Spread Betting 19 Aug 2010
|
|
|
For today's update see Spread Betting.
The Daily Update from Anthony Grech, Research Analyst, IG Index.
Spread Betting 19 August 2010: 11.30am Update
Positive data on UK retail sales and government borrowing were not sufficient to lift the FTSE 100 out of the doldrums this morning, as broker downgrades helped to push the leading index lower in morning trading.
UK retail sales for July rose by more than expected according to data released this morning. The Office for National Statistics (ONS) reported that year-on-year sales including car fuel rose by 1.3%, more than double the 0.6% predicted in a Bloomberg survey of economists. RBC observed that the data was 'way stronger than expected and genuinely good numbers. There weren't any 'funny' factors which boosted the reading'. [1]
It added that the report indicated that the third quarter of the year was getting off to a good start. Excluding fuel, sales were up 2.4% and the ONS said that the gains were driven by strong performances in the 'other stores', which includes jewellers and sports goods stores, and 'non-store retailing' categories, helping to offset lower household goods sales.
Further positive news for the UK economy came in the shape of data for Public Sector Net Borrowing (PSNBR) in July, which was less than forecast. The figure for the month was £3.173 billion, down from £5.518 billion for July 2009 and below a Bloomberg survey forecast of £4.8 billion.
Corporate tax receipts were the main cause of the improvement, as these improved over the preceding year, and overall revenue for the month increased by 10.5%. The news is likely to reduce the pressure on the government to cut spending, with the chancellor planning to unveil cuts in government spending worth around £61 billion.
Leading the fallers on the FTSE 100 were United Utilities and Inmarsat, both of which suffered due to broker downgrades.
JP Morgan Cazenove downgraded United from 'overweight' to 'neutral', arguing that much of the positive news on the sector was already in the price. UBS moved satellite communications firm Inmarsat to 'neutral' from 'buy' on the grounds that the firm's plans to boost its satellite fleet would take time to have a beneficial effect.
United Utilities retreated 1.87% to 578.50p and Inmarsat descended 4.34% to 706p.
Relative newcomer to the FTSE 100 Essar Energy saw a 34% drop in pre-tax profit for 2010 due to fluctuations in the value of its oil inventories and a poor performance from its retail division.
Pre-tax profit at the Indian power and energy group for the period was £154 million, from £234 million for the first half of 2009. The first six months of 2010 had seen tougher competition from rival petrol stations that, unlike Essar, had benefited from state subsidies during periods of high oil prices. Essar shares fell 1.03% to 404.39p.
Australian miner BHP Billiton began to feel negative effects from its now-hostile takeover attempt on US firm Potash Corp. The ratings agency Standard & Poor's said that it had placed BHP's 'A+' long-term corporate credit rating on review ahead of a possible downgrade.
S&P said that BHP's financial flexibility 'could be strained by its plans to use cash and debt to fund the proposed acquisition', adding that it would lower the rating by one notch unless the offer price and current capital spending programme were not moderated. [2] Despite the news, BHP Billiton shares pushed forward 1.24% to 1873p.
At 10.15am (London time), the FTSE 100 continued to remain in negative territory, down 9.26 points (-0.17%) at 5293.61, while the FTSE 250 had gained 32.23 points (0.32%) to 9919.02.
Oilfield services firm Wellstream Holdings was the star riser on the FTSE 250, surging 7.5% to 545p after the company said that its second half performance was likely to be better than the first six months of the year.
The company added that the outlook for the sub-sea sector was excellent, with growth expected in Brazil, the North Sea, Asia and West Africa. However, the firm's first half pre-tax profit for 2010 was £10.6 million, less than half the 2009 figure of £25.7 million.
Also leaping higher was aviation and newspaper distribution group John Menzies, which saw pre-tax profit almost treble to £20.6 million.
The firm enjoyed a strong performance from its cargo division despite the impact of the Icelandic volcano, and Menzies said that it expected that its aviation business, which accounts for the majority of revenues, would exceed full-year forecasts.
Full year results overall are also expected to be ahead of forecasts. Menzies shares charged ahead by 8.7% to 450p.
One negative piece of news emerged in the form of UK car production data for July, with output down 8.9% against 2009. 98,000 cars were produced in the month, with the fall coming after eight straight months of production increases. The drop was blamed on the end of scrappage schemes around Europe that had supported car sales through the financial crisis.
On the currency markets, Sterling rose sharply against both the Euro and the US Dollar after the release of the retail sales data. Sterling had hit lows of $1.5504 and €1.212 respectively, but the news boosted confidence in the UK economic recovery, and the UK currency recovered lost ground to reach $1.5637 and €1.218 by 10.30am (London time).
Looking ahead this afternoon, we will see the release of important US employment data with the publication of initial US jobless claims for the week to 7 August and continuing claims for the 7 days to 14 August.
Also the Philadelphia Federal Reserve will publish its manufacturing survey for August, helping to provide information on the current direction of US manufacturing.
