Spread Betting Markets Rally on Optimism Over EU Debt Crisis Summit
|
|
|
For today's update see Spread Betting Daily.
The Daily Update from Anthony Grech, Research Analyst, IG Index.
Spread Betting 21 October 2011: 11.15am Update
The FTSE 100 reversed yesterday’s losses as financial spread betting markets became cautiously optimistic on hopes that a comprehensive plan to resolve the Eurozone debt crisis could emerge in a new meeting planned for 26 October.
By 10.30am (London time), the FTSE 100 was up 0.80% at 5427.83, while the FTSE 250 had risen 1.35% to 10,247.90.
Eurozone debt debacle continues
Deep divisions between French president Nicolas Sarkozy and German chancellor Angela Merkel led to realisation that limited progress on strengthening the Eurozone bailout fund would be made at the EU summit on Sunday.
However, a joint statement issued last night from Germany and France said that European leaders would adopt a solution for the crisis in a second meeting, which would be held on Wednesday.
Ahead of the summit on Sunday, Angela Merkel and Nicolas Sarkozy will meet one-on-one in Brussels tomorrow to continue the discussions, which are currently at an impasse, over how to scale up the European Financial Stability Facility fund.
The two leaders disagree over the best way to bolster the facility, which could see France lose its AAA credit rating if the wrong method is chosen.
Meanwhile in Greece, Prime Minister George Papandreou won a parliamentary vote late yesterday on further austerity measures to secure more aid under the 2010 bailout agreement.
Elsewhere in Europe, economic data from Europe’s largest economy showed that German investor confidence slumped to a three-year low this month to 106.4 compared to 107.5 the previous month.
Standard & Poor’s issues further warnings
In a report issued last night from ratings agency Standard & Poor's, it said it will likely lower the credit rating of five European nations, including top-rated France, by one or two notches if the regions slip back into a recession and government borrowings increase.
Sovereign ratings on France, Spain, Italy, Ireland, and Portugal would likely be lowered by one or two notches under both scenarios.
Analysts at S&P said that France would likely be downgraded to AA+ from its coveted AAA rating because of its deteriorating fiscal position. The news comes after the agency warned earlier in the week that the country’s rating was under threat.
The warning comes after Brussels announced proposals yesterday that would regulate credit ratings agencies. The plan includes giving the European regulator, ESMA, the power to approve ratings methods and ban sovereign ratings in exceptional situations, which would extend to countries undergoing bailouts.
Microsoft earnings
Microsoft, the world’s largest software company, saw its quarterly profit increase by a modest 6% from a year earlier as sales of its flagship Windows operating system fell by slowing growth in the PC industry. Growth in PC sales has seen a slip recently due to the threat of another recession, leading cash strapped consumers to hold back on spending.
Overall profit for Microsoft increased to $5.74 billion – the first time in more than a year that the company had not beaten the average Wall Street estimate. Windows made only slight gains last quarter, 2% to $4.87 billion, while the division including Office software grew by 8% to $5.62 billion.
Microsoft continued to lose money in its online services, though the losses narrowed from a year earlier to $494 million from $558 million. Microsoft shares fell to $26.86 per share after the earnings report, but recovered to $27.04 per share on close.
US pre-market
Dow December futures were up 0.2% this morning, while those for the S&P 500 were 0.44% higher, hinting that yesterday’s rise on Wall Street would continue this afternoon.
On the economic data front it is fairly quiet in the US this afternoon, with only speeches from Federal Reserve members being given late this evening.
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 21 October 2011: 6.00am Update
Overnight, US stocks roared back from their lows as European governments discussed deploying $1.3 trillion in funds to tame the current debt issues.
European Progress
France and Germany have also asked European officials to agree on crisis plans by October 26. Reports suggest that Europe may combine the temporary and permanent rescue funds to unleash as much as EUR 940 billion to counter the crisis.
The choppy session saw an initial drop on the back of losses across Asia and Europe. Reports of a split between France and Germany over the best way to boost the European bailout fund saw losses across Asia and Europe yesterday.
In economic news, unemployment claims fell 6000 to 403,000. In a sharp reversal of early losses, the France and Germany reports saw US stocks finish the session with modest gains, while the EUR/USD spreads rose.
