bringing optimism back to financial markets.
(IG Index price data: compiled 6 October 2008)
Dow Jones (Wall St) Spread Betting
"Wall Street suffers biggest ever points fall"
The banking crisis originated in the US with sub-prime lending and the subsequent fall in the housing market. September saw some steep falls in American markets and some dramatic events as the month evolved.
First of all, there was the effective nationalisation of the two mortgage giants Fannie Mae and Freddie Mac. When news of this broke, some hoped that this would signal the beginning of the end of the credit crunch. But soon after, Lehman Brothers went bankrupt, sending another shock wave across markets.
When the US first announced a $700 billion bail-out of the financial sector, the indices staged significant rallies. But when the initial vote on 29 September failed to pass the bill, the Dow Jones recorded its biggest ever one-day fall. Going into October, markets have remained under pressure with this index trading below the 10,000 mark.
(IG Index price data: compiled 6 October 2008)
IG Index Oil Spread Betting
"Crude Oil back below $100"
For some people the one positive from the current economic slowdown has been the drop in crude oil prices. Back in July the multi-year uptrend was still very much in effect and oil hit a record of $147 per barrel.
Since then however we have seen a significant trend reversal as a number of speculators think the slowdown will lead to a drop in oil demand. During September, the price moved back towards $90 per barrel before rallying briefly above $100.
In early October, further worries about a lack of demand have weighed on the price as oil traded below $90 per barrel, its lowest level in more than seven months.
(IG Index price data: compiled 6 October 2008)
The above comments do not constitute investment advice and neither IG Index nor Clean Financial accept any responsibility for any use that may be made of them.
IG Index provides an execution-only service. The material above does not contain (and should not be construed as containing) investment advice or an investment recommendation, or, an offer of or solicitation for, a transaction in any financial instrument. IG Index accepts no responsibility for any use that may be made of these comments and for any consequences that result.
Risk Warning: 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.
'IG Index Review of September' by IG Index, updated 09-Oct-08
For related pages also see:
IG Index Review of November, updated 15-Dec-08
While the FTSE 100 managed to hold above its earlier lows, this was not the case for the S&P 500. During November, the broader US index slipped back to...read article. IG Index Review of October, updated 10-Nov-08
The last few months have seen the banking sector in the limelight as the sub-prime drama continued to unfold. But a major casualty of the recent slowdown has been the mining sector which is...read article. IG Index Review of September, updated 09-Oct-08
When the US first announced a $700 billion bail-out of the financial sector, the indices staged significant rallies. But when the initial vote on 29 September failed to pass the bill, the Dow Jones recorded its biggest...read article. IG Index Review of August, updated 10-Sep-08
The strength of the US dollar took its toll on the price of gold. Back in March we saw all-time highs for the yellow metal but since then it has not had the same sort of momentum. In August the price broke below the $850 support level and eventually traded down to ...read article. IG Index Review of July, updated 07-Aug-08
The second half of July saw a significant bounce-back, with the FTSE 100 up around the 5400 level. The big question in the weeks to come is whether...read article. IG Index Review of June, updated 06-Jul-08
The second half of May saw weakness creeping into the UK blue-chip index and this really gathered momentum in June. Although there were brief signs of strength throughout the month, the FTSE 100 still lost more than 400 points and dropped back to levels not seen since...read article. IG Index Markets May, updated 09-Jun-08
The price of oil is seldom out of the news for long and last month was no exception. May saw the multi-year trend for crude oil continue, with the July contract pushing out to $135 a barrel. That is a 35% gain for this year already and more than double...read article. IG Index Markets April, updated 07-May-08
US dollar weakness, particularly against the euro, is another trend that has been clear for some time. The EUR/USD hit a fresh high in April, albeit briefly, with the currency pair poking above the $1.6000 level for the...read article. IG Index Markets March, updated 04-Apr-08
After a period of sideways trading in February, the bearish sentiment returned to the UK stock market in March. By the end of the month, the FTSE 100 was down by more than 11% for the year to date. The worst start to a year since the...read article. IG Index Markets, updated 04-Mar-08
Monthly Review: For much of the month, the 6000 level proved to be a ceiling for the index with successive rallies into this zone bringing the sellers back out. Over the last week, the FTSE staged more of a decisive push through here but we go into March with many still wondering if there is a more sustainable rally to come. Or is this just a...read article. IG Index Spread Betting Markets, updated 01-Feb-08
Monthly Review: Where next for the major world stock markets? During January, the FTSE 100 traded back to levels not seen since October 2005. This has left many concerned that this kind of a decline is not a healthy correction but a sign of things to come. Going into February, the market has regained the 6000 level but it is probably fair to say that ...read article.
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