In the US stocks retreated more than 2 percent on Wednesday and bond prices rose after two reports suggested the economy is not bouncing back as quickly as investors hoped. The Dow fell 184.22, or 2.2 percent, to 8,284.89, while broader stock indicators sank even more sharply. The Standard & Poor’s 500 index fell 24.43, or 2.7 percent, to 883.92, while the Nasdaq composite index declined 51.73, or 3 percent, to 1,664.19. The decline put the S&P 500 back into the negative for the year to date. The Commerce Department said retail sales unexpectedly fell in April for the second straight month. Economists predicted April retail sales would be flat, but instead they fell, and March’s sales decline was revised to an even larger drop. RealtyTrac Inc. reported a troubling rise in home foreclosures. RealtyTrac data said April’s foreclosures were up 32 percent from a year ago, and up slightly from March. It was the second straight month that more than 340,000 U.S. households received a foreclosure filing. In Forex related news yesterday we had BOE Governor Mervyn King delivering a rather downbeat Inflation Report in the UK yesterday which ended the GBP’s recent gains. In the US we had Core Retail Sales m/m and Retail Sales m/m come in lower than expected. We also had EU Industrial Production m/m falling below expectations. Britain’s top share index closed down 2 percent on Wednesday, following disappointing U.S. retail sales figures, banks knocked by profit taking and mining stocks weighed down by weak commodity prices. The FTSE, writes Greg, 100 ended down 94points at 4,331 retreating for the third straight session. The benchmark index is down 2.3 percent so far this year but up 25.2 percent since hitting a six-year low on March 9. Global market strategists believe that this setback is probably due to profits being taken after a long rally like this. No new stock trades
Yesterday – notes Greg Secker – the FTSE 100 closed down 9 points to close at 4,425. The index is hovering around the 200ema following the high-test bar on Thursday. This bar marked the end of 5 consecutive green bars. The FTSE, writes Greg, 250 has powered through her 200ema and is gaining support from the 10ema showing there is more strength in the 250 than the 100 at the moment.Â
Stateside, the Dow rose 50.34, or 0.6 percent, to 8,469.11 after falling 155 on Monday. The S&P 500 index slipped 0.89, or 0.1 percent, to 908.35 and the Nasdaq composite index fell 15.32, or 0.9 percent, to 1,715.92. Stocks ended mixed but well off their lows on Tuesday as early concerns about a barrage of stock offerings eased and as rising oil prices lifted energy stocks. The financial stocks that pounded the market to 12-year lows in March and then led the bounce higher fell for a second day. Even after sliding this week, bank shares have roughly doubled since early March, as measured by the KBW Bank Index. The fluctuations came as some traders worried that the economic recovery won’t be as brisk as hoped when stocks were posting big gains over the past eight weeks.
In forex-related news yesterday we had a range of good results in the UK with Manufacturing Production m/m, Trade Balance, Claimant Count Change, Average Earnings Index 3m/y, Industrial Production m/m and RICS House Price Balance all coming in better than expected. The only lagging UK figure yesterday was the Unemployment rate which increased to 7.1%. Cable strengthened as a result closed at 1.5264. Elsewhere, we had good Trade Balance and neutral Federal Budget Balance results in the US, good Trade Balance figures in Canada and good Home Loans m/m figures in Australia. The Fed Budget was also announced in Australia. Today we have the BOE Inflation Report due in the UK, which will be important. We also await Core Retail Sales m/m and Retail Sales m/m from the US.
Britain’s blue-chip index closed 26.59 points lower at 4,435.5, after rising more than 5 percent last week, with weaker raw material prices hurting oil producers and miners. However, drugmaker AstraZeneca and utility Centrica offered support. The British benchmark is flat for the year, but has rallied more than 28 percent since hitting a six-year low on March 9. Traders at IG markets commented that ‘there was less correction than expected tpday after the rally in the last couple of weeks. ‘There also seems to be resistence at around 4,400 level and there is perhaps hope to continue going for another week. Volumes on the FTSE 100 were at 90 percent of the index’s 90-day average daily volume. Index heavyweight oil producers took most points off the index as crude prices fell below $58 a barrel.From the US, financial stocks sent the market into reverse yesterday, with traders selling stocks lower worrying that the market and financials in particular had risen too quickly since the rally began two months ago. Trading was light compared with last week suggesting that many buyers were taking a break, and not that sellers were out in force. Technology shares fared better after Microsoft Corp. moved ahead with its first-ever debt offering.  That had some analysts suggesting that the retreat was a natural pause after a big run, something that could actually be good for a recovering market. The Dow fell 155.88, or 1.8 percent, to 8,418.77, while the Standard & Poor’s 500 index fell 19.99, or 2.2 percent, to 909.24 and the tech-focused Nasdaq composite index fell 7.76, or 0.5 percent, to 1,731.24. Despite Monday’s slide, the S&P 500 is up 34.4 percent from early March, but still down 42 percent from its high in October 2007. There was little data/news of note yesterday but today we have a series of Forex-relevant data releases. In the UK we are expecting a slight improvement in 3 figures; Manufacturing Production m/m, Trade Balance and Industrial Production m/m. In the US the Trade Balance figure is expected to weaken, however, the US monthly Federal Budget Deficit is expected to improve. Canadian Trade Balance figures are also due for release today.
