Spread Betting Trading Online
|
|
 |
A regular spread trading update by Simon Denham of Capital Spreads.
For the latest spread trading update from Simon Denham click here.
Spread Trading, 21 Dec 07
At the risk of being crude, it's "whore's draws" time again with the market rebounding spectacularly from the lows of Tuesday and Wednesday as the markets indulge in a spot of window dressing for the year end. Punters can be forgiven for wondering what is going on at the moment as yesterday's news was not exactly wonderful.
After, in Labour's words, "the longest period of growth in living memory" the UK is effectively bankrupt. Whilst the great and the good urge prudence from the populous they rather weaken their position by indulging in one of the greatest spending spree's in the history of Britain. Growth periods are supposed to be a time of stocking up the coffers in preparation for tough times ahead. If the UK actually slows down Chancellor Darling is going to be rather surprised at what he has left in the vaults to try to get the economy moving again. The borrowing requirement / trade deficit / personal debt levels have all hit all time highs just as the vultures of recession seem to be circling.
The FTSE 100 spread is looking to open about 60 points up this morning as dealers look to the rally in the States last night and the Far East this morning. Yield valuations do certainly look tempting and the recent weakness in the pound will make margins appear even better (some 70% of FTSE 100 income comes from abroad). Punters will be looking for companies with high dollar and euro receipts in anticipation of a fillip in currency profits.
Funnily enough not a single company seems to be scheduled for an announcement today but there is a certain amount of data from the various state number crunchers across the globe. Retail Sales in the UK at 09.30 will be eyed with trepidation as recent speculation is that this Christmas is not turning out to be too good for retailers. Forgive me for being cynical but I have heard the same story every year since the turn of the millennium. The High Street seems to rival the famous Farming fraternity in their ability to sound hard done by…as the tills fill up.
In the US we have the University of Michigan confidence release at 15.00 which is taken as quite an important number over the pond.
Currency markets are reversing some of yesterdays move as the pound bounces back some 50 pips versus the greenback and the Euro does even better, rallying 80 pips to recover the 1.44 level. If the euro holds onto the gains it will be the first up day in seven and the charts are definitely beginning to look like a potential top (head and shoulders) formation may have been created. If this is confirmed the cross could be looking at a return below 1.35, which is why so many analysts have been cautioning on the weak dollar story.
The GBP / USD spread is $1.9884-$1.9887 up 50 pips this morning but the pound has still managed to weaken once more against the Euro and is at around the all time lows versus the Euro block ersatz currency. Sterling has now fallen almost 10% from the highs of January against a currency that we are supposed to be quite stable against. The entire trading range for the previous three years was only 6%. The problem with this type of weakness is that it can quickly get out of control as the 'hot' money deserts the sinking ship. In hindsight, of course, we should all have been wary when we read earlier this year that many central banks were starting to buy pounds as an alternative to their US dollar reserves. When do Central Bankers ever get it right? Support in Cable is at $1.9800 and is unlikely to be tested today in light of the rebound this morning. Punters are long and looking to see if we break above the $1.9920 level.
Gold remains stuck at $800 having attempted to move lower yesterday on the dollar strength. Today the greenback weakness has given the bulls another reason to buy and so the $791 (big support) wins out once more.
Financial Spreads » "With FinancialSpreads.com you get all the normal
advantages of Spread Betting plus..." » read Financial Spreads review.
|
Spread Trading, 20 Dec 07
The FTSE 100 is being called 10 points higher but things will almost certainly change the moment we open up. There were no surprises from the Bank of Japan who kept interest rates on hold at 0.50% and rates there are expected to remain at this level until the back end of next year. Things remain unsettled for investors and as volume is expected to fall as we approach the weekend, there could be a flurry of activity ahead of the futures and options expiry tomorrow. NB that the last time you can trade US December contracts is tonight. Punters remain long of the indices looking for a rebound from recent falls. However, as we approach the Christmas week, the trading ranges seem to be tightening up (finally).
The 9-0 result of the BoE's decision to cut rates by 0.25% earlier this month signalled further rate cuts can be expected in the New Year. This didn't have the expected effect on equities which would usually find some support from such a result. Having said that, this is the first time that the MPC has voted unanimously since the September 11 terrorist attacks on the US.
On the equity front, Bovis has been cut by Citigroup from ‘Buy’ to ‘Sell’. Citi also dropped their target price for BT from 330p to 300p. Pub stocks may also be active as the dire news-flow continues for them. JP Morgan cut Enterprise Inns from ‘overweight’ to ‘neutral’ and Mitchells & Butlers from ‘overweight’ to ‘underweight’.
As suggested in yesterday’s comment (when we were up at 2.0200) the temptation for the latest move in GBP / USD to make an attack on the $2 level before the year end became too much. The constant flow of poor economic news coupled with the Bank of England easing stance on rates has put the skids under the pound. The current price is now at $1.9905-$1.9908 down another 70 pips this morning and there is an ominous feeling that the selling may have only just begun. With many analysts calling for a readjustment back down to the 1.75 region. The fall in the pound will be putting even greater strains on energy prices as the ‘weak’ dollar did at least temper oil price hikes to some extent. Even though Oil is off its highs in dollar terms, against sterling it is back up pressing on the top of the range.
Suddenly all I am hearing on the news channels are dollar bulls. It seems only a few weeks ago that the bears were calling for much further weakness. However the recent, and lets be honest, quite modest bull reversal has brought out the greenbacks supporters. The argument about the twin US trade and budget deficits were always slightly difficult to agree to as the tax rate in the States is modest by international standards. So if the Budget deficit became too much of a problem a small hike in Government slice would solve much of it. The same cannot be said about the European and Japanese budget deficits which are much more structural in nature.
UK GDP figures are released at 9.30am today with the final estimate for Q3 expected to remain unchanged at 0.7%. The income side of accounts is expected to show a continued decline in disposable income. However spending still remains strong meaning the savings ratio is likely to remain below the historical average. US GDP is also released at 13h30 London time and not due to change from 4.9%. Later on today the Phili Fed is forecast to post a decline from 8.2 to 7.0 with a possible lower figure as the ISM manufacturing data has been weaker recently.
Gold remains around the $800 level as trading in the precious metals also slows up in line with other markets. The gold spread this morning is $800.0-$800.5 down a buck but in very light business. Other precious metals are also slightly lower this morning.
Crude Oil was up a dollar yesterday and added slightly to that this morning. However February Brent Crude remains in the low $90’s where we have been for a while now.
Spread Trading, 19 Dec 07
After an initial positive open the FTSE is dipping. This move and the recent declines just go to show how nervous investors are right now and it looks like there is going to have to be a big shift in sentiment to push the market higher in the run up to Friday's futures expiry and the year end. The news that Northern Rock has received a further £60bn and that the Treasury has extended its guarantee to creditors of the bank has not done any good for its credit rating. The credit rating agency Moody's has downgraded its financial strength rating to E+, making it effectively impossible for them to borrow from anyone else other than the Bank of England. Early equity news movers include WH Smith who received an upgrade from UBS to “Buy” from “Neutral” and BP who have been downgraded by JP Morgan from “Overweight” to “Neutral”. An important support level on the downside for the FTSE is 6185 so a move below this could open the way for a retracement below 6000.
At the time of writing Capital Spreads are calling Wall Street to open just a little below where it closed last night at 13222 (10 points lower).
Yesterday's inflation data was welcomed as it came in line with market expectations but concerns still remain over the outlook, particularly as food prices have rocketed for producers and there'll be growing pressure on them to pass these prices onto consumers.
Focus today will be on the German Ifo business climate release at 9.00am London time. It is forecast to decline from 104.2 to 104.0 following a surprising rise in November. After that, at 9.30am, the Bank of England releases its minutes from its last meeting where it cut the base rate by 0.25%. These are likely to reveal that there was plenty of debate over the poor outlook for growth and for inflation, but with their main concerns being about the credit market. No doubt there would have been a split decision, but by how much the market will be interested to see in order to second guess when the next cut might come.
Platinum prices sit just below their record price and so gold benefited from a bullish move yesterday and overnight. With global growth driven by China and India still on the up, bulls of precious metals remain positive that higher prices can be achieved. They believe the demand for platinum in particular will only increase. $850 in gold remains a big target for bulls. However it seems just as the elusive $100 mark for crude oil. It’s clearly a big psychological level. US oil inventories are released at 15h30 London time today.
Spread Trading, 18 Dec 07
It seems that nothing will turn the markets round just at the moment and oddly enough the prevailing mood appears worse than when we were down at 5800 back in August. The news flow is relentlessly bad (or maybe that is just the way I am reading it). My discussion with an analyst, of whom I normally take note, concerning the good value of banking stock at current levels was less than encouraging. Stating that he wouldn't touch them until yields hit 10%, at least, which prompted me to put my hands back in my pockets.
There seems to be a debate raging about whether the Bank of England should have cut rates as 'economists' warn of inflation just around the corner. UK base rates are one of my pet conspiracy theories in that they seem to be set by old people with no mortgages and (presumably) lots of money in the bank. So the higher the better! I have yet to have someone explain to me how externally driven inflation pressure can be influenced by the interest rate set in Britain. At the moment there is Oil (energy) inflation and Food (crop) inflation both of which have virtually nothing to do with the UK....setting high interest rates in the UK just means that what little industry we have left is snuffed out under the weight of increased lending costs and the subsequent artificial strength in Sterling. So what if house prices go up? Mortgages are long term purchases made in the light of 'saving' rather than 'spending'. I always laugh when people show me that the saving rate in the UK is at an all time low...err what do they call a house purchase if not a purchase of an asset (rather like a pension fund or buying a share or bunging the money in the bank). And not only this but the higher interest rates are then the higher wage demands are to keep ahead of debt repayment. Lest it be forgotten, rates at the moment are 5.5% against inflation of just 2.1%, making your return on money in the bank 3.4% (or 161%!) higher than the decay in value.
Today sees no real corporate news but we do have the UK inflation numbers (CPI and PPI) out at 9.30 and from the States the Housing Permits and Housing Starts (which should make interesting reading) at 13.30.
The FTSE 100 spread is coming in around 10 lower at 6263-6264 as the Far East managed to hold fast and the US has recovered somewhat from last nights late drop. We are seeing strong buying interest on the pre market prices and dealers will be hoping for some bounce from yesterdays 100 plus fall.
The currency markets are pretty choppy still with the dollar continuing to hang onto recent gains. Cable is struggling to get back above 2.02 having recovered the level yesterday and given it up this morning. There are a lot of long term sterling bears out there and it is difficult to argue with them on fundamentals. Punters are reversing positions on a moment by moment basis as quick profits appear to be the order of the day.
As mentioned yesterday the 'weak' dollar is having a bit of an Indian summer and truth be told is looking quite comfortable at these levels (famous last words). The slow drip drip rally of the greenback of gradually grinding out the weak bears and we are now seeing a good chance of a further spike higher as the last dollar sellers get bashed out of positions.
Gold is still sitting on the support level at $791. If we do not get a rally soon the probability that traders will have a look at what might happen if we force the price below $788 will increase. The yellow metal is being attacked on two fronts. The dollar strength and the cost of short term funds. Recent Longs are sitting on losses and they are costing quite a bit to hold.
Brent Crude Oil (Feb) is stuck around the low $90s and as mentioned yesterday we are stuck in the horns of dilemma. There appears to be tons of the stuff in the system which could quickly push prices down to the $60...or the political or environmental situation could deteriorate swiftly which could see a spike to the el dorado of $100. The current Oil spread is $91.79-$91.84 up $0.35 this morning but nothing dramatic.
Financial Spreads » "With FinancialSpreads.com you get all the normal
advantages of Spread Betting plus..." » read Financial Spreads review.
|
Spread Trading, 17 Dec 07
Not a good start to the week.
Markets looked reasonably stable when we left for the weekend at fiveish or Friday only for the Americans to decide that holding positions over Saturday and Sunday was not for them. The weekend press and the Far East have added to the bearish feel and the FTSE 100 spread is looking to come in at around 6309-6310 about 85 points lower (errrr...a bit of a finger in the air that one). The chance of another 100 plus day are pretty strong.
The S&P ended 20 points down and is called another 5 off this morning and the Nikkei dropped 260 shadowing a big 900 plus point fall on the Hang Seng.
Aside from the John Lewis partnership, the run up to Christmas appears quite grim for retailers as shoppers stay away in greater numbers. I made a personal pilgrimage to the west end last week (her indoors wanted something suitably overpriced) and was surprised at how depopulated the whole place was.
Readers of this column would have been surprised at how long it has taken the newspapers to start talking about the constraints on bank lending from, not just the Credit Crunch, but from the fall in their own share prices. Banks have been scrabbling around the world searching for cash injections as there are strict rules concerning lending limits. One of the units in the calculation is the actual capital value of the bank itself. If the shares have dropped 40% this creates a mismatch which must be plugged and without fresh capital they will be severely restricted on next years lending.
This morning looks like being a bad start for the financial sector and, as is the nature of things, the stronger predators will seek out the weaker ones. The chances of lies and rumour picking out the next Northern Rock have increased significantly in recent days. Whilst everyone may poo poo that XYC bank is in trouble they will also be quick to remove funds as the feeling goes round "well I, personally, believe they are fine of course BUT they can go on being fine without my money".
The stream of data continues today with the one that used to be the Daddy when I was a 'bright' young trader, the US Current Account (deficit). With the dollar still showing signs of weakness this is a figure that will strike fear into the currency markets as it can frequently bolster one side or the other in the never ending battle for supremacy. Cable is recovering a bit from Fridays sell off but bulls are hard to come by just at the moment and the odds must now be shortening on a fall below the $2 mark before Christmas. Normally by this time of the year the markets have started to slowdown. However this year the volatility just keeps on going.
The dollar has now recovered quite some ground versus all the majors with the euro cross now down at 1.4425-1.4427, more than 5 cents from Novemeber's high, against the Yen at 112.97-112.99, 5.5 cents higher and the Sterling / Dollar spread 2.0187-2.0190 almost 10 cents to the good. Whilst this is by no means the end to the dollar bear scenario it does go to show that you should not take any move as read.
Gold is clinging onto the support mentioned over the past few messages at $791 with the dollar rally having caught a few bulls the wrong way round. Our Capital Spreads accounts remain long but in times past have been buyers into falls. This time the acquisition on weakness seems to be less than enthusiastic but has not yet actually fallen into outright bear mode. The possibility of an end to the current bull phase is getting stronger and the charts are now showing signs of a more neutral outlook. Of course the cost of Gold longs is now so high that, without the certainty of further price gains, there is a chance of sellers taking the reins.
Crude Oil is managing to cling on above $90 in the face of continued assurances that we have enough of the black stuff sloshing around. The problem at the moment is that we have prices at these highs when everything seems quite relaxed across the globe. I am no great believer in the $100 plus story but it would only take a seriously cold winter or some political conflict for the bulls to get a head of steam once more. It’s difficult to call which way it will go. The bear argument would have us down at $60 and the bull up at $110. Probably why we cannot move at all at the moment!
Spread Trading, 14 Dec 07
A 200 point fall on not very much info has raised a few eyebrows.
The Dow Jones and S&P 500 actually managed to close up on the day right at the death which means that this morning the FTSE is being called 50 points higher! Clients made hay yesterday on the big fall and then turned right round and went long so there should be a few champagne corks popping around the place this morning. With a FTSE 100 spread of 6417-6418 (our early morning guesstimate) the market is still below some important levels at around 6430 and 6460 but conversely is still holding the short term recovery pattern from the lows a month ago.
In all the fury of the current markets it is getting difficult to separate facts from all the noise. Are we entering a recession? Is this just a banking problem? Is the dollar in terminal decline? Will my daughter ever manage to say the word 'duck' correctly? All difficult questions to answer. With no corporate news of note today it is difficult to get excited for the early morning action. This afternoon however sees another raft of US data to worry about. This time in the guise of CPI (13.30) Capacity Utilisation (14.15) and Industrial Production (also 14.15). Why can't they bung them out at the same time? The important one may be the industrial production number because at the moment this is the one bright spot in the US economy. If this starts to weaken then (on top of the housing and banking problems) analysts will start to sharpen their downgrading pencils.
On the currency markets there is very little to comment on. Aside from the fact that the yen appears to be suffering at the moment and the Dollar is not succumbing as it was supposed to do dealers are trying to trade the ranges. GBP/JPY has been bounded by quite a narrow (for this cross) range over the past month with 230.00 being the high and 224.00 the low (there was one small exception). We are now back up at the highs with 229.14-229.22 attracting quite a bit of selling from punters. A break above 230 will probably get short covering going.
The Cable spread remains stuck around the $2.04 level with first the bulls then the bears seemingly having the upper hand only for either the slaughter house or the hunters to respectively kill them off. At $2.0399-$2.0402 we can see short term support at $2.0370 and resistance at $2.0445. Inside here it is difficult to get excited.
A few weeks ago we were pondering the death of the greenback as the USD / JPY spread betting cross headed inexorably towards 100. Since then the Fed cutting rates / adding liquidity worrying about growth have all had the opposite to expect effect. The cross has now bounced back to 112.38-112.40 from the low at around 107.25 and, truth be told, is looking quite comfortable.
Gold bounced neatly off the support level mentioned yesterday at $791 and is now back above $800 having had something of a fainting fit in afternoon action yesterday. Bulls were caught out by the fall and we saw some long cuts going on rather than the normal buying on weakness. Is this a sign that the weak money has been driven out over the past weeks action and we can therefore begin the move higher again? Or, given that our Financial Spreads Accounts have consistently called the gold market correctly this year, is this a potential end to the current bull cycle?
Spread Trading, 13 Dec 07
What a palaver!
FTSE opens 110 points lower proceeds to rally to 70 points up, then falls to trade lower again before finally closing 20 higher. And this morning? Ha! Last night we were quoting the FTSE to open at around 6540 almost unchanged on the four thirty close. And so where do we actually come in? Down at 6475 another 70 point shift.
As mentioned many times over the past few months the most sensible thing that a trader can do these days is put on the old tin hat and hunker down in the trenches positively willing themselves to do nothing. The problem is that in such massively volatile conditions the opportunity and temptation to try to make big profits on an almost daily basis is proving too strong for many punters.
The action of the Fed yesterday (in conjunction with other central banks) to add almost $100bn in liquidity is very difficult to follow. That is $100,000,000,000, just in case the word billion becomes too jaded through over use. Are things really that bad in the financial sector? If so, should we not be rather more worried that the rest of the economy seems to be gleefully ignoring the situation? My credit card limit was increased (without me asking), hardly the action of a banking sector worried about liquidity. Northern Rock continues to offer mortgages, as do other financial institutions, companies continue to borrow money, albeit at slightly worse terms and personal debt levels continue to rise. There seems to be a dislocation between the continued availability of credit on a personal and corporate level. At the same time the banks themselves seem to be struggling to find pennies behind the cushions of the fiscal sofa.
Anyway this morning, as mentioned, we see the markets lower once more with the FTSE spread at 6490-6491. Looking around these levels there seems to be strong resistance to moves above 6560 with the market trading above this level on each of the past five days only for the closing levels to come in lower. Conversely there is also strong buying on any dips with moves down being swiftly reversed. A close below 6440 and more importantly 6400 may trigger more bear targets but (at the moment) the probability is greater for an attempt at the higher resistance level of 6560.
This afternoon sees the release of the US retail sales and PPI numbers at 13.30 and these could trigger some interesting times once more. I have commented in the past that it would be nice if the financial markets could just regain some composure and give dealers a break from the daily manic trading conditions. The general slowdown over the second half of December should soon be upon us and the hope will be that with the lower investor interest levels should lower trading ranges. I think I said the same prayer for the month of November and the first few weeks of this month!
On the FX markets the pound is giving up yesterday’s gains in early trade with cable down at $2.0414-2.0417 on not much information. The pound dollar cross, whilst undoubtedly on a downward trend since early November, is still very much capable of short sharp bursts higher, especially as traders try to undermine central bank intentions. The failure, yesterday, for the cross to get back above the short term bull trendline at $2.0560 has given the bears the chance to send us down. Their target will be the $2.0220 support area which is also the big two year long bull support level. A break and close below this line would undoubtedly be taken, by many traders, as a signal that the bull run has finally ended. While we remain above it we are still in a bull scenario so the Financial Spreads buyers are still reasonably comfortable.
Gold had another good day, yawn, which will probably turn into a bad day today... or whatever. The market is slowly turning bullish again having looked a bit peaky recently with a series of higher lows in recent days. There is now very good support below $800 at $788 to $792 and Capital Spreads clients will be hoping that a platform is being prepared for renewed attack on the highs. Today is almost unchanged on yesterday and so far the trading range has seemed very contained.
Financial Spreads » "With FinancialSpreads.com you get all the normal
advantages of Spread Betting plus..." » read Financial Spreads review.
|
Spread Trading, 12 Dec 07
The expected 1/4 point cut in the Fed was obviously not what was hoped for by traders as the Dow proceeded to dump 300 points having been up about 30 before the decision. Only a small minority admitted (before the announcement) that they were expecting a full half point but quite evidently that opinion had not filtered down to the dealing floor.
