A brief look at the markets over the course of the last week, supplied and sponsored by paddypowertrader.
For the latest weekly round-up see: Online Trading News.
Weekly Market Review: 25 Aug 08
Freddie Mac and Fannie Mae were making all the business headlines again last week, as the market now seems nearly certain that there will be some sort of federal intervention. A government step-in would likely see shareholders lose significantly, so their share prices tumbled over 51% and 37% respectively last week.
Along with high a US Producer Price Index figure (1.2% actual Vs 0.6% expected) indicating further inflation problems to come, equity markets had a nervous week. The S&P 500 fell 0.6%, Wall Street was down 0.4% and the German DAX shed 1.4%. The commodity heavy FTSE managed a positive week, gaining 0.7%, but the banking heavy Irish ISEQ dropped 5.5%.
Equities
There were few earnings reports out last week; to move individual equities. Instead commodity prices and the financial crisis pulled the strings. Commodity and mining stocks in particular had a strong week, with Rio Tinto gaining 11.6%. However financials and banks suffered.
FX
The Euro had a strong week, largely due to it having the least worst economic news. EUR / USD rose to $1.4773 and EUR GBP gained 1.3% to finish at £0.798. GBP USD fell 0.64% last week as the UK’s much lower than expected Q2 GDP figure took its toll.
Commodities
Gold had its first positive week in six, sparked by a $20 gain last Tuesday between 16.00 and 17.00. It didn’t look back as it went on to close at $825.6, gaining 4.8% on the week.
Crude Oil also bucked its short downtrend trend, rising 0.9% last week. This small gain masks the hugely volatile 5% price swings of Thursday and Friday.
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Weekly Market Review: 18 Aug 08
This week saw further proof that the slowdown in economic growth was spreading from the US across the globe. Growth in the Eurozone fell by 0.2% in the second quarter; this was the first quarter of negative growth since the creation of the Euro in 1999. On the other side of the world Japan announced an annualised 2.4% contraction in its economy.
Inflation continued to rise above forecasts, hitting 4.4% in the UK and 5.6% in the US. However, with no respite in the plummeting commodity market, there was a growing acceptance that the spike in inflation wouldn't last. The UK's influential Quarterly Inflation Report warned of higher inflation in the short-term but, more poignantly, of an increasingly gloomy outlook for growth.
It was notable that volatility had transferred from equities to currency and commodity markets. The usual dose of bad-news on banking stocks had little effect with the main equity markets showing hardly any change on the week. The FTSE fell 0.6%, DAX -1.8% and the Dow -0.8%. The S&P ended barely changed at +0.1%, but the Hang Seng dropped 3.3%. By contrast, the US Dollar rose by 2% and 3% against the Euro and Sterling respectively. Oil fell by 1.8% and gold crashed below the key $800 level.
Equities
Thoughts of a rally in banking shares were halted by another barrage of bad news from the sector. Credit rating agency S&P cut its ratings for Fannie Mae and Freddie Mac and rivals Moodys cut their rating for Morgan Stanley. Multi-billion Dollar write-downs were announced by JPMorgan, UBS and Wachovia, and RBS gave up trying to sell its insurance subsidiaries.
On a brighter note, Thomas Cook said that summer trading had been strong and that future bookings were ahead of last year's.
In Ireland Smurfit Kappa reported a 1% drop in second quarter profits, but an optimistic outlook saw their shares put on 12%.
FX
Traders continued to back a slowdown in the UK, selling Sterling despite a further rise in inflation. The Sterling Trade-Weighted Index fell to a 12-year low on Wednesday, and the 11-day decline against the Dollar was the longest in 35 years. The GBP USD spread bet ended the week at $1.8630, a fall of 3%. The Euro tumbled a further 2% against the Dollar, finishing at $1.4690.
Commodities
Despite an escalation in the Russian-Georgia conflict, commodities continued to fall. Further Dollar strength, and increasing fears of slower growth, destroyed the gold price. Over the week the precious metal dropped a massive $70, breaking below the key support level at $800. The 8% fall saw the price rest at $786.5. Crude Oil fell to a 3-month low, losing a further 1.8% on top of last week's falls. Brent Crude is currently standing at just below $111.