The FTSE 100 is up 5 percent this week and enjoyed its best monthly run in six years in April. The index is 14 percent ahead overall for this quarter. The UK blue chip index ended 63 points higher at 4,462 on friday after closing 2 points ahead at 4,4398 on Thursday. The index is in positive territory for the year after surging 29 percent since its six-year trough on March 9. Gains in resurgent banks and energy stocks were the main cause to push the FTSE to a four-month closing high on Friday, maintaining the strong positive momentum seen since early March.U.S. jobs data showed that 539,000 jobs were cut by employers in April, the smallest reduction since October, signalling some improvement in the labour market. Oil stocks added the most points to the index, gaining ground with crude prices topping $57 per barrel. With metal prices also getting firmer, miners also rose.
In Forex related data releases on Friday we had positive figures from Germany, Canada and mixed PPI data from the UK but, most importantly, the US Non-Farm Payroll figure was better that expected at -539K. Today is a low news day with nothing of note being released.
The Dow rose by 164 points to 8,574 on Friday, finishing the week up 4.4 percent and scaling back its losses for 2009 to only 200 points. It was the eighth gain for the index in nine weeks. The Standard & Poor’s 500 index rose 21.84, or 2.4 percent, to 929.23, and the Nasdaq composite index rose 22.76, or 1.3 percent, to 1,739.00. For the week, the S&P 500 index jumped 5.9 percent, while the Nasdaq composite index rose 1.2 percent. Bank stocks drove Friday’s advance. Investors were relieved that 10 of the 19 companies will need to raise about $75 billion in new capital as a buffer against losses if the economy worsens. Further fuel for the ascent came from news that job losses slowed in April. The Labor Department said employers cut 539,000 jobs last month — the fewest in six months and much fewer than analysts had expected.
Stocks were sharply higher after the Bank of England kept rates on hold and expanded quantitative easing but retreated in volatile afternoon trading, tracking weakness in U.S. stocks following downgrades in the telecom sector. Britain’s FTSE ended 2 points higher at 4,4398 after touching a high of 4,520 for the session. It is in positive ground for the third straight day. Weakness in stocks of telecoms heavyweight Vodafone swept away early gains from optimism on the outcome of U.S. bank ’stress tests’, leaving Britain’s blue chip index flat at Thursday’s close. Mic Mills, a trader at spread betting firm ETX Capital reported that the afternoon was just a matter of everything being overbought and a bit of profit taking occurring. Trade was heavy with 163 percent of the average volume of the last 90 trading days transacted.
Stateside, Wall Street slid yesterday following a surge earlier in the week and as traders awaited the release of the government report on the nation’s biggest banks (the ‘stress tests’) and for April’s Non Farm Payrolls released later today. Stocks began the day higher but quickly reversed as investors looked past upbeat reports on the job market and retail sales and decided to cut their holdings following what had been a 4.8 percent gain this week for the S&P 500.
The Dow ended down 102.43, or 1.2 percent, to 8,409.85 yesterday, a day after the blue chip jumped 102 points to close above the 8,500 level for the first time in four months. The S&P 500 index fell 12.14, or 1.3 percent, to 907.39, and the Nasdaq composite index fell 42.86, or 2.4 percent, to 1,716.24.
This is a high news day for Forex, so traders should steer away from trading. At 9.30 we see the GBP PPI Input (Producer Price Index) numbers released, previously 1.0% and forecast at 0.7%. At 12:00 we see news from Canada, with Unemployment Rate figures, previously at 8.0% and forecast at 8.3%. Simultaneously, numbers for Canadian Employment Change are released, previously -61.3K, expected at -48.5K, and also Housing Starts, previously 147K and expected slightly down at 140K. At 13.30 we have the highly anticipated US Non-Farm Payrolls numbers for April, previously -663K and expected at -590K, better than previous.
Britain’s top share index gained 1.4 percent on Wednesday to close off with its highest closing level in nearly four months, led by banks and commodity stocks and buoyed by slower job losses in the United States. The FTSE, writes Greg, 100 closed 59 points higher at 4,396 after trading as high as 4,437 earlier in the session. The UK benchmark was down 0.9 percent for the year but has rallied 27 percent since hitting a six-year low on March 9. [05:04:59] Manuela Robson: Dow for the morning briefing……From the US, the Dow Jones industrial average jumped 100 points, or 1.2 percent, to 8,512.28 in heavy trading volume, closing above the 8,500 mark for the first time since 9 January, leaving the Dow down only 3 percent for 2009. The S&P 500 index rose 15.73, or 1.7 percent, to 919.53, while the technology-heavy Nasdaq composite index had a more modest gain, rising 4.98, or 0.3 percent, to 1,759.10.
Bank stocks pulled the market higher yesterday as media reports suggested that balance sheets at major lenders might not be as bad as some had feared and investors felt more confident putting their money into banks on the eve of the government ‘bank stress test’, aimed at determining which banks need to raise more capital.