Capital Spreads clients made hay in the sun as they went into the Fed announcement heavily short of both the US and the European markets. This morning they will be sitting on some nice little profits if the FTSE opens as expected some 50 to 60 points off from the close yesterday. This is actually rather better than the quote we were making at 9pm last night where the expectation was for the index to come in close to 100 lower. The failure of the Far East to join in the US lemming-like leap into oblivion has given hope to European investors that this morning will not be the bloodbath expected late yesterday. Early calls are for the FTSE to open at around the 6485 level but this is, to a certain extent, just an educated guess as we could come in some 20 to 30 points either side of this.
The US market rout merely reversed the last three days rally and the Dow has now rallied overnight to the psychological and technical support/resistance level at 13500. A close above here would give the bulls hope that the short term bull run has not been terminally holed but the bears are circling ominously with a whiff of recession and inflation in the breeze. The Chinese inflation numbers at just under 7% were an unwelcome start to proceedings and in truth should have seen the markets fall on this alone. The fact that the US traders waited until after the Fed announcement shows that they still live, to a certain extent, in their world of ignoring virtually everything un-American.
Today sees no major numbers out of corporate UK or out of the various European data providers although the UK job numbers may be viewed. Average earnings will be scrutinised by many in order to see if it will have a knock on effect for interest rate movements next year. With the headline figure having been 4.1% the expectation is for a rise to 4.2%. This is exactly the sort of data the Bank of England will be watching closely for any inflationary pressure.
Gold rejected the $813 level and resistance was sighted at $811. It is a little higher this morning on the back of nervy European indices, but clients remain bullish.
Crude Oil has made its third attempt at getting back above the $90 mark in the last 4 trading sessions but still remains range bound. A range of $86.50 to $90.10. Once broken either side could lead to a sharp move up or down.
Spread Trading, 11 Dec 07
The FTSE ended the day flat yesterday and today we are calling the London market to open 20 points higher around 6585 following another strong session in the US. After the US close last night Texas Instruments raised its Q4 revenue target and as a result the US futures are higher this morning. At the time of writing we are calling Wall Street to open as much as 45 points higher at 13772.
Interest rate expectations are truly driving the markets. At the moment they seem to be showing some resilience in the face of further surprise announcements from major banks of subprime write downs. The 6600 level was rejected rather sharply yesterday and remains a level of focus for technical traders. A move through above here would be an indication that the bulls are in control, which certainly seems to be the case judging by the last week. Financial stocks and house builders are in favour at the moment as investors see them as being direct beneficiaries of lower interest rates and they have suffered from the brunt of the recent selling. Optimism about today's rate decision in the US is dominating momentum in the market as noises about lower rates throughout 2008 fuels the bulls.
The Fed is expected to cut rates by 0.25%, but there is a camp which believes that there's a possibility of a bigger move lower. Such a move would probably lead to a rally higher for equity prices. However people might then worry about why the Fed has made such an aggressive move and growth concerns might creep in and just reverse the indices. All eyes on the data at 19h15 London time and the accompanying statement.
Volatility remains high and could easily continue in this fashion throughout the afternoon and evening today. Great news for day traders but not so good for the nerves of your long term investors who are torn between whether lower interest rates in the future are a good thing for equities or the action is being taken to avoid a recession.
A big move up above the $800 mark from gold last night further fuelled investor expectation of more rate cuts ahead after today. Clients continue to remain long and be attracted by the allure of the precious metal. This morning trade is thin and the price is hovering around $809, a little higher than last night's close. Investec in Australia also remain very bullish saying that they believe global liquidity pressures will push gold another $20 or even $30 higher by the end of the year. Resistance is seen at $811.
After another volatile session for oil yesterday it is higher this morning. Warmer weather conditions in the US and fears of an economic slowdown depressed prices yesterday. Nevertheless Asian traders have seen this as a buying opportunity.
