FTSE 100 Spreads Lower as Hopes of EU Debt Crisis Plan Fade
|
|
|
For today's update see Spread Betting Daily.
The Daily Update from Anthony Grech, Research Analyst, IG Index.
Spread Betting 20 October 2011: 11.00am Update
Fresh reports of talks stalling between France and Germany pushed the FTSE 100 lower this morning, as hopes dampened that an EU summit on Sunday would come up with a comprehensive plan to tackle the Eurozone debt crisis.
By 10.30am (London time), the FTSE 100 was down 0.45% at 5425.97, while the FTSE 250 had recovered some of its earlier losses and was down 0.28% at 10,203.19, after UK retail sales came in better than expected.
'Merkozy' talks at a standstill
French President Nicolas Sarkozy announced late yesterday evening that plans to tackle the Eurozone debt crisis had stalled between Paris and Berlin, who were at odds over how to increase the firepower of the region's bailout fund.
The dispute saw Mr Sarkozy fly to Frankfurt to talk with German chancellor Angela Merkel, in an attempt to break the deadlock ahead of a European leaders' summit on Sunday.
France are arguing that the most effective way of leveraging the EFSF emergency fund is to turn it into a bank, which could then access funding from the ECB, however both the central bank and German government have opposed this.
Adding to uncertainty this morning is a report from the Financial Times saying plans to strengthen the banking system would fall short of spread betting market expectations. The report said that compared with the latest official estimates which have put banks’ capital shortfall at less than €100 billion, they estimate the figure to be €275 billion or more.
Meanwhile, this afternoon in Greece, parliament will take a vote on further austerity measures needed to avert a default, which could reverberate throughout the Eurozone.
However, some hope still remains that leaders will agree new steps to reduce Greece's debt, strengthen the capital of banks with exposure to troubled Eurozone sovereigns and leverage the Eurozone’s rescue fund to stem contagion to bigger economies.
European Commission president Jose Barroso said today that a 'positive outcome' is possible at this weekend's EU summit.
UK retail sales
Data released this morning showed that retail sales grew more than expected in September after a surprise increase in sales of laptops and video games.
Retail sales (including automotive fuel) rose by 0.6% in September after a fall of 0.4% in August, compared to analysts' expectations of sales to be flat on the month. Excluding fuel, retail sales went up 0.7% on the month and were 0.4% higher on the year, coming in above estimates for the monthly rise.
The data provides a rare bit of good news for British retailers, which have otherwise been struggling. Rising prices, emphasised by the recent rise in inflation to 5.2%, muted wage growth and government austerity measures have forced shoppers to rein in purchases.
Nestle earnings report
Nestle, the world's biggest food company, raised its 2011 sales forecast after nine-month revenue rose at the fastest pace in three years. The increase in revenue was helped by higher prices for Nescafe soluble coffee and increased sales volume in Asia.
The company expects revenue to beat a long-term sales growth target of 5% to 6% this year, while nine-month sales increased 7.3%, compared to predictions of a 7.2% rise.
The company is passing on higher prices to consumers this year, a period in which it has estimated its raw-material costs may jump as much as 3 billion Swiss francs. Despite the news, Nestle shares fell 0.58% to 51.25 francs by 10.20 (London time).
US Pre-market
Dow futures were higher this morning, up 0.14% at 11,460.00, while S&P 500 futures advanced 0.2% to 1240.00, suggesting that Wall Street will open marginally higher this afternoon.
On the economic front, US weekly jobs data is published at 1.30pm (London time), with leading indicators and Fed manufacturing data due at 3pm (London time).
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.
|
Spread Betting 20 October 2011: 6.00am Update
Overnight, US stocks gave back some of the previous session’s gains, as more doubt was cast on a resolution to the European debt problems.
Reports of a split between France and Germany over the best way to boost the European bailout fund sparked the selling. US markets had started the session on a positive note, bolstered by somewhat positive housing data, plus gains across Europe and Asia.
The Fed’s Beige Book survey also failed to lift sentiment. Although modest, it feels as though the economy continued to expand last month. Disappointingly, the Fed noted that companies grew more pessimistic about the economy. However, on the earnings front, 70% of companies that have reported in the US so far have beaten earnings-per-share expectations.
Among the major averages, the Dow Jones Industrial Average shed 0.6% to end at 11505, the S&P slumped 1.3% to 1210, while the Nasdaq plunged 2% to 2604. The Nasdaq underperformed after Apple’s worse-than-expected result saw its shares sold off along with other technical stocks.
Asia & Australia
Across Asia, regional markets are all softer, giving up yesterday’s gains on the back of a weak US lead. Sentiment has been dampened by reports of a split between France and Germany over the best way to boost the European bailout fund.
The news trumped yesterday’s reports that Germany and France will increase the size of the European rescue fund.
The resource stocks have been hit hard in Hong Kong, as well as several Macau casino operators. The Hang Seng is leading the region’s fall with a 1.5% drop. Elsewhere, the Nikkei is down 0.9% and the Shanghai index is 0.8% lower.
In Australia, the ASX 200 got off to a weak start and has since extended its losses. The index is down 1.5% at 4151 after having hit an eight-day low of 4145. Without a resolution to the current problems surrounding Europe, the Aussie market has given up all of yesterday’s gains.
The materials sector is the worst performer, with the big miners weighing on the sector. BHP Billiton, Rio Tinto and Fortescue are down 2%-3%, while Newcrest is down 5.4% on disappointing 1Q production.
