Share Trading

The weaker tone of the last two days has gained momentum today as European markets look set to post their worst losing sequence since the beginning of January.

Disappointing manufacturing data from China, Germany and France suggests that the recent recovery in economic activity – especially in the Northern core of Europe – could well be starting to run out of steam.

Mining stocks have borne the brunt with Randgold Resources hit hard after a military coup in Mali raised concerns that production at their mining facilities in the country could well be disrupted.

Mexican silver miner Fresnillo also slid back sharply along with mining heavyweights Xstrata, Vedanta and Antofagasta after Chinese HSBC manufacturing PMI posted a much sharper contraction than forecast, raising concerns that the Chinese economy was slowing down sharply.

UK retail sales numbers also dropped sharply knocking retail stocks back despite clothing retailer Next reporting a rise in profits for 2011, with the company’s rather gloomy outlook seeming to get more attention from investors than the headline numbers.

Elsewhere in shares spread trading, Untied Utilities bucked the negative trend after saying it was on track to deliver a good financial performance for the year. B&Q owner Kingfisher also bucked the negative trend after reporting beat forecasts with a 20% rise in profits.

US markets opened sharply lower replicating the softer tone from Europe. US weekly jobless claims continued the positive theme from the US labour market coming in at 348k below expectations of 351k, though last week’s number was revised slightly higher to 353k.

There is a quite a full reporting calendar with Nike and Accenture due to report after the market close with expectations that both companies will beat previous year’s numbers.

Nike is expected to report Q3 earnings of $1.17c a share while Accenture is expected to report Q2 earnings of $0.85c a share.

Courier company Fedex reported Q3 earnings of $1.55c a share, above expectations of $1.35c a share, but the shares slid back as the company reported concerns about future growth prospects.

Both the New Zealand and Australian dollar have dropped sharply on the back of the weaker tone from China and falling commodity prices, with the Kiwi falling the most after Q4 GDP came in well below expectations of 0.6% at 0.3%.

In forex spread trading, the single currency is also lower as a trifecta of concerns over disappointing economic data in Germany and France. Additionally, deteriorating Portuguese finances and sharply rising Spanish bond yields contrive to reignite concerns about the sustainability of the fiscal situation in Europe.

The pound has also dropped back after retail sales data in February dropped sharply in February, while January’s figure was also revised sharply lower, suggesting that the recent consumer bounce back may well have ground to a halt.

The Japanese yen has been the best performer as US 10 year bond yields drop sharply sending the US dollar lower against the Japanese currency.

Copper prices have dropped sharply today on the back of this morning’s disappointing Chinese data as well as a firmer US dollar. With higher inventories in Chinese warehouses and concerns about future demand copper prices have hit one week lows.

Oil prices have also dropped sharply on the back of this morning’s weaker than expected economic data, though in truth a report that some countries were considering a release of reserves from strategic stockpiles had already started to see it drift lower.
A firmer US dollar has seen metals prices slide back today with gold prices hitting their lowest levels since January this year, though downside could well be limited by reports of central bank buying interest.

Silver prices have also slid to their lowest levels since January on the back of the disappointing data out of China and Europe, given that demand could well drop for industrial uses.

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 Micheal Hewson, 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.

European spread trading markets have traded in a fairly benign fashion today albeit with a slightly softer tone, as German and UK budgets play out in Europe.

Even US existing home sales weren’t enough to lift markets out of the doldrums. The introduction of tax relief on North Sea oil would have expected to give a bit of a boost to oil producers, but no such luck there.

Retailers have been rather more buoyant on the back of some positive Q4 results from Sainsbury’s, though they could have been helped by the announcement to relax Sunday trading rules for 8 weeks during the Olympics.

Other retail bellwethers were also performing well with Marks and Spencer and Morrisons also higher.

The best performing sector has been defensive telecoms with Vodafone helped by a broker upgrade from Goldman Sachs, as well as a positive court ruling from India in a long running tax case.

Gold and silver miners Fresnillo and Randgold Resources are the better performers at the top of the leader board, helped by slightly firmer metals prices.

Banking stocks have slid back as the Chancellor announced an increase in the bank levy to 0.105%, while Aviva and Standard Life are also down after going ex-dividend.

US markets opened slightly higher this morning in the absence of any real direction in European markets though they have drifted into negative territory with the banks helping the slide.

Upside momentum has been somewhat tempered by disappointing existing home sales for February which slid back 0.9%, below expectations of a 0.9% gain. Unsold inventories remain at fairly elevated levels.

With the UK budget taking centre stage today this morning’s February public finance numbers were an early blow to a chancellor who was hoping that tax receipts would hold up into year end.

That proved to be a forlorn hope as spending climbed to push borrowing to a February record of £15bn. This miss suggests that any leeway the Chancellor may have made with respect to this year’s borrowing target has now gone.