Financial Spreads » "With FinancialSpreads.com you get all the normal
advantages of Spread Betting plus..." » read Financial Spreads review.
|
Spread Trading, 10 Dec 07
The FTSE is being called lower this morning as indices in Asia overnight drifted a little lower. The big story this morning however is UBS announcing a $10 billion writedown of their subprime investments. This could lead to a profit warning for the European bank and the sector will remain volatile despite Lloyds providing an in-line trading statement. The mining sector will also be active this morning after the Telegraph reported that the private equity firm Blackstone is plotting a bid for Rio Tinto. Capital Spreads clients should benefit from this news. They are mostly long of Rio Tinto Spread Betting stock believing that the share price could be subject to a bidding war. Airline stocks have received a little help after an upgrade from neutral to buy.
It's another big week for indices, in particular the US as they have an interest rate decision on Tuesday. Although the markets are pricing in another quarter point cut to 4.25%, there are hopes that there could be a more aggressive move from the Federal Reserve or at least plenty of indication of further rate cuts in the accompanying statement. Inflation data is also released in the UK today and the US on Thursday with economists focusing on output prices. We'll want to see whether manufactures are having to absorb the higher oil prices and eating into their profit margins or whether they are passing the costs to the consumer. Given that demand is weakening it would seem that as it is becoming more difficult to pass on these input rises.
Gold is a little higher this morning, back above the $800 level and recovered from Friday's fall. Traders expect it to remain range bound ahead of the Fed's decision tomorrow. Financial Spreads clients remain bullish in the belief that it won't be long before we make another attempt at the $850 mark, but with physical demand dropping back a little, it may be a while before this happens, if at all.
Oil is continuing its slide following on from Friday's good job number. There is already talk of many of the institutions and hedge funds flattening their exposure to oil ahead of the Christmas holidays and year end.
For the latest spread trading update from Simon Denham click here.
Financial Spreads » "With FinancialSpreads.com you get all the normal
advantages of Spread Betting plus..." » read Financial Spreads review.
|
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.
'Spread Betting Trading Online' by DB, updated 21-Dec-07
For related pages also see:
Weak Banks and a Poorer UK, updated 31-Dec-08
Unfortunately the major problems remain though. Banks continue to struggle to improve their capitalisation. If land and property values continue to fall, if marginal companies continue to...read article: Weak Banks and a Poorer UK.
To Trade or Not To Trade, updated 15-Dec-08
Markets are open on the up this morning with heavy buying towards the end of the US session on Friday and the Far East joining in on the action this morning. The solidity of the markets in the face of poor economic data is giving weight to...read article: To Trade or Not To Trade.
Housing Market v FTSE 100 Performance, updated 12-Dec-08
Today is the last serious trading day of the year as the next two weeks tend to be very, very short on liquidity and occasionally long on volatility. In the UK there is now another variable to be taken into consideration and this is...read article: Housing Market v FTSE 100 Performance.
A Courageous Decision on Market Turmoil, updated 02-Dec-08
Just when you thought it was safe to go back into the water the Dow drops 680 points in a session. The more you watch the various twists and turns of...read article: A Courageous Decision on Market Turmoil.
The Banks and Lending to Business, updated 01-Dec-08
With another 12 months of a, probably, contracting economy, I would look with a pretty jaundiced eye at a small business that required money to survive right at the beginning of the down turn. I might ask 'when times...read article: The Banks and Lending to Business.
The Pre-Budget Report and the FTSE 100, updated 25-Nov-08
The FTSE is called virtually unchanged as traders try to get a handle on Chancellor Darling's stimulus package but the reality is that our markets are...read article: The Pre-Budget Report and the FTSE 100.
VAT Budget Cuts and the UK Economy, updated 24-Nov-08
The madness of an ever greater public sector funded, in an ever increasing proportion, by a booming service sector at the expense of a weakening manufacturing division had been pointed out ad-nauseam by various commentators over the past ten years. The huge tax revenues created by...read article: VAT Budget Cuts and the UK Economy.
High UK Interest Rate Problems, updated 14-Nov-08
The Sterling / Euro spread is now at €1.1649 - €1.1653. That means that against our major trading partner, whose currency has also dropped alarmingly, we are over 20%...read article: High UK Interest Rate Problems.
July Spread Trading Hours, updated 04-Jul-08
July Trading Hours, make sure you don't get caught out with the changes to trading hours on Thursday 3 and Friday 4 July...read article: July Spread Trading Hours.
|
|
Q) Average Trading Results?
A) Get free trading tips, offers, price updates, important news and more!
|
|
