BetOnMarkets Market Reports

In the afternoon traders will be paying attention to the US consumer confidence report, which could have the possibility to lift the world wide equity markets out of the recent funk.

Oil has hit a 17 month low, on speculations that the global financial crisis may slash fuel demand. Oil is down more then 56% since its July 11th peak and it seems that prices are heading lower after OPEC cut oil demand projections for 2009. It seems that the traders that used oil as a hedge against the US economy are now feeling the pain having overlooked the fact that with the world being interconnected, a slowdown in US means a slowdown everywhere else.

BetOnMarkets
 
BetOnMarkets Afternoon Report

Today the buyers stepped out of the shadows, but yet again the sellers stepped in to push markets off their highs off the day. The FTSE and other world indices are still in positive territory for the day, but a wave of poor economic data has kept a lid on any sustained buying. US house prices are down 16.6% year on year, having slumped over 30% since their peak in 2004. In the face of a continual erosion of the value of their homes and the ever present warnings about the biggest slow down since the great depression, it is little wonder that US consumer confidence figures came out at record levels. Today’s reading of 38.0 is the lowest in the indicator’s history going back to 1967.

Markets are still extremely jittery as evidence by today’s wild ride on Volkswagen which temporarily became the world’s largest company by market capitalisation, overtaking ExxonMobil for a short while as it rose above 1,000 Euros this morning. Just two days ago, it was trading at 200 Euros. Porche increased their stake in the company to 75%, but the real reason for the huge spike was the squeeze on short traders. Volkswagen has the highest short interest of any stock on the German DAX index. Although shareholders in Volkswagen are rather happy right now,
today’s spike is more a symptom of the lack of liquidity in today’s
market place. The German DAX is the best performing index today, largely on the back of the Volkswagen move.

BetOnMarkets
 
BetOnMarkets Morning Report

The FTSE currently indicates a very strong opening, as the global rally continues. The buying which started late in US trading and resulted in the SP500 to close up almost 11 percent, is poised to continue this morning in London. Although its too early to celebrate, traders are seeing signs that the credit market, which earlier this year paralyzed the stock markets, is easing up. While we are not certain if this was the bottom of the barrel, what we are certain of is that volatility will continue.

Commodity traders will be waiting until the inventory report by the US energy department is released before deciding the next short term direction for oil. While there are worries that a global slow down will cause the demand to fall faster, the OPEC cuts supplies for the near term oil should be helped by the cold weather that has hit the US this week. Look for oil to stay above 63 dollars until the inventory report is in.

BetOnMarkets
 
BetOnMarkets Afternoon Report

Today’s rally has helped ensure that October 2008 is spared the embarrassment of being one of the worst months on record, but we are far from being out of the woods yet. Since September there have been two rallies of today’s magnitude on the FTSE and in each case, the gains were wiped out in just over week. October 13ths big rally promised much but the day’s gains were reversed within just three days. Although October could mark an intermediate term low point, it is highly unlikely that it will be plain sailing from here. What is more likely over the next 3-6 months is continued volatility with many more days rising or falling by 5%. If (big if) we can get some follow on buying from here over the next week or so, we could continue to back and fill higher over the next few months.

Before this can happen, markets face a very harsh test with the US interest rate decision this evening. Currently a cut down to 1% is the most likely scenario, though some are calling for a cut down to 0.75%. Although this may happen eventually, we believe that a cut greater than 0.5% this month is less likely than people think. The continued improvements in the credit markets are a factor, the Fed may fear using up all their bullets too soon as Japan did after their economic boom turned to bust in the 80s and 90s. When rates reach 0% there is nowhere else to go.

BetOnMarkets
 
BetOnMarkets Morning Report

The FTSE currently indicates a flat opening, as comments from David Blanckflower, policy maker for Bank of England, hit the wire regarding an impending rate cut in UK. The main concern is if the BOE were to slash rates drastically, it could possibly result in a case of hyperinflation. However if no interest relief is offered UK could face the prospect of a relatively deep and long-lasting recession. After scanning the indicated opening prices of the major European equity markets, there is a strong chance that the FTSE will be in positive territory at the opening.

