Panic in the Markets as US Retail Sales Inspires 'Flash Crash'

Trading Update

15-Oct-14, 8:33am:

Dollar Rebounds as UK and Eurozone Data Disappoints

The dollar has seen something of a comeback, with EUR/USD and GBP/USD recording losses after weaker UK and European data.

Equity markets have also rebounded slightly after several days of falls but we need US earnings to outperform to help maintain the move.

Update by Craig Inglis, Head of Product Development,

15-Oct-14, 8:35am:

Burberry Expects ‘Single Digit’ Full Year Growth

With the luxury retailer attempting to diversify its global presence and reduce its dependency on East Asia, IG takes a look at its online social strategy and the impact on earnings.

Update by

15-Oct-14, 9:26am:

Jimmy Choo IPO Grey Markets

As with a lot of the more interesting equity IPOs, several spread betting and CFD trading firms are offering a Jimmy Choo grey market so investors can speculate on the company’s value ahead of its actual floatation:

(Note that other brokers may also offer a Jimmy Choo market).

For anyone wanting a quick overview of the luxury shoemaker, see the Wikipedia page for Jimmy Choo Ltd.

How Do You Trade the Jimmy Choo Grey Market?

One of the grey markets on offer is from Financial Spreads and is based on the market capitalisation of Jimmy Choo at the end of the first day of trading.

To clarify, the first day of trading is defined as the first day of unconditional trading, i.e. when Jimmy Choo actually lists on a stock exchange.

The grey market is currently at 635-665, where each point represents £1m.

So this means that Financial Spreads are expecting the Jimmy Choo market cap, at the end of the first day of trading, to be £635-665m.

If you think that the fashion brand will actually be worth more than £665m, then you could buy at 665.

On the other hand, if you think that concerns over demand for luxury goods could see the stock underperform expectations, then you could sell at 635, i.e. speculate that the market cap will be lower than £635m after the first day of trading.

If you decided to buy at 665 for, say, £5 per point and the company closed its first day of trading with a market cap of £700m then you would make a profit of £175, i.e. (700-665) x 5 per point = £175.

However, the firm might slide on the first day, instead closing with a market cap of just £620m. If that were the case, then you would make a £225 loss, i.e. (620-665) x £5 per point = £225.

Where/When Will the IPO Be?

At the time of writing, the specifics of the floatation have not been confirmed.

However, the stock is currently set to be listed on the London Stock Exchange and most spread betting firms are saying that ‘All open trades will be void if there is no floatation by 31 Dec 2015.’

If in doubt, please check with your broker.

Update by Gordon Childs, Editor,

15-Oct-14, 9:30am:

Weak Chinese Inflation Figures Keeps Stocks on the Back Foot

Stock indices are slightly weaker this morning on fears about the global economy ahead of UK and US jobs data and a speech by Mario Draghi.

Update by Mark Priest, Market Analyst,

15-Oct-14, 12:00pm: In an interesting look at the markets, the latest trading video on our blog asks:

Why is This Sell Off Different to Previous Buying Opportunities?

Update by Gordon Childs, Editor,

16-Oct-14, 8:53am:

Dollar Sees Savage Drop after US Retail Sales

Shocking US retail sales data inspired huge falls in the US dollar and global stock markets yesterday, with USD/JPY tumbling towards ¥104.75.

Bond markets are now pricing in expectations of a US rate hike in 2016 rather than 2015, which is also seeing gold surge.

Update by Craig Inglis, Head of Product Development,

16-Oct-14, 9:41am: