Share Trading

Yesterdays FOMC meeting gave many what they were looking for.

The fed chose to use proceeds from investments in mortgage securities to prop up the economic recovery and buy long term government debt.

The move was not the traditional form of QE that many had expected and is instead being branded as QE-lite.

Initially US share trading markets tumbled on the news but managed to rally wiping out much of the losses.

European markets will have their chance to react to the Fed’s decision this morning but will also have its own data to get stuck into.

UK unemployment numbers will be the major focus for UK investors this morning. Traders will want to see the data showing further signs of recovery in the UK, especially ahead of the inflation report due out a little later.

Standard Life resumes the results season for insurers after a two-day lull at the start of the week. Panmure Gordon is forecasting interim operating profit on a European Embedded Value (EEV) basis of £293m, down 16% year on year.

As with TUI, Thomas Cook suffered as a result of the ash cloud from the eruption of Icelandic volcano and in June its attempts to lure people to far-flung hot spots will have been battling the rival appeal of the FIFA World Cup.

Despite that, JP Morgan Cazenove was expressing cautious optimism last week about the medium term outlook for the package tour operators. However, that was before Tuesday’s profits guidance downgrade from TUI and news that TUI’s UK bookings fell by 2% over the past 12 weeks with the Netherlands also down by 3%.

Share Trading Markets

In the UK spreads markets, ahead of the open we expect to see the FTSE down 6 points at 5,370, the DAX up 31 points at 6,317, and the CAC up by 26 points at 3,757.

CFDs, FX and Spread Trading are leveraged products and carry a high level of risk to your capital. It is possible to lose more than your initial investment. These products may not be suitable for all investors, therefore ensure you understand the risks involved and seek independent advice if necessary.

By James Hughes, Analyst, CMC Markets.

Tax treatment depends on the individual circumstances of each client and may be subject to change in the future.

This material 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

The material is not a personal recommendation and you should seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks if you are at all unsure, as well as confirming the legal, tax and accounting characteristics and consequences of any transaction.