Barclays Surges Higher Lifting FTSE 100 Spread Betting Market
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For today's update see Spread Betting Daily.
The Daily Update from Anthony Grech, Research Analyst, IG Index.
Spread Betting 25 August 2011: 10.30am Update
European stocks climbed for a fourth day as investors continued to weigh up whether US Federal Reserve Chairman Ben Bernanke will take action and signal another round of QE tomorrow to help the world’s largest economy.
The FTSE 100 was up this morning, reaching 5254.17 on the back of strength in the mining and banking shares. Barclays soared over 8% to 162p and Kazakhmys jumped over 6% to 1008p by 10am (London time). The broader FTSE 250 gained 1% to reach 10,143.38.
German data disappoints once again
German consumer sentiment fell slightly going into September, a survey showed this morning. The index hit a ten-month low as the Eurozone debt crisis and fears of another recession in Europe and the United States weighed on expectations.
The German report revealed that its consumer sentiment index declined to 5.2 in September from 5.3 in August, in line with expectations.
Yesterday, German data revealed that its business and investor confidence index plummeted this month on concerns that Europe won’t be able to contain its debt crisis and protect its banks from the turmoil.
Glencore shines...
Earlier this week, Glencore announced growth plans to acquire full control of Australian nickel miner Minara, of which it already owns 73%. The deal is the second Glencore has carried out since listing, having offered $475 million for a stake in a copper mine in Peru.
Today saw the release of more encouraging news from the commodities trader, which saw its share price jump. Glencore announced a 50% rise in first-half profit, attributing the growth to rising commodity prices and appealing oil trading conditions in the first months of the year.
Glencore reported adjusted earnings before interest and tax of $3.3 billion, while income before attribution rose 58%, in line with analysts’ expectations.
Glencore further announced that it remained optimistic on global growth. However, the short-term volatility caused by sovereign debt concerns in developed markets remains a huge concern to the company. Glencore’s share price jumped over 6% this morning to 413.90p.
...while gold loses its sparkle
Gold, whose remarkable rally is showing signs of cracking, continued to fall for a third day today. The shiny yellow metal extended its biggest decline in 18 months since February 2010 after the CME raised futures margins for a second time this month, prompting commodities spread betting investors to sell the metal.
Gold December futures dropped 11% this week from its record high of $1917.90 an ounce, however analysts still expect gold to outperform other commodities in the short term, as fears of a double-dip recession in the US and sovereign debt woes in Europe are far from over. Gold for December delivery has reached a low of $1705.4 per ounce today.
US pre-market
US futures were slightly up this morning, pointing to a marginally higher open on Wall Street this afternoon. S&P 500 futures were 0.2% higher at 1174.6, while Dow Jones futures were just 0.12% up at 11,281.00.
This afternoon, investors will likely focus on technology shares after the resignation of Silicon Valley legend Steve Jobs. Shares of Apple tumbled as much as 7% in after-hours trade following Mr Jobs’ resignation as chief executive.
Weekly US jobless figures are due out at 1.30pm (London time), however markets will most likely remain excited ahead of tomorrow’s speech by Mr Bernanke. While many have doubts on whether he will immediately commit to conducting the third round of QE, investors generally expect him to stress that the central bank stands ready to act if necessary.
Remember that financial spread betting is a leveraged product and can result in losses that exceed your initial deposit. Spread betting may not be suitable for everyone, so please ensure that you fully understand the risks involved.
The above comments do not constitute investment advice and neither IG Index nor SpreadBets.org.uk accept any responsibility for any use that may be made of them.
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Spread Betting 25 August 2011: 6.45am Update
On Wall Street overnight, stocks rallied during the last hour of trade to log their third consecutive session of gains, as stronger-than-expected core durable goods orders boosted sentiment.
Nonetheless, the market remained reasonably cautious ahead of this weekend’s meeting in Jackson Hole, Wyoming.
The Dow Jones Industrial Average and S&P 500 were the top performers - both adding 1.3% - while the NASDAQ gained 0.9% for the session.
Asia & Australia
Across Asia, regional markets are all higher following the late rally on Wall Street, fuelled by stronger-than-expected economic data. Nonetheless, there was still an element of caution ahead of the Jackson Hole Symposium which starts tomorrow.
The Nikkei 225 is the top performer - currently up 2.3% - while the Kospi, Hang Seng and Shanghai Composite are all up between 1.5% and 1.7%.
In Australia, the ASX 200 is currently 1.1% firmer at 4212, well off its earlier highs of 4233. After yesterday’s disappointing roll over, the Australian spread betting market has so far been unable to ignore another night of solid gains on Wall Street.
In mid-afternoon trade, gains are broad-based with all but the consumer staples sector in positive territory. Among the day’s advancers, the property trust and energy sectors are seeing the biggest percentage gains while the financial, materials and industrial sectors are also convincingly higher.
The US and Europe
After the release of some better-than-expected economic data in the US yesterday, Wall Street managed to move higher once again as investors found another bout of optimism.
The fact the key durable goods order reading came in so far ahead of expectations is arguably cause for cheer as it supports the idea that the outlook might not be as bleak as some had painted recently.
The key questions remain - what will the GDP readings look like tomorrow and will Ben Bernanke serve up another stimulus package? A package which, some think, has already been priced into equities from the gains at the start of the week.
This has certainly set the pace across Asian markets in the last few hours and the expectation is that the upbeat mood will carry into Europe too.
There's certainly little in the way of economic data around in the next few hours with the potential to disrupt this trend, although earnings calendars are again looking busy.
Kazakhmys, Aggreko, AMEC and Diageo are amongst the higher profile reports in London whilst elsewhere in Europe Credit Agricole and Raiffeisen Bank are also expected.
Ahead of the open we're calling the FTSE up 19 at 5225, the DAX up 11 at 5692 and the CAC up 5 at 3145.
Remember that financial spread betting is a leveraged product and can result in losses that exceed your initial deposit. Spread betting may not be suitable for everyone, so please ensure that you fully understand the risks involved.
The above comments do not constitute investment advice and neither IG Index nor SpreadBets.org.uk accept any responsibility for any use that may be made of them.
Advert:
IG Index Spread Betting - No Fees, No Commissions, Free Charts and Live Prices.
Spread Bet on Indices, Forex, Commodities, Shares and more. For details see IG Index.
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"Barclays Surges Higher Lifting FTSE 100 Spread Betting Market" last update by AG, 25-Aug-2011
Warning: Financial spread betting carries a high level of risk. You can lose more than your initial investment or stake. Financial spread betting may not be suitable for all investors. Only trade with money that you can afford to lose. Make sure you fully understand the risk involved. If necessary, seek independent financial advice.
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