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Weekly Market Review: 11 Aug 08
Central banks provided the major stimulus for action this week on the markets. The US Fed, Bank of England, and the ECB all announced no change in their latest interest rate decisions. However, as usual, it was the accompanying statements from the Fed and the ECB which were followed carefully. A common theme emerged: increasing risks to economic growth. This was reinforced by a surprise cut from the Czech central bank and a dovish statement from the Australian Reserve. It looks like the world economy (and not just the US economy) is in a worse state then previously anticipated.
This negatively affected commodities prices, which are dependant on a resilient world economy and decoupling the US economy. Crude oil, gold and most other commodities had another dreadful week. Interestingly, the Dollar strength this week has had little to do with developments in the US itself, as the Fed statement was very balanced. Instead it was due to weakening Dollar crosses.
The fall in commodity prices and the more dovish central banks gave a substantial boost to world equity markets. The FTSE gained 3.1%, DAX 3.2%, S&P 2.6% and Nasdaq 5.1%. But despite an amazing opening ceremony, the Chinese markets showed no Olympic cheer on Friday, as the Shanghai Composite dropped 4.5%.
Equities
As we pass the first anniversary of the credit crunch, bank earnings continue to suffer. Royal Bank of Scotland announced a £691m loss - the first time it had fallen into the red. This prompted CEO Sir Fred Goodwin to issue an apology to shareholders. Barclays Chief, John Varley, was also apologised as their profits slipped 68% to £524m. In the States, Fannie Mae and Freddie Mac badly missed already low expectations, resulting in their share prices losing 23% and 26% respectively.
The Irish ISEQ index gained over 10% on the week, aided by strong financial sector gains and a surging Ryanair.
FX
Officials in Japan have finally admitted that the country has probably entered a recession. This has allowed the USD / JPY to gain 2.3% to 110.20. In Europe, Trichet said that downside risks are materialising, resulting in EUR USD shedding a whopping 3.4% to stand at barely over $1.50. GBP USD was dumped 2.70% to finish the week at an even $1.92.
Commodities
Commodities tumbled this week due to deteriorating growth prospects in world economies. Oil markets took the worst beating as Crude lost 8.9%. Less than a month after touching $146, Brent Crude is now barely over $113.
Gold didn’t fare much better, as it lost 5.9% to close at $856.70. Technically, it now stands at a crucial support level.
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Weekly Market Review: 4 Aug 08
It's been a busy week. In the equity markets wild swings from Monday through Thursday saw the FTSE 100, Dow Jones and the S&P 500 close either up or down by more than 1% each day. This largely reflected large movements in the Oil market and conflicting views on whether we have 'seen the worst' in the financial sector.
Amongst financials Merrill Lynch epitomised the craziness. On Monday it fell 12% and on Tuesday another 9.5% before rebounding 8% before Tuesday's close. The reason: they revealed they were selling $30.6bn worth of CDOs for just $0.22 on the dollar.
The Fed announced on Wednesday that they are extending emergency liquidity measures to January 2009. Elsewhere, despite President Trichet talking tough, inflation keeps rising. It is now at 3.3% in Germany and a record 4.1% in the Eurozone.
US, Q2 GDP of 1.9% disappointed analysts (2.3% expected). Non-farm payrolls showed a fall of 51,000 (-75,000 expected). However the unemployment rate rising from 5.5% in June to 5.7% this month seemed to grab more attention. For the record that's seven straight months of declines in the non-farm payroll jobs; 463,000 jobs shed in all.
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Weekly Market Review: 28 Jul 08
Equity markets began the week in good spirits. Corporate earnings were generally better than expected and a rally in oil and gold failed to attract any enthusiasm. However Thursday brought a harsh dose of reality in the form of weak economic numbers across the globe. In the UK retail sales collapsed, business sentiment across Europe deteriorated further and unemployment in the US continued to rise.