Some good news was the lifting of this year’s growth projection by 0.1% to 0.8% but this was well telegraphed beforehand.

The Bank of England minutes didn’t really throw up too many surprises though the news that Posen and Miles favoured more QE did knock the pound off its early highs.

The reaction of the FX spread trading markets has been quite benign with the gilt market slightly higher and yields lower, while the pound is broadly unchanged, if a little weaker against the dollar. It was more affected by the disappointing borrowing numbers than by anything the Chancellor said.

The best performing currency has been the US dollar, after spending most of the day mixed it has started to gain ground in the afternoon session after the disappointing housing data.

The Australian and New Zealand dollar are both lower, still weighed down by a slightly softer commodities sector.

The single currency, like the pound had been pretty much side-lined for most of the day shrugging off concerns about rising Spanish bond yields, however, it started to slip back later in the day, after once again failing at the 1.3290 level.

The gold spread trading market is slightly firmer on the back of a slightly weaker US dollar and somewhat disappointing US housing data.

Vague talk of central bank buying interest at these lower levels has also helped support prices.

Oil prices appear to be going nowhere on the one hand supported by concerns about the Middle East, but weighed down by fears that by going higher they could choke off economic growth.

Saudi Arabian assurances that they could raise output by 25% if needed to meet any supply shortfalls, has done nothing to depress prices.

Copper prices have traded sideways ahead of some manufacturing PMI data out later this week.

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 Micheal Hewson, 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.

It’s been a somewhat mixed day for European markets today with the FTSE lagging behind its European peers, on the back of weaker defensives as well as a weaker oil and gas sector.

In shares spread trading, the defensive utilities sector has slid back with National Grid the biggest faller after the company announced a series of price cuts in gas bills in the US, due to the mild winter.

Shire shares have slid after the company announced it was buying US biotech firm FerroKin for £207m.

Mining shares, on the other hand are doing fairly well on the back of fairly firm copper prices, with Vedanta, Rio Tinto and BHP near the top of the leader board.

US markets opened higher this morning after weekly jobless claims came in at their lowest levels since early 2008 at 351k.

Empire manufacturing also came in higher than analysts expected at 20.21, well above expectations of 17.53.

However, a particular worry was the prices paid, which jumped significantly primarily on the back of higher fuel prices while prices received fell back which suggests that going forward company margins could well start to get squeezed.

Another eastern seaboard survey for March, the Philadelphia Fed also showed a rise coming in at 12.5, above expectations of 12, while prices paid and prices received slid sharply.

Technology shares have led the gainers with Apple shares continuing their upward momentum hitting the $600 level mark for the first time ever, up 50% since July last year when they were $400.

Chipmaker Intel is also near the top of the leader board, while financials are also higher led by Bank of America and JP Morgan.

On the flip side of that Cisco is lower after announcing it is acquiring video software maker NDS Group.

In forex spread trading, the currency laggards today have been the Canadian dollar and Sterling with the pound getting weighed down by ratings agency Fitch’s downward revision on its outlook for the UK economy late last night, ahead of next week’s UK budget.

The Japanese yen has rebounded somewhat after hitting its lowest level in 11 months earlier today.

Commodity currencies with the exception of the Canadian dollar have also pushed higher after losing ground in recent days to the resurgent greenback.

The New Zealand dollar was the best performer, after hitting two month lows late yesterday and rebounding off its 200 day MA.

The single currency has also bounced back after failing to push below the 1.3000 level after a couple of reasonably positive Spanish and French bond auctions.

Copper prices continue to hold up well after data showed that Chilean copper production declined 8% year on year.

Gold and silver prices have rebounded from six-week lows as optimism over the US economy has seen these metals lose considerable ground over the past few days on an improving economic outlook.

Oil prices have slid back despite improving economic data as supply concerns start to recede a little.

Meanwhile, talk that President Obama and UK PM David Cameron discussed the possibility of a release of supplies from the US Strategic Petroleum Reserve, in an attempt to drive energy prices back down, has also seen prices slip back.

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 Micheal Hewson, 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.

European markets have stabilised after yesterday’s sharp falls, trading in a holding pattern ahead of the outcome of this week’s Greece debt swap, the results of which are due tomorrow evening.

For now, spread trading markets are treading water with upside limited due to concerns about the outcome of the debt swap.

This is combined with concerns about faltering economic data, after German factory orders slid sharply in January by 2.7%, which was well below the expected 0.6% rise.

Biggest gainer has been Admiral after the insurance company announced record annual pre-tax profits of nearly £300m, a 13% increase from 2010.

Other gainers have come from yesterday’s biggest fallers with Essar Energy and Evraz bouncing back.

The technology sector has also bounced back with ARM Holdings pulling back after a hefty fall yesterday as attention shifts to the US and the latest iPad release from Apple.

On the downside, British American Tobacco was among the larger fallers after going ex-dividend, along with Standard Chartered.