September futures as of 10.35am (London time) are forecasting a slight rise in US markets, with the Dow up 0.02% and the S&P 500 rising by 0.15%.
Sources: [1] Reuters, 19 August 2010,
Sources: [2] Financial Times, 19 August 2010.
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 19 August 2010: 06.30am Update
In overnight trade, the major US indices shrugged off early weakness to finish the session firmer.
Speculation of further M&A activity helped to offset weakness among energy names following a big build in crude oil inventories.
The consumer discretionary, telecommunications and technology sectors added the bulk of the points. The technology-laden NASDAQ was the top performing, finishing 0.3% firmer while the S&P 500 added 0.2% and the Dow Jones Industrial Average 0.1%. The Dow is now only 0.12% lower for the year.
In Asia, regional markets are mostly higher this Thursday following a solid set of leads from the US. As at 06:00, bargain hunting in Japan has lifted Japanese stocks, with the Nikkei 225 1% firmer. Elsewhere, the Hang Seng and Kospi are up 0.8% and 0.9% respectively while the Shanghai Composite is 0.4% stronger.
In Australia, the ASX 200 is currently flat and well off its intra-day lows of 4454. On the downside, the financial and materials sectors are detracting a bulk of the points, while the energy, industrials, and information technology sectors are the biggest percentage gainers on the upside.
The modestly positive gains across most of Asia are probably paving the way for a degree of support to be seen on European spread betting markets after Wednesday's losses. Once again however the overall feeling is that volumes will be depressed and fundamentals are going to be relatively thin on the ground.
German PPI and UK retail sales will be left to dominate the economic agenda in the hours ahead, whilst once again it's going to be US retailers providing the bulk of direction for earnings ahead of Wall Street's open.
BHP is one to watch as the mining giant gets feisty over its attempt to acquire Canada's Potash, with the bid now turning hostile and the market seemingly showing its disapproval. This is already dragging on the stock and the dual listing will likely see some downside pressures carry into London trade too.
Looking some way beyond this, numbers from Dell and HP after the US close could end up being a little more influential as both stocks will be influenced by the outlook from corporate buyers.
However, ahead of the open we're calling the FTSE up 10 at 5313, the DAX up 5 at 6191 and the CAC up 9 at 3657.
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 19 Aug 2010" last update by AG, 19-Aug-2010
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: 10-Feb-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: 09-Feb-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.
US Spread Betting Markets Trade Lower on Weak Home Sales Data - last update: 27-Jan-2012
In US trade, markets retreated from early highs after home sales data came in weaker than expected. The move saw US spread betting markets shed some of the . . . read more US Spread Betting Markets Trade Lower on Weak Home Sales Data.
FTSE 100 Spread Betting Market Rallies after US Intererst Rate Comment - last update: 26-Jan-2012
The Fed's decision to keep interest rates low for at least another two years while signalling the possibility of further QE reinstated the rally on the FTSE 100 . . . read more FTSE 100 Spread Betting Market Rallies after US Intererst Rate Comment.
Shares Spread Betting: Greek Concerns Calmed by Outstanding Apple Performance - last update: 25-Jan-2012
Very rarely will a single stock have such control on sentiment, but the numbers from Apple seem to have arrested the declining goodwill . . . read more Shares Spread Betting: Greek Concerns Calmed by Outstanding Apple Performance.
UK Shares Trading: Cheming Stocks Fall Despite Announcing Profit Growth - last update: 24-Jan-2012
Defence firm Chemring dropped 14% today despite announcing further profit growth, as UK shares trading investors fretted about possible additional reductions in defence . . . read more UK Shares Trading: Cheming Stocks Fall Despite Announcing Profit Growth.
Indices Spread Betting: FTSE 100 Opens Higher on Mining Stock Performances - last update: 23-Jan-2012
The FTSE 100 moved slightly higher this morning, held up by mining stocks, but the overall atmosphere remained nervous due to the absence of any . . . read more Indices Spread Betting: FTSE 100 Opens Higher on Mining Stock Performances.
Vodafone Spread Betting Market Rallies on Favourable Legal Ruling - last update: 20-Jan-2012
In UK shares spread betting, telecoms giant Vodafone rose 1.8% to 177.7p after reports that a court in India had overturned an earlier ruling against the company. The legal . . . read more Vodafone Spread Betting Market Rallies on Favourable Legal Ruling.
Shares Spread Trading: ASML Holdings Stocks Surge on Higher Q1 Order Forecasts - last update: 19-Jan-2012
The tech stocks were a standout after ASML Holdings, Europe's largest semi-conductor company, forecast higher first quarter orders and circuit . . . read more Shares Spread Trading: ASML Holdings Stocks Surge on Higher Q1 Order Forecasts.
Tullow Oil Sees Shares Plummet as Investors Ignore Positive Reports - last update: 18-Jan-2012
Tullow Oil dropped 6.6% this morning to 1358p, as investors ignored the report of a good 2011 and focused on delays to production at . . . read more Tullow Oil Sees Shares Plummet as Investors Ignore Positive Reports.
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.
|
|