Minutes showed a change in the voting intentions of the UK's Monetary Policy Committee. The split vote included one in favour of lower rates, balanced by one wanting a rise in rates. No such indecision in New Zealand, where the central bank chopped 0.25% off rates and indicated there were more to come.
The oil price hit a 7-week low, helping the Dollar to strengthen. Equities failed to hold the higher levels and most indexes ended the week showing little change. The Dow fell by 1.1%, S&P -0.2, FTSE 100 -0.4 and Dax 30 +0.8. The Far East made back last week's losses with both the Nikkei and Hang Seng 4% higher on the week.
Equities
The peak in the US earnings season saw reports range from Amazon doubling its quarterly numbers, to shocking losses from Wachovia and Washington Mutual. Vodaphone, Easyjet and Costco all issued strong profit warnings, but Du Pont, Rolls Royce, BG and Phillip Morris were just some of the companies feeling pretty pleased with life. Fast food outlets McDonalds and Domino's Pizza both pipped forecasts; more surprisingly so did Fiat, Peugot and Volkswagen.
In Ireland Icon reported a sharp rise in earnings and raised its guidance for 2008. Second quarter results for Trinity Biotech were well down on the previous year, but strong revenues helped Elan to halve its Q2 losses.
In M&A British Energy accepted EDF's offer, Roche offered to buy Genentech and there was talk of JP Morgan looking for a consortium to break up HBOS.
FX
The Dollar rallied against most currencies over the week. Traders reckoned this was mostly down to the collapse in oil prices, but hawkish comments from the Fed's Prosser helped fan the flames. The weaker Euro reflected numbers confirming the deterioration in business confidence across the Eurozone. The Euro fell to EUR / USD $1.570 and EUR / GBP £0.789. Sterling was tossed around in the middle and ended the week at $1.989.
Commodities
There was little enthusiasm for the start-of-the-week rally in oil, and prices collapsed as the week progressed. Noticeably there was no lasting reaction to either geo-political concerns or worries over the lack of supplies. Crude oil is now 16% off the record highs of 2 weeks ago; Brent Crude finished the week at $124.52, down $6. Gold also failed to hold early gains and plummeted nearly $60 in two days. Traders cut positions as gold slipped below support, leaving the shiny metal down $36 at $921.65.
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'Online Trading Market News' by paddypowertrader.com, updated 25-Aug-08
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Online Trading News, updated 01-Sep-08
With no significant developments in the financial crisis, last week saw very light trading volumes. Movement was largely determined by the unexpected positive economic releases from the US. Durable goods orders (1.3% Actual versus 0.1% Expected) suggested that...read article. Online Trading Market News, updated 25-Aug-08
A weekly round up of the markets...read article. Spread Betting Markets w/c 21 Jul, updated 21-Jul-08
Spread Betting Markets: A whle bevy of US companies beat pessimistic analysts forecasts, including Citigroup, Intel, JP Morgan, Johnson and Johnson...read article. Spread Betting Markets w/c 14 Jul, updated 14-Jul-08
Spread Betting Markets: There were pockets of good news though. Tullow Oil expect substantially higher first-half profits, Associated British Foods (owners of Primark and Pennys) showed a 24% rise in...read article. Spread Betting Markets w/c 7 Jul, updated 07-Jul-08
Spread Betting Markets: The nightmare on Wall Street continued as the Dow officially became a bear market, defined as a fall of 20% from the peak. The FTSE 100 has so far survived official recognition with a fall of only 19.6%, but both the FTSE 250 and Smaller Companies indexes are now 20% below year-end levels. Inflation fears sent...read article. Spread Betting Markets w/c 30 Jun, updated 30-Jun-08
Spread Betting Markets: The Euro strengthened to EUR / USD $1.5760, but ended the week barely changed against Sterling at £0.791. The Yen dropped to a record low against the Euro at ¥169.45 on talk that Japanese investors were increasing...read article. Spread Betting Markets w/c 23 Jun, updated 23-Jun-08