US markets opened higher this morning pulling back some ground after yesterday’s sharp losses after US ADP employment data for February came in pretty much as expected at 216k, just above the expected 215k consensus and well above the January 170k.

A lot of investor attention will be on Apple today as they announce the launch of their latest iPad at an event later on today.

Yesterday’s bigger fallers have led today’s rebound with Bank of America and Caterpillar both higher, while the more defensive stocks like Merck have slipped back.

The US dollar has given back some of the ground made yesterday as equity markets bounce back after yesterday’s sharp falls.

The biggest gainers include the New Zealand dollar which is sharply higher after bouncing off its 200 day MA, ahead of tonight’s interest rate decision, which is expected to see the RBNZ leave interest rates unchanged at 2.5%.

The Norwegian krone has also bounced back as oil prices have rebounded after their sharp falls yesterday.

The single currency has been broadly neutral despite some rather bad German factory orders data showed a sharp fall in January by 2.7%, well below market expectations of a 0.6% rise.

The pound is also treading water just above some key MA support levels with the 100 day MA and 55 day MA currently holding above recent range lows. A break below 1.5650 could well see significant sharp declines.

The Swiss franc continues to sneak up under the radar as it closes in on the floor set by the Swiss National Bank at 1.2000, as the SNB wrestles with more questions about the conduct of its senior bankers and their trading activities.

Oil spread trading prices have bounced back from yesterday’s lows as markets pause for breath after yesterday’s losses.

Gold and silver prices have stabilised near their recent lows as markets pause for breath ahead of tomorrow’s key event risk.

Copper prices have struggled to rally after yesterday’s falls as concerns over future demand continue to weigh on the upside.

Australia’s disappointing GDP numbers overnight have fed into wider concerns about future demand after yesterday’s Brazil GDP numbers and China’s growth downgrade

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 Micheal Hewson, 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.

Despite the fact that China downgraded its growth forecast yesterday amid concerns about a double-dip in Europe, spread trading markets have today decided – somewhat belatedly – that this is a bad thing, and have turned sharply lower.

Admittedly, sentiment hasn’t been helped by news that another emerging economy in the shape of Brazil saw 2011 GDP slip to 2.7% from a 2010 figure of 7.5%, and this helped accelerate the slide.

A leaked report from the IIF that a Greek default and exit could cost as much as €1tn, from a ripple effect through the European banking system, has also seen investors move out of financials.

While this has all the hallmarks of the IIF talking their book, investors have adopted a safety first approach and driven equities lower.

This story does have to be tempered by a totally separate independent report that argues that the final bill for keeping Europe together could go as high as €2.4tn over the next four years.

Economic data has also been a disappointment with Eurozone Q4 GDP showing a 0.3% contraction.

The usual suspects have borne the brunt of the sell off with industrials, financials and basic resource stocks sliding lower, sending the FTSE to its lowest levels for over a month.

The biggest fallers have been as a result of broker downgrades with Polymetal sliding after being downgraded by UBS, with sector peers Evraz, and Eurasian Natural Resources following in its wake.

On the upside, defensives have outperformed with National Grid doing well on the back of a positive update from Nomura, while pharmaceuticals are also doing well, with GlaxoSmithKline higher.

Wealth manager Hargreaves Lansdown is also higher ahead of speculation it could be in line for demotion from the FTSE 100 tomorrow.

US markets opened significantly lower this morning following Europe’s lead as markets retreat on the back of a myriad of uncertainty, as well as concerns about an economic slowdown in growth in China.

Economic data out later this week could well be a key barometer with respect to new policy steps from the People’s Bank of China.

This has seen the more cyclical stocks bear the brunt of the declines with Alcoa and Caterpillar both lower with financials following closely behind led by Bank of America Merrill Lynch.

The Japanese yen has once again pushed higher along with the US dollar as all other currencies have slid sharply, led by the Norwegian and Swedish Krone as oil prices slide back.

Other commodities currencies have slid back as forex spread trading markets have gone into full reverse with the Australian and New Zealand dollar also sliding sharply dragged lower by falling commodity prices with copper down over 2%.

The single currency has also slid back as concerns grow about the level of participation in the Greek debt swap later this week.

The pound has also suffered against the dollar after house prices showed a much bigger decline than expected in the most recent quarter.

Oil prices have slid back sharply on the realisation that in the absence of any geopolitical risk, when looking at the macro economic backdrop, then the black gold should be a quite a bit lower than it is now.

Brent prices have slid back sharply but still remain above the key $120 mark which has kept a floor under prices since mid-February.

Copper prices have also slumped back sharply on these growth fears, down over 2% from $3.85 to $3.75 and the lowest levels since 21 Feb.

Silver prices have also been caned as the poor man’s gold slides back sharply, losing over 3% while gold prices have also declined dropping below the 200 day SMA and if it closes below the $1,675 level we could well see further declines.

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 Micheal Hewson, 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.