On the earnings front, reporting companies continued to impress, as 75% 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 climbed 0.3% to end at 11542, the S&P added 0.5% to 1215, while the NASDAQ lagged behind its peers, shedding 0.2% to sit at 2599. Apple shares continue to weigh on the NASDAQ, while eBay dropped 3.2% after forecasting sales and profit that missed some analyst’s expectations.
Asia & Australia
Across Asia, regional markets have mostly turned positive after a fairly subdued open. Hopes of a solution to the European debt crisis continue to dominate trading. Sentiment was boosted late in US trade by reports that European governments discussed deploying $1.3 trillion in funds to tame the current debt issues.
The news has resulted in modest gains for Asian markets with the Hang Seng up 0.2%, the Shanghai index rising 0.2% and the Nikkei relatively flat.
In Australia, the ASX 200 has come off its highs and is now under water, down 5 points (-0.2%) at 4138. The materials, consumer staples and telecoms are weighing on the index. Despite early gains, we have since seen a reversal as spread betting investors position themselves ahead of the European summit.
The miners have been sold off over the past few sessions tracking metals’ prices lower. We saw some buying interest in mining giant BHP Billiton, which was up 1.3%, but which has since given up most of those gains. Financials are among the leaders on the back of gains for their US peers.
The European Session
Turning to the European session, we are looking at some decent gains in London and Frankfurt as the week's final session gets underway. That said, in light of the 'false start' we saw earlier in the week off the back of unconfirmed reports over the EFSF, it's difficult to ignore the scope for an equally quick retracement.
German IFO surveys and UK public sector finances are high on the economic agenda today, though it's going to be the big macroeconomic line of Eurozone bailouts that continues to dominate.
In terms of earnings, highlights are set to include Aggreko in London and GE on Wall Street, so ahead of the open we're calling the FTSE up 25 at 5410, the DAX up 13 at 5780 and the CAC up 21 at 3105.
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 Markets Rally on Optimism Over EU Debt Crisis Summit" last update by AG, 21-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: 23-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: 22-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.
FTSE 100 Spread Betting Index Falls amid Poor Eurozone PMI Data - last update: 04-May-2012
Markets were back in risk-averse mode this morning following a string of weaker-than-expected PMI services figures from the Eurozone. By 10.45am (London time) the FTSE 100 spread betting index was 0.75% lower . . . read more FTSE 100 Spread Betting Index Falls amid Poor Eurozone PMI Data.
Spread Betting: Successful Spanish Bond Auction Sees UK Banks Rally - last update: 03-May-2012
Elsewhere in spread betting, news of the well covered Spanish bond sale seemed to bode well for UK banks, with Barclays up 1.4% to 216.6p. Lloyds and HSBC were both 1.6% higher at 32.58p and 570.2p . . . read more Spread Betting: Successful Spanish Bond Auction Sees UK Banks Rally.
Improved Chinese Manufacturing Figures See FTSE 100 Spreads Open Higher - last update: 02-May-2012
Also in spread betting, China's manufacturing sector appeared to be easing out of its downturn after figures showed that output declined at its slowest pace in the last six months. The HSBC manufacturing . . . read more Improved Chinese Manufacturing Figures See FTSE 100 Spreads Open Higher.
Substantial Q1 Profits Prompt Rally in Lloyds Spread Betting Market - last update: 01-May-2012
Lloyds spread betting market led gains in the banking sector, rallying 2.4% to 31.76p after reporting first-quarter profits that were substantially ahead of consensus forecast following a sharp decline in . . . read more Substantial Q1 Profits Prompt Rally in Lloyds Spread Betting Market.
RBS Spreads Fall as S&P Downgrade Spanish Banks - last update: 30-Apr-2012
Elsewhere in financial spread betting, the UK 100 fell 0.48% to 5749.41 this morning, breaking a four-day winning streak, as S&P's decision to downgrade 11 of Spain's largest banks revived contagion concerns. Back home, . . . read more RBS Spreads Fall as S&P Downgrade Spanish Banks.
Online Spread Betting: FTSE Edges Higher Despite Spanish Credit Downgrade - last update: 27-Apr-2012
The FTSE 100 online spread betting market seemed to shrug off renewed Eurozone concerns, gaining 0.35% to 5768 by 10.30am (London time). The blue-chip index initially fell on the open after Spain was dealt another blow to . . . read more Online Spread Betting: FTSE Edges Higher Despite Spanish Credit Downgrade.
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 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.
|
|
