Spread Betting April
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Weekly Online Spread Bet Comment, update 7 Apr 08
Part 1 - Trading News - Last Week's Markets
Part 2 - Economic Indicators and Company Results
Part 3 - The Financial Press, what the papers said
Trading News - Last Week's Markets
Equities continued their positive tone from last week as investors shrugged off weak economic data, including further US job losses. Appropriately, the catalyst for 4 straight days of gains was April Fools Day.
Markets opened lower as first UBS, and then Deutsche Bank warned of further write-downs. First Direct halted mortgage lending to non-customers and Lehman Brothers announced it was seeking at least $3 billion of funding. However, the early fall in prices was met with strong demand as traders reckoned the worst was over in the banking sector. Banks rose by between 5-10% on the day, pushing the Dow up by nearly 400 points. The better mood continued through the week with investors using market weakness as a buying opportunity. Even Ben Bernanke conceding that the US might fall into recession had little effect.
The FTSE piled on a further gain of 4.5%, rising 8% in the past 2 weeks. The S&P and Hang Seng made similar gains on the week, whilst the Dow, Dax and Nikkei were close behind with rises of over 3%.
Equities Spread Bets
British Energy rose 7% on reports of possible bid discussions with several European energy companies. UBS combined the announcement of a further $19 billion in write-downs with news that the chairman would be free to spend more time with his family. Shares in HSBC fell after its subsidiary, First Direct, halted new mortgage lending. Woolworth's 30% rise in profits beat estimates, but this wasn't enough to prevent a gloomy outlook and a 66% cut in the final dividend. Merrill Lynch shares bounced after their chairman told a Japanese paper that the firm had no need to raise further capital, but US monoline insurer FGIC had its credit rating downgraded to junk. Bank of Ireland, Tate & Lyle and Severn Trent provided satisfactory trading updates.
Forex Spread Bets
Weak retail sales from the Eurozone and further write-downs from UBS and Deutsche Bank saw the Euro retreat from its recent highs. On top of this, Fed members played down the prospect of further cuts in US rates. This gave a further boost to the Dollar, which ended the week at $1.5720 against the Euro and $1.9930 against Sterling. The Euro also fell against Sterling, ending the week at £0.789.
Gold Spread Bets - Crude Oil Spread Bets
The stronger Dollar led to further weakness in the gold Spread Betting market. The precious metal spent much of the week below $900, but edged up to finish at $905.85. Crude Oil prices continued higher after an Exxon Mobil refinery caught fire. There were also worries about petrol supplies ahead of the summer months when most Americans jump in their hummers to drive to another part of America. The 'driving season' as it's known, is an annual concern to oil traders.
Vietnam extended an export ban on rice until June, sparking a 10% rally on Friday. Rice prices have risen 50% over the past fortnight.
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Spread Bets - Economic Indicators and Company Results
Week Commencing 7 Apr 08
Monday
Economic Indicators
UK: 07.00 HBOS House Prices
EU: 07.45 French Trade Balance, 09.30 Sentix Investor Confidence, 11.00 German Industrial Production
US: 20.00 Consumer Confidence
Results
UK: Cranswick, Dawson Holdings and Michael Page trading updates, Easyjet March air traffic
US: Alcoa
Tuesday
Economic Indicators
US: 15.00 Pending Home Sales, 19.00 minutes from the last Federal Reserve meeting
Results
UK: Havelock, Real Good Food and 888 Holdings finals
Wednesday
Economic Indicators
UK: 00.01 Nationwide Consumer Confidence, 09.30 Industrial & Manufacturing Production, 10.30 BRC Shop Prices
EU: 07.00 German Trade Balance, 10.00 EU Q4 GDP
US: 15.30 Oil Inventories
Results
UK: Eurasian Natural Resources and Signet Group finals, Misys and Sage Group trading update
US: Bed Bath & Beyond
Thursday
Economic Indicators
UK: 09.30 Trade Balance, 12.00 Bank of England interest rate announcement
IRE: 11.00 CPI and Industrial Production
EU: 07.45 French Industrial Production, 12.45 European Central Bank announcement, followed by press conference at 13.30
US: 13.30 Trade Balance and Weekly Jobless
Results
UK: Adventis finals, British Energy, Computacenter, Hays and Touchstone trading updates, Vedanta Resources production update
IRE: IFG finals, Aer Lingus EGM
Friday
Economic Indicators
G7 Meeting
EU: 11.00 OECD Leading Indicator
US: 13.30 Import Price Index, 15.00 University of Michigan Consumer Confidence
Results
UK: Cadbury Schweppes, SAB Miller, Sofres and Taylor Nelson trading updates
US: General Electric
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The Financial Press, what the papers said:
Last update: 7 Apr 08
With the World Bank, International Monetary Fund and G7 all meeting this week, the Sunday Times has offered its list of action points to solve the credit crisis. These include an immediate cut in rates and using taxpayers' money to fund mortgage applications.
There's plenty of speculation over the next move for British Energy. The Sunday Times reckons several European firms have approached Centrica with a view to making a joint bid for British Energy. The Telegraph is more specific, revealing that Centrica has been in talks with French giant, EDF. Although talks are at an early stage, the cunning plan is for a '£10 billion British led solution.'
The latest in the O'Brien verses O'Reilly saga is brought to us by the Observer. The Irish Takeover Panel invited Mr O'Brien in for a polite discussion on his intentions towards Independant News & Media. Described as a 'dissident shareholder' Denis O'Brien holds 21% of the shares, and hinted last week that he might bid for the company.
Good news for holders of Moss Bros; the Sunday Times reveals that Debenhams have been in secret discussions with a view to bidding for the mens' outfitters. This is raising hopes of a higher bid than the existing 42p a share offer from Icelandic retailer Baugar.
The Telegraph runs an obituary on Bertie Ahern, debating the future fate of Ireland. The paper is concerned that the close ties with America that helped promote the economic expansion could also lead to its downfall. The argument goes that Ireland is more exposed to the US falling into recession, but that Eurozone policy is dictated by conditions in Germany. The article poses the question, when the boom times come to an end will the Irish public turn against the EU?
A useful reminder from the Independent that, although banks have suddenly become flavour of the month, there's a lot more excitement to come. The article focuses on the 8,000 US regional banks that are due to report over the next few weeks.
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"Spread Betting April" written by paddy powe, last updated 07-Apr-2008
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