Risk appetite is quickly evaporating from share spread betting markets once again as uncertainty continues to mount over precisely what we'll see as a proposed solution to the Eurozone debt crisis next week.
Add to this some less-than-inspiring earnings news from the US last night, with Apple falling short of analyst expectations, and it's hardly a surprise that traders are heading for the exits once again.
Europe & The US
German inflation, UK retail sales and Eurozone consumer confidence data will ensure that there's at least some potential for further direction to be found in the fundamentals over the next few hours, whilst existing home sales and the Philly Fed are both on the cards once trading recommences in the US.
It's also another busy day for earnings on both sides of the Atlantic. Britvic, SABMiller, Anglo American and Cairn Energy are some of the highlights in London, whilst Paris sees Remy Cointreau, Publicis and Pernod Ricard making quarterly updates.
Q3 earnings season continues apace on Wall Street as well, with a whole raft of companies posting news, though standouts are likely to include AT&T, Philip Morris and Eli Lily.
Once again, however, it’s going to be the big Eurozone story that stands to provide the most meaningful direction for markets - touching all asset classes - as and when we get the next instalment.
Ahead of the open we're calling the FTSE down 66 at 5384, the DAX down 77 at 5837 and the CAC down 37 at 3120.
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.
|
"FTSE 100 Spreads Lower as Hopes of EU Debt Crisis Plan Fade" last update by AG, 20-Oct-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.
Similar articles:
Spread Betting Daily - last update: 17-May-2012
Your daily spread betting update from the insiders. A look at the FTSE 100 and a range of other spread betting markets from Crude Oil to Shares to Gold to . . . read more Spread Betting Daily.
Spread Bets Daily Markets - last update: 16-May-2012
Spread Betting Daily News - A daily trading update from IG Index. Every weekday the experts offer their view of the markets . . . read more Spread Bets Daily Markets.
Shares Trading: AstraZeneca Declines on Plummeting Pre-Tax Profits - last update: 26-Apr-2012
Drug maker GlaxoSmithKline dropped 0.4% after it reported a 13% decline in first-quarter profits, while AstraZeneca declined 5.6% after it reported a 40% drop in pre-tax profits. Unilever shares climbed 3% to 2635p after sales rose . . . read more Shares Trading: AstraZeneca Declines on Plummeting Pre-Tax Profits.
ARM Holdings Spreads Rally amid Stellar Apple Results - last update: 25-Apr-2012
In equities spread trading, ARM Holdings was the top FTSE 100 gainer, up 4.3%, bouncing after a lukewarm reception to in-line results from the British chip designer on Tuesday. The price gain was on the back of forecast-beating . . . read more ARM Holdings Spreads Rally amid Stellar Apple Results.
Spread Trading: Rallying Banking Stocks Push FTSE Higher - last update: 24-Apr-2012
Banking stocks led the FTSE's marginal recovery. Lloyds rose 2.25 %, while Barclays, Standard Chartered and HSBC spread trading markets were up by 1.34%, 0.15% and 0.1% respectively. Miners also edged up today . . . read more Spread Trading: Rallying Banking Stocks Push FTSE Higher.
Index Spread Betting: FTSE Falls 100 Points as Sarkozy Losses Election Round - last update: 23-Apr-2012
The FTSE 100 shed a hundred points during the morning session as uncertainty over the French presidential election on Sunday unnerved investors. Current French President Nicolas Sarkozy lost to Francois Gerard Georges . . . read more Index Spread Betting: FTSE Falls 100 Points as Sarkozy Losses Election Round.
Broker Upgrade Boosts Lloyds Shares Spread Betting Market - last update: 20-Apr-2012
Elsewhere in shares spread betting, Lloyds was the second-biggest FTSE 100 gainer, up 3.5% as Investec Securities reiterated its 'buy' rating on the part state-owned British lender. Unsurprisingly, shares in Barclays and . . . read more Broker Upgrade Boosts Lloyds Shares Spread Betting Market.
FTSE 100 Spread Betting Index Rises on Successful Spanish Auction - last update: 19-Apr-2012
The FTSE 100 spread betting index traded at 5783.8, gaining 0.64% by midday (London time) on the back of a successful Spanish bond sale. Spain sold €2.541 billion of debt, slightly above the upper end of their target . . . read more FTSE 100 Spread Betting Index Rises on Successful Spanish Auction.
Increased Gold Output Causes Fresnillo Spreads to Rally - last update: 18-Apr-2012
Also in shares spread betting, Fresnillo was one of the mining sector's best performers, gaining more than 3% as gold output was ahead of target, due to the opening of a new mine, Noche Buena. This came despite an . . . read more Increased Gold Output Causes Fresnillo Spreads to Rally.
EUR/USD Forex Spreads Push Higher Despite Rising Spanish Yields - last update: 17-Apr-2012
Talk on the floors seems to be centred on the sharp move higher for the EUR/USD financial spread betting market in US trade, despite no one single catalyst to attribute the move too. One gets the sense though that $1.30 seems . . . read more EUR/USD Forex Spreads Push Higher Despite Rising Spanish Yields.
Spread Betting Daily Index - An index of Mid-Morning Daily Spread Betting Reports covering the key Index, Forex, Shares and Commodities markets.
|
|
|
Free Financial Email: Latest Spread Betting Offers and where to find narrow spreads.
Click here to sign up.
|
|