Commodities got a boost last night, as the value of the US dollar took a hit. Oil jumped 4 dollars per barrel, as traders are hoping that cheaper credit will jump start the economy and increase demand. Gold gained on after the rate cut, as investors are yet again running for the safe haven of precious metals, amid uncertainty in the US credit markets.

BetOnMarkets
 
BetOnMarkets Afternoon Report

Today’s US GDP figures hit the headlines, showing that the US economy shrank by 0.3%, the most since 2001. The figure was actually not as drastic as initially expected and as a result, markets have managed to hold on to the morning’s gains. Aside from the market’s reaction to US GSD figures, expectations of a rate cut from the bank of Japan tomorrow has sent Asian markets soaring over the last three days and the rest of the world has been rallying hard with them. The Nikkei is currently up a staggering 26% since Tuesday alone, thought it will have to do the same again and more to recoup the 33% losses since the start of the 3rd quarter.

In the UK, the energy sector is being pulled in different directions. The previously soaring energy prices helped Royal Dutch Shell to report a better than expected 71% jump in 3Q profits, yet their share price is down around 4% on the day. Investors are less interested in the profits shell has just made, and are more concerned about the prospect of future growth. Judging by today’s share price reaction, investors see much lower profits in the future now oil has turned the corner. On the other hand smaller UK oil services companies such as Petrofac and Amec are performing well today. There is speculation that these support companies might be better able to ride out lower oil prices with their lower cost base and reduced direct exposure to oil prices.

BetOnMarkets
 
BetOnMarkets Morning Report

The FTSE currently indicates a lower opening, as a worse then expected consumer confidence report has thrown ice water on the recent rally. The survey shows that consumers are spooked and are delaying major purchases. This is not good news for retail stocks, which are expected to open weaker this morning. There is a chance that the FTSE will incur a case of profit taking today to close out the week

The boost that oil received on Tuesday after the interest rate was cut, was short lived as crude oil finds itself trading below 65 dollars per barrel again. The end of the month will mark the biggest single month drop since trading started in 1983. We expect a quiet day to end out the week.

BetOnMarkets
 
BetOnMarkets Afternoon Report

Global markets opened the day around and two percent have made little headway throughout the day. Some have attributed today’s sell off to the market’s dislike to a having a democrat president, but there is little evidence to suggest this. Statistics show that markets have no significant reaction to either party winning the presidency one month on from election today. Today’s sell off is more a function of the stellar run global equities have been on since the end of last month. The FTSE has managed to finish higher for eight days on the trot, which is a very rare event indeed so it is understandable that traders are taking the opportunity to book profits.

UK banks are for once out performing the wider markets as credit conditions continue to improve and speculation mounts that the Bank of England might be considering a whole percentage point cut tomorrow. Last week, a 0.5% cut was the clear favourite course of action, but as the week progresses there is increasing chatter that the MPC will go the whole hog.

BetOnMarkets
 
BetOnMarkets Morning Report

The FTSE currently indicates a very weak opening, as traders await the announcement from The Bank of England regarding a rate cut. Traders worry that the BOE might not cut aggressively enough to help the economy out of this slowdown. However an over aggressive cut would unleash hyperinflation, which will hurt the consumers as their buying power will evaporate. If we get a 50 basis point cut, it is possible for the FTSE to open the day in positive territory.

A surprising increase in the inventory of gasoline was the cause for the 5 dollar per barrel drop in yesterdays trading. While the demand continues to fall, we expect a few more weeks of growing inventory before the OPEC cuts finally affect the price per barrel. We still expect oil to continue to fall towards the 60 dollar per barrel level.

BetOnMarkets
 
is this for forex

Hi Erik,

Is this for forex? It seems more like stock index related. It also seems like it is more to the UK. Do you use this info to trade forex and what session?

Thank you

J
 
Back
Top