Safe-haven government debt rose, with the yield on the benchmark 10-year US Treasury note falling for the eighth straight week. Whether Greece can remain in the Eurozone and concerns about the health of Spanish banks spurred buying.

Data showing US consumer sentiment rose to its highest level in more than four years in early May lifted shares earlier in the day, but concerns over Europe and JPMorgan Chase & Co’s $2 billion trading loss led equity markets to retreat.

Europe stoked market jitters. The failure by politicians in Greece to agree on a new government sent the country hurtling toward a new vote, with radical leftists leading in the polls and poised to scrap a 130-billion-euro bailout that has staved off default.

European shares erased early losses to end higher on the US consumer sentiment data, although many investors remained wary over Spain’s banks and Greece’s political impasse.

The number of Americans submitting new applications for jobless benefits edged down last week, easing concerns the labour market was deteriorating after surprisingly weak employment growth in April.

Another report, also see www.SpreadBets.org.uk, on Thursday showed the US trade deficit widened in March, with exports surging to a record high and a rise in imports highlighting the economy’s firming underlying demand.

Together, the reports indicated the economy remains on a moderate growth path, despite the softer jobs growth and signs the service sector slowed in April.

New claims for state unemployment benefits slipped 1,000 last week to a seasonally adjusted 367,000, the Labour Department said.

Economists who had expected claims to rise to 369,000 said the decline suggested seasonal distortions that had led to a spike in applications last month was probably over.

Separately, the trade gap widened 14.1 percent to $51.8 billion in March, the biggest jump in nearly a year, as a surge in imports swamped a rise in exports, which hit a record high.

While a widening trade deficit is a drag on gross domestic product, the details of the trade report were broadly in line with the government’s assumptions when it made its first GDP estimate last month.

Still, the government’s gauge of first-quarter GDP growth is expected to be lowered to an annual pace of about 1.9 percent from 2.2 percent because of a smaller-than-expected rise in wholesale inventories in March reported on Wednesday.

The above is a review of the global stock markets for 7 May 12 – 11 May 12.

CFD trading, forex trading and spread trading carry a high level of risk to your capital with the possibility of losing more than your initial investment and may not be suitable for all investors. Ensure you fully understand the risks involved and seek independent advice if necessary.

The information and comments provided herein under no circumstances are to be considered an offer or solicitation to invest and nothing herein should be construed as investment advice. The information provided is believed to be accurate at the date the information is produced.

European markets had been struggling to make headway today despite encouraging Q1 GDP data from the economic core of Europe.

Germany’s surprise 0.5% rise appeared to have stemmed some of the downward pressure in equity markets over the past few days. However, it does highlight how big the divergences are between the stronger core and the struggling periphery.

The rise in German GDP also reinforces how difficult it will be for economies like Italy (which contracted more than expected at 0.8%) and Greece (which showed an annualised Q1 contraction of 6.2%) to make the necessary structural adjustments when locked into the same currency.

Sector movers have been somewhat of a mixed bag given the differences between the North and South of Europe, with telecommunications the better performers, while utilities which outperformed yesterday are the biggest losers.

BT Group has helped drive gains in the telecoms sector after being on the receiving end of a couple of broker upgrades from Espirito Santo and Alphavalue.

Also on the plus side, security firm G4S is sharply higher after profits for Q1 came in as expected helped by emerging markets growth, while the Olympics this year should also provide a significant boost.

In the brokers crosshairs International Airlines Group slid back after being downgraded by JP Morgan on the back of a deteriorating Spanish outlook and poor performance at BMI.

US Markets

US markets were initially set to take their cues from the slightly more resilient tone in Europe by opening higher.

However, the confirmation that new elections were set to take place in Greece saw these gains evaporate and markets opened lower, but losses have been tempered by better than expected US economic data.

Economic data proved to be somewhat of a mixed bag with retail sales for April disappointing slightly, coming in at 0.1%, down from 0.8% in March.

With CPI coming in flat, due to falling in energy prices, it was left to Empire Manufacturing to post the positive surprise.

The figure hit its highest level since May last year, coming in at 17.09, up from 6.56, and continuing to show that the US economy while a little slow continues to show little rays of light.

In earnings news, Home Depot saw a rise in Q1 profits of 27.5% helped largely by the milder winter weather.

Markets appeared unimpressed however as the company guidance fell short of analyst expectations.

