BetOnMarkets Market Reports

BetOnMarkets Morning Report

The FTSE is currently indicates a weaker opening as traders await the release of the UK trade balance numbers. While the weekend nationalization of Freddie Mac and Fannie Mae in the US gave the FTSE and every other equities index a boost on Monday, it was very short lived, as the FTSE finds itself exactly where it was last Friday. It seems like traders are not satisfied with the take over and are worried that nothing changed in the mortgage debt market.

Oil keeps taking in on the chin as it seems like every hurricane starts to weaken before hitting the important oil producing fields. Not helping is the stronger US dollar which keeps making the oil contracts cheaper.
It is possible that we can see prices below 100 dollars per barrel this month.

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BetOnMarkets Morning Report

The strong US dollar continues to cause havoc for the commodity sector. With gold now trading almost 300 dollars below its 52 week high, set in the spring. The main culprit for this sudden reversal is the strong US dollar, which has gained more then 15 cents versus the Euro. Look for the precious metals sector to continue to lose value as traders sell gold and invest in the all of a sudden strong US dollar.

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BetOnMarkets - Hurricane Ike missed

The FTSE currently indicates a very weak opening. The take over of Merrill Lynch is probably a contributing factor. Over the weekend yet another takeover has been orchestrated by the US government, where a top four investment bank, is now the property of Bank of America. Look for a small recovery when trading starts this morning, however we are probably going to spend the rest of day in the red.

Oil traders did not get the boost they were hoping for. As Hurricane Ike missed taking out the important oil fields and oil futures are now trading below 100 dollars per barrel. We are anticipating that the price of crude will keep falling, even as OPEC cuts productions by half a million barrels per day.

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A week that showed so much promise ended up being a huge let down. A lot of ink was spent on the take over of Freddie Mac and Fannie Mae by the US government, and it allowed equity markets around the world to open the first trading day up 3%. This sadly didn’t last, as traders realized quickly that this take over was akin to putting a band-aid over a third degree burn; it was not a long term solution.

The theme for next week is inflation, as UK, EU and USA are all releasing some sort of inflation numbers. This is important for traders of Equities, Futures and Forex as these numbers will have a strong effect on each of those categories. We expect inflation to be high in every country, as rising commodity prices are filtering into the consumer prices at this time of the year. Also on a side note, this Wednesday, the Bank of England will be releasing minutes from their last meeting, while most of the information is stale; there are a few useful titbits which can give you a glimpse into the future about the BOE’s concerns when it votes on a rate decision.

There is uncertainty in the equities market; smart traders use every move up to short the overall market. The most obvious sign that the market is jittery came on Monday, when in the middle of a huge run-up, a stale story of a bankruptcy filling by American Airlines caused a huge dip in the major indexes.

As a result, traders at BetOnMarkets believe a one touch to the down-side of the Wall Street index is the best value play out there. A one touch at 11200 on the Wall Street Index (Dow Jones) with a 14 day term returns more than 22% ROI.

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The FTSE is currently indicating a high opening. Investors around the world are breathing a sigh of relief after it was announced that the US government bailed out AIG. The announcement has bumped up the FTSE to more then 1% in the pre-open markets.

Oil tried its hardest to breach the 90 dollars per barrel mark, however support finally came back into the market, allowing the price to rebound and is currently trading at more then 94 dollars per barrel. Look for the price of oil to be volatile today as the inventory numbers will be very unpredictable

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Traders, investors, and financial journalists must have been glad to reach the end of a week that will surely go down in the history of financial markets. The FTSE closed the week just 66 points down which the S&P 500 actually managed a small profit. Homeowner, the closing figures do not even begin to tell the whole story with the FTSE trading in a 521 point range and posting its best one day rally in history on Friday.

The turmoil began last week with the bail out of Fannie Mae and Freddie Mac. This raised hopes of a similar bail out of the Lehman Brothers. To say that investors were shocked when Lehmans was not only denied a bailout, but filed for insolvency would be an understatement. Lehmans collapse sent shockwaves throughout equity markets sparking a domino effect that knocked over Merrill Lynch, AIG and HBOS .

Even the most seasoned investors had a hard time steadying themselves last week as the newswires continue pump out dark news, and once in a generation headlines. Fear was understandably widespread with the Russian stock market suspended indefinitely after dropping 10% in an hour, and a large money market fund breaking the buck, meaning they lost their unit holders money. When the supposed safe havens of money market funds start to break down, investors see little choice but to fly to quality. There is a flood of assets transferring to safety of short term US Government Treasuries, forcing the yield on three month Treasury Bonds down to their lowest level since the great depression. Gold endured a remarkable week trading in a $140 range before closing the week up around $90.