Spread Betting Markets: After producing better than expected earnings Goldman Sachs turned on the market with a forecast that US banks may need to raise a further $65 billion of...read article. Spread Betting Markets w/c 16 Jun, updated 16-Jun-08
Spread Betting Markets: Barratt Development plunged 38% over the week on fears that failure to renegotiate bank financing would lead to a debt for equity swap. There was no pleasing shareholders in Carphone Warehouse; investors ignored the rise in profits and 31% dividend increase and sold the shares down 12% on the companys cautious outlook. British Energy rebuffed an...read article. Spread Betting Markets w/c 9 Jun, updated 09-Jun-08
Spread Betting Markets: In the UK, the retail picture was also mixed. Supermarket WM Morrison reported food sales up 7% in the first quarter. However Kingfisher, operator of DIY chain B&Q, painted a gloomier picture. Their Q1 like-for-like results were...read article. Spread Betting Markets w/c 2 Jun, updated 02-Jun-08
Spread Betting Markets: Crude oil fell $7 in two days at the start of the week. An attempted rally on Wednesday petered out at $131 and the price dropped to $125. The fall was blamed on...read article. Spread Betting Markets w/c 26 May, updated 26-May-08
Spread Betting Markets: On Monday the Aussie Dollar rose to a 24-year high against the US Dollar; the Aussie was boosted by strong commodity prices and news that the central bank had discussed...read article. Spread Betting Markets w/c 19 May, updated 19-May-08
Spread Betting Markets: Oil pushed ahead to another new high of $127.82. This was mainly on fears that China would step up demand for fuel after the earthquake damaged several hydro-electric power plants. Late on Friday the price fell back on news that the Saudis would...read article. Spread Betting Markets w/c 12 May, updated 12-May-08
Spread Betting Markets: Oil set new record highs each day last week. A warning from Goldman Sachs that oil could hit $200 resulted in heavy buying of options to purchase oil at that level in December 2008. OPEC did not help matters, blaming speculators, rather than a lack of supply, for...read article. Spread Betting Markets w/c 5 May, updated 05-May-08
Spread Betting Markets: The slide in the Euro gathered momentum, partly due to demand for the Dollar. The Euro ended the week at EUR USD $1.5410 and EUR GBP £0.7800. Sterling weakened marginally against the Dollar to...read article. Spread Betting Markets w/c 28 Apr, updated 28-Apr-08
Spread Betting Markets: RBS announced its well-leaked £12 billion rights issue and in response Barclays stated that it had other options available and Bradford and Bingley said that their funding would last into...read article. Spread Betting Markets w/c 21 Apr, updated 21-Apr-08
Spread Betting Markets: Crude Oil hit new record highs on a daily basis, touching $117 on Friday. At first prices rose in reaction to the falling Dollar. But although the Dollar recovered towards the end of the week Crude Oil continued to rise on supply worries. US refineries are operating at their lowest levels since...read article. Spread Betting Markets w/c 14 Apr, updated 14-Apr-08
Spread Betting Markets: The Euro rose to record highs against Sterling and the Dollar. Although interest rate moves were as expected, the economic slowdown in the US and UK continued to worsen more than in Germany and France. Comments from the European Central Bank prompted speculation of future central bank intervention in the forex markets. The Euro ended the week at...read article. Spread Betting Markets w/c 7 Apr, updated 07-Apr-08
Spread Betting Markets: Oil prices continued higher after an Exxon Mobil refinery caught fire. There were also worries about petrol supplies ahead of the summer months when most Americans jump in their hummers to drive to another part of America. The Driving Season as it is known, is an annual concern to...read article. Spread Betting Markets w/c 31 Mar, updated 31-Mar-08
Spread Betting Markets: Economic data helped to drag US and UK indices lower. The Dow ended the week 1.2% down, the S&P ended 1.1% down and even Techs lost their gloss with the Nasdaq gaining just 0.1%. The FTSE 100 closed 3.6% up and while the Nikkei 2.7% gain was made to look paltry next to Hong Kongs Hang Seng which closed 10.3% up...read article. Spread Betting Markets w/c 24 Mar, updated 24-Mar-08
