Spread Betting on the Retail Sector
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Spread Betting on the Retail Sector

Spread Betting on the Retail Sector


Trading Features / Strategies from Simon Denham of Capital Spreads.

There is finally a sense of spring in the air from shell shocked investors as the feeling continues to permeate through that the worst is possibly over. Strange as it might sound, from the view point of the stock exchange, this is not as weird a proposition as you might think.

Whilst the actual effects of all of the problems, that have reared their head over the past eight months, have yet to be felt, professional investors spend their time trying to see a year ahead. It is not much point waiting for absolute confirmation of a change in the financial landscape as by then the stock market would have already rallied/fallen in anticipation of the event and you would be buying/selling at the top/bottom of the cycle.


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That having been said there is still quite a bit of ‘faith’ involved in buying just at the moment. The consumer, that fabled beast whom nobody considers themselves (personally) to be, has yet to seriously pull in his horns. Yes, times are not so great on the high street but we still have effectively full employment with, aside from some city workers, no real expectation of massive layoffs. I think that ‘the high street’ should get real about what is really a tough trading environment. It is certainly not the current mild contraction in growth. If the perception, and actuality, take hold that it is not just future wealth (pensions) that has gone up in smoke over the past ten years but that current earnings might also be for the chop then stores will really get a lesson about what ‘tough trading conditions’ actually means. There has not been a serious tightening of the purse strings since the early nineties and we may be n the verge of the next.

Yesterday saw both the The Bank of England and ECB hold steady on rates. Whilst I was slightly surprised (short for ‘got it wrong’), if you turn your head sideways and squint through the bottom of a dirty glass you can just about see their point of view. When the inflationary surge was just one off currency or commodity impulses then holding rates high made no sense but now, we are reliably informed, the effects are beginning to filter through into general inflationary and wage expectations. A period of hair shirt discomfort may be needed. But I still worry about the UK attempting to put the brakes on just as growth is slowing anyway and as the rest of the globe (aside from the US) continues to roar away.

Mind you, on a personal level, as I am looking to buy a property in the near future so a bit of housing weakness would not be unwelcome!





The above comments do not constitute investment advice and neither Capital Spreads nor Clean Financial accept any responsibility for any use that may be made of them.


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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.

Article provided / approved by Capital Spreads which is a trading name of London Capital Group Ltd which is authorised and regulated by the Financial Services Authority (FSA), FSA Register number 182110.

'Spread Betting on the Retail Sector' edited by SD, updated 09-May-08



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Risk Warning: Spread betting and CFD trading carry a high level of risk to your capital and you may lose more than your initial investment. Spread betting and CFD trading 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.

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