Investment bank JP Morgan also remains in the spotlight in the wake of last week’s trading loss as CEO Jamie Dimon comes under pressure over his role in the saga.

Forex

The single currency has once again made new four month lows after the news that fresh Greek elections are now set to take place in mid-June.

While this should not really have been a surprise, markets have reacted badly with Spanish and Italian bond yields spiking higher.

The US dollar has busted through its previous 4 month highs, against a basket of currencies as capital flows out of Europe into the world’s largest reserve currency.

Strangely, given the amount of risk-off selling, the Australian and Canadian dollar have resisted the downward pressure to outperform.

The Aussie rebounded from the support at 0.9950 which represents the 61.8% retracement of the entire up move from the October lows at 0.9395 and the highs this year at 1.0860. The USD/CAD is struggling to get above the 200 day MA at 1.0050.

The pound has struggled against the resurgent dollar despite a slightly lower trade deficit for March and slightly better showing on the export front.

Tomorrow’s Bank of England inflation report could well give future direction to the next move on monetary policy especially if, as expected, inflation expectations remain sticky.

Commodities

Crude oil prices have proved rather more resilient in the face of concerns coming out of Europe holding above their lows yesterday.

The black gold pulled higher on the better than expected German growth numbers and US Empire manufacturing, but found the upside momentum tempered by concerns about a Greek exit.

Copper prices have proved much less resilient despite the surprise rise in German growth, treading water near four month lows.

Gold prices have been choppy pulled higher on the one hand about speculation about a third LTRO, but dragged lower as the US dollar has retained its resilient tone.

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.

Major US and European stock indexes fell more than 1% after the Labour Department said American employers reduced hiring more than expected in April.

The week was the worst this year for Wall Street stocks, with energy leading the decline. Note can you can trade US stock markets like the Dow Jones and S+P 500 with firms like CMC Markets and Spreadex. In addition, City Index will also let you us shares.

Just 115,000 workers were added to payrolls last month or 55,000 less than economists expected.

While the unemployment rate fell one-tenth of a point to 8.1%, a three-year low, that was only because the workforce shrank as people retired or stopped seeking work.

The third straight monthly decline in hiring growth spurred concerns that the US economy is losing momentum and doused hopes that a stretch of strong winter hiring had signalled a turning point for the US recovery.

The US jobs data added to the gloomy tone from Europe, where purchasing managers’ indexes, primarily covering services, suggested a recession across the Eurozone could extend to mid-year and be deeper than previously imagined.

Markit’s Eurozone Services PMI, which gauges business activity over a month, came in at 46.9 for April, sharply lower than 49.2 in March. Anything below 50 signifies contraction.

Some stock market analysts said the jobs report, which followed weaker-than-expected services sector data last week, will fuel hopes for a third round of stimulus, by the Federal Reserve to keep rates low and to foster growth.

The above is a review of the global stock markets for 30 April 12 – 4 May 12.

CFD trading, forex trading and spread trading carry a high level of risk to your capital with the possibility of losing more than your initial investment and may not be suitable for all investors. Ensure you fully understand the risks involved and seek independent advice if necessary.

The information and comments provided herein under no circumstances are to be considered an offer or solicitation to invest and nothing herein should be construed as investment advice. The information provided is believed to be accurate at the date the information is produced.

We have seen a double bottom form on charts representing markets such as FTSE 100, Dow Jones and EUR/USD which could potentially signal a reversal is possible.

It is clear there are still many spread traders and investors alike sticking to the sidelines until we hear some sort of EU announcement stating how they plan to tackle the latest episode of the debt debacle.

With a Greek euro exit gradually being priced in, traders will be waiting for more central bank stimulus to recover these recent losses, which could come from China, as its latest bout of data manifests how their domestic demand is slowing.

Or the much needed boost could be delivered by the Fed, which would be subject to economic developments and could be some time away, or from EU fiscal unity, increases to the debt firewall or further ECB intervention.

Market Review by Spreadex.

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.

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.

The reality is that stocks have performed strongly since the end of 2011 and have been well-positioned to correct.

This is particularly true if one were to heed the premium that stocks trade at according to cyclically adjusted price to earnings, a measure of how expensive stocks are long-term.

More worrying still is the extent to which large-cap company profit margins are ahead of long-term averages, meaning that this typically mean-reverting measurement looks precariously high.