Spread Betting Markets: The Dollar fell to new lows at the start of the week, but rallied on Thursday. This was largely due to a sell-off in commodities, which have an inverse relationship to the Dollar. The Dollar ended the week at $1.542 to the Euro and $1.9820 against Sterling. Against the Yen the Dollar recovered from Mondays 12-year low of...read article. Spread Betting Markets w/c 17 Mar, updated 17-Mar-08
Spread Betting Markets: The week that Gold smashed through the $1,000 barrier. The continuing collapse of the Dollar, together with contrasting fears of both higher inflation and collapsing asset prices, saw investors scrambling for safety. Both oil and gold benefited from their 'safe haven status'. Gold ended up $24 on the week at $999.75, having previously hit $1007; Brent Crude climbed...read article. Spread Betting Markets w/c 10 Mar, updated 17-Mar-08
Spread Betting Markets: Following predictions that US rates could fall below 2% this year the Dollar fell to $1.5340 and $2.0140 against the Euro and Sterling respectively. The Euro also reached a new high against Sterling, though profit taking saw it end the week at £0.7620. Risk aversion trades helped the Yen to an 8-year high of ¥101.44 against...read article. Spread Betting Markets w/c 3 Mar, updated 03-Mar-08
Spread Betting Markets: The growing conviction that European interest rates would, at best, remain unchanged whilst US rates would continue to fall boosted the Euro. Traders piled in, pushing the Euro to record highs of $1.5238 and £0.7678 against the Dollar and Sterling respectively. Sterling also gained ground against the Dollar, rising to...read article. Spread Betting Markets w/c 25 Feb, updated 25-Feb-08
Spread Betting Markets: Commodities fired back into life with Crude oil repeatedly breaching the $100 mark and gold hitting a new high of $953.60. Brent Crude finished the week up $2.5 at $97 and gold rose $35 to end at $943.65. These moves were partly a reaction to higher US inflation, but also due to an increased flow of...read article. Spread Betting Markets w/c 18 Feb, updated 18-Feb-08
Spread Betting Markets: The week ended with the FTSE 100, Dow and S&P 500 all falling by over 4%, but the Dax and Nikkei faring slightly better at -2.9% and -3.6%....read article. Spread Betting Markets w/c 11 Feb, updated 11-Feb-08
Spread Betting Markets: The Dollar fell against most currencies on strong hints of further rate cuts next month. The EUR - USD rate rose to $1.4670 and GBP - USD rose but then fell to $1.9580. Sterling was boosted by suggestions that interest rates would not fall as...read article. Spread Betting Markets w/c 4 Feb, updated 04-Feb-08
Spread Betting Markets: Microsoft stole the headlines with its $45 billion bid for Yahoo. Further sub-prime write-downs saw a record loss for UBS and a $2.3 billion loss for bond insurer MBIA. Friends Providents strategic review produced writedowns, a cut in dividend and the proposed sale of the holding in...read article. Spread Betting Markets w/c 28 Jan, updated 28-Jan-08
Spread Betting Markets: After falling, somewhat surprisingly, at the start of the week Gold prices rose to a new record high of $923.4. Small profit taking left it $30 up on the week at $912.5. Brent Crude Oil improved $1...read article. Spread Betting Markets w/c 21 Jan, updated 21-Jan-08
Spread Betting Markets: US banks took the headlines again with Citigroup, Merrill Lynch and Wells Fargo recording losses of mind boggling size, accompanied by a mixture of dividend cuts and announcements of overseas funding. The gloom was widespread with investors ignoring IBM...read article. Spread Betting Markets w/c 14 Jan, updated 14-Jan-08
Spread Betting Markets: Despite no change in UK rates, Sterling fell to a record low against the Euro, finishing at £0.7550, and hit $1.958. The Euro was little changed against the Dollar, ending the week at $1.4790. Gold was the major beneficiary of the weeks moves as risk averse investors switched...read article. Spread Betting Markets w/c 7 Jan, updated 07-Jan-08
