Posted on | May 10, 2012 | No Comments
Equity markets have had a more stable foundation today after the decline of recent days as investors await new developments from Europe, particularly in Greece and Spain.
The lack of any new news flow has prompted some buying in some heavily oversold stocks, as former Greek finance minister Venizelos takes his turn to try and form a government.
Slightly weaker than expected economic data out of China and Europe has served to limit the upside as growth concerns continue to weigh.
A sharp drop in Chinese imports has raised concerns about a slower pace of growth in that country as spread betting investors await further economic data early tomorrow morning with the release of inflation and industrial production data.
The biggest gainers have been in the technology sector with ARM Holdings jumping sharply after recent losses on the back of some positive broker comment.
UK banks have also performed better today with Lloyds and Barclays near the top of the leader board.
On the company updates, BT Group has slid back after full year revenue slid 4 percent, however pre-tax profit rose 17 percent.
Also lower was consumer goods giant Reckitt Benckiser after one of its largest shareholders offloaded a third of its holding.
Mining stocks have also done fairly well given the disappointing China data; however the rebound needs to be put in the context with some of the declines of the past few days.
US markets opened higher this morning after a disappointing session yesterday, higher on the back of a more positive session in Europe.
Economic data proved to somewhat uninspiring with weekly jobless claims coming in broadly as expected, slightly lower at 367k.
The US trade deficit ballooned to $51.8bn, with imports rising sharply.
In shares spread trading, Cisco Systems has slid lower after the technology giant lowered its outlook for Q4. Rebounding European financials has seen US banks bounce back.
Forex Spread Betting
The biggest gainer today has been the Australian dollar after unemployment figures in the country, showed a sharp decline from 5.2 percent to 4.9 percent and diminishing the possibility of another rate cut in the short term from the RBA.
Also in FX spread betting, the pound has also gained after the Bank of England resisted the temptation to embark on further easing measures, despite recent disappointing economic data.
It seems likely that next week’s inflation report could well give markets some clues as to when and if the Bank could embark on further easing measures.
The single currency has also had a slightly firmer tone as Spanish bond yields have eased.
Commodities Spread Betting
Copper prices bounced off long term support at $3.63, after China’s trade balance showed a much bigger surplus than expected.
Looking behind the numbers though and the picture is slightly more worrisome, with a sharp drop in imports.
Expectations are for inflation numbers due on Friday to drop back while industrial production for April is expected to improve.
Crude oil prices have had a slightly firmer tone today; however Brent prices are still struggling to get above the 200 day MA.
US prices managed to close above the 200 day average yesterday, thus keeping the risk of further downside limited.
Gold prices have bounced back near to the $1,600 level as the recent move into US dollars has shown signs of slipping back.
Please remember that Spread Betting, FX and CFDs are leveraged products and carry a high level of risk to your capital. It’s possible to lose more than your initial investment. These products may not be suitable for all investors, please ensure you understand the risks involved and seek independent advice if necessary.
Spread Betting, FX and CFD comments by Michael Hewson, Market Analyst, CMC Markets.
The above should not be construed in any circumstances as a recommendation or offer to sell or recommendation or solicitation of any offer to buy any security or other financial instrument.
Neither CMC Markets nor Spread-Betting.org warrant or represent that the material is accurate, complete, not misleading, or fit for the purpose which it is intended and it should not be relied upon as such.