The news on banks and a surprise drop in a report on unemployment provided further confidence to a market that has rallied higher in the past two months amid signs that the economy is stabilizing. It was a big Forex news day yesterday with largely positive economic figures being released in Australia, the US and the UK. In the UK we had the Services PMI Index jumping to 48.7 and the Nationwide Consumer Confidence Index reaching the all-important 50 level. Cable broke and closed above the key 1.5000 level.
Britain’s top share index rose in early trade on Tuesday to touch a near four-month high and to close at 4336, taking its cue from a rally in the U.S. markets with banks and heavyweight commodity-related stocks leading the way.By 0729 GMT, the FTSE 100 was up 93.85 points at 4,337, catching up with gains from its continental European peers the previous session when it was closed for a public holiday.The UK index is down 2.2 percent for the year but has rallied 25 percent from a six-year low hit on March 9. Banks were the best performing sector, lifted by gains among U.S. peers overnight.
The Dow fell 16.09, to 8,410 on Tuesday, while the S&P 500 fell 3.44 to 903.80, leaving the major indexes with fairly modest losses. Stocks held on to most of their gains from Monday, which saw the S&P 500 recoup the last of its losses since the beginning of the year. Many analysts believe that it is good for the market to pause after a big rally, especially considering that Wall Street has had its best two-month performance in nearly 35 years.
In Forex news yesterday, we had positive figures from both the US (ISM Non-Manufacturing PMI) and the UK (Construction PMI). In Austarlia interest rates remained on hold at 3% and Building Approvals m/m were slightly better than expected. By contrast, the Swiss SECO Consumer Climate Index fell sharply to -38. Today we have lots of high impact data releases. The highlighs are the Halofax HPI m/m and the Services PMI in the UK and the ADP Non-Farm Employment figures from the US. Elsewhere, key figures also coming out for the NZD and AUD.
Britain’s top share index was flat by the close of holiday-thinned trade on Friday as gains in miners offset profit-taking in energy and defensives following sharp gains the previous two sessions. The FTSE, writes Greg, 100 index closed at 4,243.22 after gaining 1.3 percent on Thursday. The UK’s blue-chip index in April posted its biggest monthly percentage rise since 2003 and is up 22.6 percent since a six-year low point on March 9.
Analysts are slightly more optimistic on the economic outlook after some improved data. Defensive pharmaceuticals and tobacco stocks were the biggest drag on the index with AstraZeneca leading the pack followed by GlaxoSmithKline and British & American Tobacco.
Stateside, the Dow Jones industrials shot up more than 200 points and had their first finish above 8,400 since 13 January, while the S&P 500 rose 3.4 percent on Monday and eradicated the last of its losses for 2009.
A double dose of good housing news ignited the advance: Pending U.S. home sales rose more than forecast and had their second straight monthly gain, while construction spending rose unexpectedly in March after five consecutive declines.
This added further momentum to a rally that began on 10 March – with Monday’s gain, the S&P has soared 34.1 percent in the 39 trading days since the rally began, its steepest gain over that many days since 1933, while the Dow is up 28.7 percent.
The S&P 500 is now up 0.4 percent for 2009, while the Dow is still down 4 percent for the year.
Yesterday – notes Greg Secker – , Monday 4th May, was a Bank Holiday both in the UK and Japan. Elsewhere, figures were released in the US for Pending Home Sales m/m and Construction Spending m/m both showing an unexpected and significant improvement. In Switzerland the PMI (SVME) index was also more positive than expected. In Germany, however, Retail Sales m/m weakened as did the Australian HPI q/q which indicated a 2.2% fall in Australian house prices in the past quarter.
In Forex-related data due for release today Australian Building Approvals m/m are expected to show a large contraction and AUD interest rates are expected to remain on hold at 3%. In the UK we have the Halifax HPI m/m due for release today and is expected to show a slowdown in house price deflation. Also in the UK today the Construction PMI is expected to show a small improvement as is the UK Nationwide Consumer Confidence survey. In the US today the important ISM Non-Manufacturing PMI is due for release and is expected to increase to 42.5 getting closer to the key figure of 50.0 which would be indicative of US services sector expansion.
Overall, a very heavy news and data week this week so care required when trading.
The FTSE 100 continued it’s journey into the bull territory yesterday as the banks rallied hard. Barclays climbed to it’s highest level since early October, rising 9.8 per cent. The index is now 20 per cent up from it’s recent lows of 3512 in early March.Yesterday – notes Greg Secker – the Dow closed at 8,168 forming a high test bar, the Nasdaq closed at 1,717 gaining resistance from the 200ema, and the S&P 500 closed at 873 forming a high test bar. A range of news was released yesterday, including a wide variety of company earnings. This combined with the ongoing swine flu is causing the markets to pause slightly during the ongoing uptrend.Forex News: Today is bank holiday for many European countries. Trading will resume from Tuesday. The EURUSD formed topped at 1.3383 but further bullish scenario was rejected as the pair whipsawed to the downside, hit the bottom at 1.3192 and closed at 1.3228 forming a high test reversal bar.