It wouldn’t be unreasonable, then, to be concerned that if company profits plateau of falter, the prices that reflect their risk-adjusted cash flows could take a turn lower not just on macro fears but on their own merit, too.

And, as prices rarely move in perfect lockstep with valuations but with valuations and sentiment, stocks are just as vulnerable to price shocks now as they were this time last year, albeit with a lot of the ECB’s and IMF’s firepower already deployed.

Market Review by Spreadex.

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.

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.

The political uncertainty generated by the weekend election results in Europe shouldn’t really have been that much of a surprise to markets, given the well trailed opinion polls.

However, it seems that investors have decided to exercise caution and push risky assets sharply lower as investors mull their next move in what is becoming a very organic crisis.

The Greek stock market closed at its lowest levels since 1992 after left wing party leader Alex Tsipras rejected the bailout deal as “null” raising concerns that the next move in the crisis could well be a path towards an exit from the euro.

As a result, the more cyclical sectors have borne the brunt of the declines with basic resource stocks the biggest losers on falling metal prices. Vedanta Resources lead the way, while gold miners Randgold Resources and Fresnillo have slid as gold and silver prices slide.

On the plus side, Aviva’s share price is surging after CEO Andrew Moss quit the board after last week’s shareholder revolt against the remuneration report.

Banking giant HSBC has also held up well after reporting its Q1 results, with underlying profits up, though this was hit by higher costs on debt revaluation.

Tullow Oil is also outperforming after announcing that one of its new wells in Kenya could well see increased production potential.

US Markets

US markets opened weaker this morning with events in Europe weighing on sentiment while earnings from American bellwethers like McDonalds have seen a slowdown in same store sales suggesting that the company is beginning to struggle in a tightening global environment.

Games company Electronic Arts is in focus after reporting that Q4 profit more than doubled due to good sales of one of its latest titles. Core revenue showed some weakness raising concerns about the future outlook.

Watch maker Fossil saw Q1 earnings rise 4.2% but concern about a softening sales environment, especially across Europe seems to be weighing on the shares.

After the bell the latest Q2 earnings from Disney will be awaited with some anticipation with expectations of a rise to $0.55c a share.

Forex

The US dollar and the Japanese yen have been the main outperformers today as investors fret about the effects a Greek exit would have on the European economy as well as global growth.

The biggest fallers have been the Australian and New Zealand dollar, as both continue their recent decline on concerns over declining economic activity.

The Australian government also announced its first reduction in spending in over 40 years as PM Gillard pledged to return the budget to a surplus.

With expectations of further cuts in rates, the Aussie looks set to bust back through parity against the US dollar in the coming weeks.

The pound has had a rather mixed day knocked back by disappointing housing data from the Royal Institute of Chartered Surveyors which saw the number of surveyors reporting price declines rise by 19%.

Commodities

The US dollar has risen across the board this morning as concerns about the growth outlook sending commodity prices sliding across the board.

Copper prices have dropped sharply driven low about demand concerns as Europe continues to press the self-destruct button as politicians battle against local discontent in respect of their response to the European debt crisis.

Oil prices have followed suit with Brent Crude dropping below its 200 day MA for the first time since early January.

US crude prices are also flirting with their 200 day average but have hit their lows for the year, while a close below $96.30 could portend further losses towards the December 2011 lows at $92.50.

Even traditional safe havens of gold and silver have suffered at the hands of the US dollar with gold hitting its lowest levels since early January, after breaking below long term trend line support at $1,620 an ounce.

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.

The move was wholly counterintuitive, coming as it did after important economic data from America and Britain which pointed in the opposite direction.

In Britain the figures showed economic output falling by -0.2% in the first three months of the year.

As the second consecutive quarterly shrinkage, it meant a return to recession. Sterling slipped lower only briefly before resuming its upward trek.

The equivalent US statistic showed an 11th successive quarter of positive growth, this time amounting to 0.5%. The dollar edged momentarily higher before extending its decline.

For some reason FX trading investors are well-disposed to the pound. It might be just that they see it as the least of several evils but the positive sentiment was enough to take Sterling’s trade-weighted index to its highest level since August 2009.

Market FX Review by MoneyCorp.

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.

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.

This is due to the fact that much of the headline figure will have already been priced in as the deteriorating economies in Europe was always going to have a significant impact on the UK through loss of trade.

The sell-off this morning was overshadowed yet again by impressive US earnings including Apple and Boeing.