Spread Betting Markets: Inspired by plenty of M and A talk, equities started the week in good form with FTSE trading breaking above 6500. However, the US in particular was unsettled by talk of further sub-prime write-downs as the week progressed. Confidence in shares suffered another blow when US data suggested that the manufacturing sector was no longer growing, and the weak payrolls figures on Friday proved...read article. Spread Betting Markets w/c 31 Dec, updated 31-Dec-07
Spread Betting Markets: The Euro was the main beneficiary of weak economic numbers from both the US and UK. It finished at a record close against Sterling of £0.7380 and the EUR USD trading returned to above $1.47. Sterling hit a one and a half year low against...read article. Spread Betting Markets w/c 17 Dec, updated 17-Dec-07
Spread Betting Markets: Oil rose by 3.5% as inventory levels fell, with Brent Crude finishing at $92.67 and by contrast, and despite repeated attempts, gold failed to hold above $800 and ended the week down $7 at $790 but unexpectedly high inflation numbers and unwinding of short...read article. Spread Betting Markets w/c 10 Dec, updated 10-Dec-07
Spread Betting Markets: Last week, investors shook off worries over falling house prices, weaker economic growth and rising money market rates to pile into equities in anticipation of lower official interest rates.The Bank of England duly...read article. Spread Betting Markets w/c 3 Dec, updated 04-Dec-07
Spread Betting Markets: Despite increasing hopes of a rate cut the Dollar rose in value against both the Euro and Sterling, ending the week at $1.4630 and $2.0580 respectively. A greater appetite for risk saw the Yen weaken on switching into higher-yielding currencies, falling to Y111.18 against the Dollar...read article. Spread Betting Markets w/c 26 Nov, updated 26-Nov-07
Spread Betting Markets: The small change on the week gave a false impression of the stomach churning 300-point move in FTSE and nearly 500-point move in the Dow. Low volumes allowed traders to push markets down ahead of Thanksgiving, before a move back up towards the end...read article. Spread Betting Markets w/c 19 Nov, updated 19-Nov-07
Spread Betting Markets: In what appeared to be a tough week for equities, the FTSE was barely changed and US markets were marginally higher. Asia fared worse with Japan down nearly 3% and Hong Kong losing 4%. Despite UK inflation moving back above its target rate, the Bank of England, in its Quarterly Inflation Report, signaled the probability of two 0.25% rate cuts next year. Mervyn King, with eye...read article. Spread Betting Markets w/c 12 Nov, updated 12-Nov-07
Spread Betting Markets: Across markets the falls ranged from a barely changed Dax -0.5% to the harder hit Asian markets with the Nikkei and Hang Seng falling by 5.5%. The FTSE and S and P 500 fell by around 3.5% with the Dow faring worse at -4.1%...read article. Spread Betting Markets w/c 5 Nov, updated 05-Nov-07
Spread Betting Markets: Once again the week ended with record highs in oil, gold and EUR/USD as sub-prime jitters returned to take the gloss off the equity markets. The US Federal Reserve delivered the expected 0.25% cut in interest rates to 4.5%, but ruined the party by saying they attached equal weight to...read article. Spread Betting Markets w/c 29 Oct, updated 29-Oct-07
Spread Betting Markets: In Europe, France Telecom, Pearson, Home Retail, BP and Shell all beat estimates. In the US, American Express, Apple, Dupont, Microsoft, Motorola and UPS all gave favourable reports. Figures from Amazon, Electrolux, Glaxo and...read article. Spread Betting Markets w/c 22 Oct, updated 22-Oct-07
Spread Betting Markets: America was worst hit, with the Dow ?4.1%, S and P ?3.9%, but other markets fared little better with FTSE and Nikkei ?3.0% and the Dax...read article. Spread Betting Markets w/c 15 Oct, updated 15-Oct-07
Spread Betting Markets: Risk appetite returned to the markets with equities reaching new highs and higher yielding currencies benefiting from a return to the carry trade. Minutes from the last US Federal Reserve meeting showed that...read article.
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