On the economic data front, US CPI was in line with expectations, and oil prices have continued to stay below $100. Both of these factors indicate that the inflation monster may be coming back under control. However, the FOMC voted to keep rates on hold last week, initially markets had a mixed reaction. Many believe the Fed has now left itself some ammunition to deal with a weakening economy further down the line. It also sent out the signal that it would not be influenced by market makers into cutting rates as they did back in July.

It was the two emergency announcements on Wednesday and Thursday that had the greatest impact last week. After central banks dropped a coordinated liquidity bomb overnight on Wednesday, global equity and credit markets initially seemed to show a very cautious reaction. The greatest reaction seemed to come from the Feds plan to create a giant bad bank that would absorb many of the toxic subprime assets held by banks. This measure accompanied with a crack down on short sellers, seemed to have hit the nail on the head for the financial institutions, with the root cause of the credit crunch (sub prime assets) being attacked.

Next weeks headlines will be dominated by Ben Bernankes testimony before congress starting on Wednesday. We also have US existing home sales on Wednesday and new home sales on Thursday. However, the planned economic announcements could be secondary to any surprise headlines or further emergency measures. When stock markets move percentage points in the matter of minutes, anything can happen.

Although equity markets bounced last week, the panic at one stage reached such an extreme that the yield on 3 month US Treasuries reached 0.02% on Thursday, returning just $2 on a $10,000 investment. Investors werent just running to safety, they were blindly staggering to anywhere with no exposure to the credit markets. When investors press the panic button as they undoubtedly have done, there is potential for a counter rally to set in the short term as we saw on Friday. However, looking at large crashes from 1987, 1997, 1998, 2000 and 2001, the follow on reaction is typically a range bound market. A barrier range trade returns a profit if neither of two predetermined levels are hit within a specified time. A barrier range trade predicting the Dow Jones not to touch 12200 or 10500 over the next 16 days could return 39%.

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BetOnMarkets Morning Report

The FTSE is currently indicating a flat opening, after economic data showed that UK house prices fell for the fourth month in a row. This negative news was like a punch in the gut for the FSA after their restriction on shorting, boosted the FTSE on Friday.

Crude oil got a boost in the last few hours of trading on Friday, closing just under 105 dollars per barrel. The move was mainly due to the weakness in the US dollar. Traders are worried that the latest bailout by the US government will have a negative effect on the greenback and can see the GBP/USD trading at 2.00 dollars per British Pound by Christmas.

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BetOnMarkets Morning Report

The FTSE is currently indicates a flat opening as traders wait for the release of the European IFO numbers. While this is not UK data, it will affect the FTSE depending on how strong the number will be. After further research we believe the number will be stronger then expected. This should result in a higher opening for the FTSE.

Oil traders were at the mercy of the US dollar yesterday as the bailout bill was debated in congress. We expect the same today, with the added volatility of the inventory numbers to be released around 10.30 AM EST. It seems like the November contract is poised to break above the 110 dollars per barrel level.

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US markets have opened up in positive fashion, pulling up European markets in the process. Last night’s stark warnings from President Bush seems to have improved the chances of a deal being done before Monday of next week. While Congress sweats the detail, it does at least appear that the speech has increased traders confidence of progress, albeit with understandable caution. The news has helped boost financial stocks with RBS in the UK leading banks higher, offsetting fresh concerns about the consequences of the Lloyds take over of HBOS. Volatility appears to be low for the second day in a row, perhaps another sign of the cautious optimism creeping into the financial system. Many are expecting a ‘bailout rally’ similar to last Friday when the Bush/ Paulson plan is finally passed and while this may happen, the effect may be short lived. Once the subprime problem has been largely addressed, there is still the issue of banks being under funded and the even greater problem of a weakening global economy. The latter in particular seems to have been playing second fiddle to the problems specific to the credit markets.

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BetOnMarkets Morning Report

FTSE is currently indicating a lower opening as traders prepare themselves for the unveiling of the bailout package. There is still way to many questions left unanswered in the fine print, which is why traders are divesting of stocks that might be affected negatively by this historic event. We expect the FTSE to spend the morning in negative territory.

Commodities, which are affected by the US dollar, have been range bound, while awaiting news about the bailout. Investors believe that this bailout will have a negative effect on the US dollar, which in turn may make commodities more expensive. If the bailout is finalized tomorrow, look for oil and gold to have a very volatile day.

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