However, as investors obviously welcome companies beating analyst estimates, it is worth noting that the bar was set considerably low and that the real focus should probably be on earnings growth.

Market Review by Spreadex.

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.

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.

This comes as the uncertainty that had until recently been confined to the southern European economies, starts to spread to the northern core economies of Holland and France.

The plague of the European sovereign debt crisis looks set to claim the scalp of yet another government as the Netherlands’ government falls over disagreements with respect to cuts to the country’s budget as politicians seek to bring it into line with the fiscal compact agreed in December.

The likelihood of a new socialist French President has also spooked markets who fear that, if elected Francois Hollande, will be less free market friendly which could put him on a collision course with Germany.

The biggest decliners have been in financials and basic resource stocks as European yields on 10 year French, Dutch, and Italian bonds push higher, reflecting investor concern.

Spanish bonds once again hit 6% after data showed the Spanish economy contracted 0.4% in Q1 and went into recession.

UK Markets

Mining stocks like Vedanta Resources have slid back after Chinese manufacturing PMI data remained in contraction territory in April.

Financials have also slid back on fears that Holland could lose its triple “A” rating, prompting a sharp sell-off in European banking stocks. The biggest decliner on the day is Old Mutual after a broker downgrade from Goldman Sachs from “conviction buy” to “buy”.

On the plus side, telecommunications are higher with Vodafone gaining on speculation it is ready to acquire Cable and Wireless Worldwide, which would give it access to a fixed line network in the UK.

Satellite broadcaster BSkyB is also higher after announcing it was to buy back 411k of its shares at 671p and shrugging off news of an Ofcom enquiry as part of a hacking investigation.

US Markets

US financial spread trading markets opened lower this morning on the back of the weaker tone in Europe. Political uncertainty and risk aversion usually go hand in hand and the uncertain tone in Europe has prompted investors to adopt a safety first attitude.

Stocks in focus include US retailer Wal-Mart after the company came under scrutiny regarding bribery allegations in Mexico.

In earnings news, Conoco Philips missed expectations of $2.08c for Q1, coming in at $2.02c a share, but up from last years $1.82c share.

Kellogg shares were also getting crunched after the company cut its forecast for 2012 because of slower growth in Q1 after its profits came in light.

Other stocks in focus include Netflix after the close where investors will be hoping that losses come in below expectations of $0.27c a share.

Forex

Risk aversion has been the order of the day today with the US dollar and Japanese yen being the main currency gainers on the day.

The biggest fallers have been the commodity currencies with the New Zealand and Australian dollar both falling sharply after Australian factory gate prices dropped sharply raising the prospect of further rate cuts from the RBA.

With CPI also expected to decline the Aussie could well decline further as markets start to price in an easing of fiscal policy over the coming months.

The single currency has also dropped sharply after disappointing manufacturing German PMI data for April showed activity slipped sharply into contraction from 49 to 46.3.

Eurozone services and manufacturing PMI data also showed sharp contractions in April dropping from to 47.9 and 46 respectively.

The pound has also come under pressure but has avoided the worst of the declines ahead of key Q1 GDP data out later this week.

Commodities

Elsewhere in commodities spread trading, the recent see-sawing in crude prices continued today on both WTI and Brent measures as prices slid sharply on fears about the economic outlook in Europe as well as China, after disappointing PMI data for April.

Copper prices have reversed all of Friday’s gains after this morning’s disappointing Chinese and European data while the US dollar has rebounded strongly.

Some evidence of declining demand for Chinese copper imports hasn’t helped sentiment either, after a 7% decline in March from a month earlier.

The rebound in the US dollar has also sent precious metals lower as well with gold and silver sharply down with gold prices threatening to break below the key $1,625 support level.

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.

Strangely, that gain was mainly down to the European Central Bank, which let it be known that it would probably buy more Euroland government bonds.

Anything likely to stave off a Eurozone sovereign debt crisis is good for the Euroland economy.

Good news for Europe is good news for Chinese exporters and the Chinese economy.

Together they constitute good news for New Zealand exporters and the Kiwi dollar.

The home-grown good news was less compelling. Business NZ’s purchasing managers’ index was less positive, down three points at 54.5.

The Quarterly Survey of Business Opinion improved from zero to 13 but analysts suspect it overstates the real situation among firms.

Market FX Review by MoneyCorp.

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.

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.