Spread Betting 2 Sep 2010
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For today's update see Spread Betting.
The Daily Update from Anthony Grech, Research Analyst, IG Index.
Spread Betting 2 September 2010: 11.30am Update
The FTSE struggled to keep its head above water and maintain its recent upward trend this morning, while UK house process fell for the second consecutive month.
After taking a bigger drop on opening, the FTSE managed to claw back earlier losses and was a shade less than 3 points off at 10.30am (London time) to reach 5363.83.
Market sentiment was somewhat dour as building society Nationwide announced that UK house prices fell 0.9% in August, faster than July’s decline of 0.5%.
Although analysts are confident that more sellers are returning to the market, there is concern that the housing market is out of proportion with the rest of the economy and that many first-time buyers are being discouraged by high deposit requirements.
Looking at the FTSE 100, the morning's big winners included technology firm Autonomy Corporation, which rose 4.60% to 1706p over takeover conjecture involving more than one US technology company.
BAE systems also fared well, adding 2.32% to 309p after the announcement of a new military vehicle contract with the US government worth $629 million. [1]
Also among the day's early leaders were Old Mutual, which added 1.82% to climb to 134.10p, International Power, up 1.51% at 384.20p and BG Group, gaining 1.48% at 1094p.
Things were not so rosy for ARM Holdings which saw its price slip 3.72% to 360.20p, Cable and Wireless, which lost 2.71% at 70p and African Barrick Gold which shed 2.27% at 603.5p. 3i Group lost 1.33% at 266.4p while food retail giant Tesco saw its share price drop to 411.2p (-1.13%).
By 11am (London time) the index had risen 0.10% to 5371.6, tomorrow’s all important US Non Farm payroll data will go some way to dictating whether the UK spread betting markets end the week positively.
There were more positive signs of recovery on the continent with official Eurozone figures showing a 1% expansion between April and June, putting Europe ahead of the US in the recovery stakes.
Germany in particular helped fuel this advance, with growth of 2.2%. At the same time, France saw its unemployment rate drop for the first time since the recession started. In the three months to March, the number of jobless decreased from 9.9% to 9.7%.
In spite of these positive signs from Europe’s largest economies, the expectation is that ECB policy-makers will extend emergency lending measures until they are more confident about the extent of global recovery, their decision is due at 1.45pm this afternoon.
Source: [1] Financial Times (2 September 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.
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Spread Betting 2 September 2010: 06.30am Update
On Wall Street overnight, stocks surged the most since May as manufacturing data in both the US and China bolstered optimism as to the state of the US economy.
The market had been looking for the ISM manufacturing index to fall to 52.5; instead it came in at 56.3. However, it wasn’t all rosy with the private sector jobs reports showing companies unexpectedly cut 10,000 jobs last month, when the market was expecting a gain of 15,000. Nonetheless, traders chose to focus on the positives.
The broad-based S&P 500 and Nasdaq indexes were the top performers, both adding 3% while the Dow Jones Industrial Average rose 2.5%.
Regional markets across Asia are all firmer in afternoon trade, benefiting from the strongest gains on Wall Street in eight weeks. Sentiment improved dramatically overnight on the back of the better-than-expected manufacturing data from China and the US.
As at 06:00, the Hang Seng and Shanghai Composite are the best performers, up 1.2% and 0.9% respectively. The Nikkei 225 and Kospi are adding 0.6% and 0.2%.
In Australia, the ASX 200 is 0.6% firmer at 4523, well off earlier highs of 4552. Today’s significant underperformance of offshore leads should not be that surprising given yesterday’s impressive outperformance, with investors seeming cautious about chasing the market ahead of key jobs data out of the US tomorrow.
Gains for the session are broad-based and are being led by the consumer discretionary, financials and materials sectors, while the industrials sector is the day’s laggard, trading flat.
Even before yesterday's better-than-expected manufacturing data out of the US, equity markets were in the ascendency but the sentiment attached to this reading was sufficient to ensure markets across the globe did indeed start the new month on an upbeat note.
The size of the gains however, around 3% for many major indices, was such that a degree of profit taking was inevitable and we're now looking at a slightly softer start in Europe, although much of the upside is set to remain intact at least for the time being.
Those disappointing ADP payroll numbers out of the US will also help serve as something of a reality check ahead of tomorrow's Non Farms and again any surprises here could easily see all of yesterday's gains unwinding.
In terms of fundamentals, Eurozone GDP and interest rate verdicts will be top of the agenda for many, whilst the UK house price index from Nationwide is also worth watching amidst concerns that another collapse in local property prices could yet be on the cards.
Earnings look relatively light too, with an IMS from UK electronics retailer DSG and full year results from Pernod-Ricard being amongst the few notable events here.
Ahead of the open we're currently calling the FTSE down 18 at 5348, the DAX down 18 at 6066 and the CAC down 21 at 3603.
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 2 Sep 2010" last update by AG, 02-Sep-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.
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