New Financial Website. Try it Now!

Tuesday, April 14, 2009

BetOnMarkets Afternoon Report

The FTSE is unchanged on the day, but is still managing to outperform US
markets today. This is largely due to playing catch up to Thursdays late
rally on US markets and Monday's stock market closure.

In the UK, banks are up nicely after Barclays announced it may open up
BGI to bidding. This in turn could draw out higher offers for iShares,
which pleased many shareholders who believed Barclays should have held
out for a higher offer from CVC or other bidders.

Early news of Goldman Sach's $1.8bn profit created some excitement in
early trading, but this sentiment h slipped firmly to reverse after an
analyst's conference call highlighted some curious accounting changes
behind the numbers. Goldman's changed their accounting period to January
from December for the first quarter, which removed the effect of their
AIG exposure on earnings. Removing December strips out lots of losses
and write offs and it is little wonder than Goldman's sank in early
trading as this analysis was discussed.

This has taken the sheen off early market sentiment, but overall it
markets are still feeling their way back after the long weekend and are
consequently largely unchanged on the day.

Thursday, March 19, 2009

BetOnMarkets Afternoon Report

The massive influx of money from the US Fed and Treasury has led to a
substantial increase in both crude oil and gold prices today. Crude
prices have pushed higher and look set to register the first meaningful
move about the $50 level since the start of 2009. Gold endured a
remarkable days trading yesterday and is trading up at $955 on the day
today. It is no coincidence that these two markets are trading higher in
tandem as they are both linked with inflation expectations. Gold is
traditionally seen as an inflation hedge while oil is a barometer for
global economic activity. With the Fed turning on the printing presses
yesterday, inflation fears are once again creeping into investor's

The Fed's plans have been described as a shock and awe tactic, a phrase
used to describe the initial stages of the conflict in Iraq. Yesterday
was certainly a shock with the dollar registering its 3^rd biggest
single day decline ever. However, equities markets aren't exactly in awe
today as investors fret that like the Iraq conflict, there are no plans
in place to tidy up the inflation mess that could be round the corner.
The Greenback's weakness has dampened what would have been an excellent
day for oil majors such as BP which derives much of its income in the
form of US dollars. This has taken the shine of the early promise from
European markets. Surprisingly it is financials that helped to push
markets into the black on the back of the news that Citigroup is going
to perform a reverse stock split. Citi is now down on the day, but
Barclays, Lloyds, RBS and HSBC are all performing well today. The
success of HSBC's rights issue may have also encouraged financials.

Tuesday, February 17, 2009

BetOnMarkets - Today, world stock markets have crumbled under...

Today, world stock markets have crumbled under the relentless barrage of bad news. Investors are flocking to safe havens with the yield on 10 year Treasury bonds sinking to 2.7% and gold pushing up 3% to $370. The Dow Jones Industrial average is just over 0.5% from revisiting the November lows. Despite the dramatic collapse in the banking sector, the FTSE has held up relatively well over the same period, holding around 6% above those lows.

There’s very little for the bulls to hang their hat on at the moment, everywhere you look, the risks seem to outweigh the rewards of investing in the stock market. Banks are again leading the fallers today with Lloyds and HSBC being singled out for punishment. HSBC is down 7% on speculation that it may have to raise more than $15bn to cover write downs and exposure to Eastern Europe. Oil majors, BP and Shell are also under pressure with oil prices touching $35 dollars once again.

In the US, automakers GM and Chryslers still battling to avoid oblivion. The US automaker industry is hanging by a thread. Further support is required to turn the sector round, but this is far from being a dead cert. Legacy costs from benefit support are now crippling the likes of GM. It is ironic that the great US economy is in danger of losing a key industry in part due to lavish benefits negotiated for union workers.

It is also worth noting that like many firms across the world that have gone to the wall, like Woolworths in the UK, US automakers were in trouble before the crisis broke. This global recession, like all recessions is exposing the weak businesses what they really are. It remains to be seen if the remaining companies have enough strength to carry the world economy through the crisis.

Monday, February 16, 2009

BetOnMarkets Morning Report

The FTSE is currently indicating a weaker opening, after the rightmove house index showed a 9.1% drop in year over year in home prices. While Monday is expected to be a quiet day, with North America on holiday, Tuesday promises to be a day full of volatility. Between the CPI and retail sales data, we should get a good picture at how the British economy is doing.

Crude oil is trading near the $38 a barrel on speculation that the recession in the world's largest economies will slash demand for fuel and energy. Reports today showed that Japan??s economy, the world's largest oil consumer after the U.S. and China, shrunk at the fastest pace since 1974. Oil prices are likely to trade below the 40 dollars per barrel level until the inventory report later this week.

Tuesday, February 10, 2009

BetOnMarkets Afternoon Report

Just a short note today -- Effectively markets are on hold pending the
details of US Treasury Secretary Geithner's bank recovery plan an 4PM.
There's also the small issue of the $838 billion stimulus plan which is
going before the senate. Obama last night said that the world's largest
economy faces a 'full blow crisis'. While this may be a statement of
fact, it is hard to know if the intention behind such a stark statement
is partly to facilitate the passing on the new stimulus plan.

In the UK, former RBS chief executive, Sir Tom McKillop wins the award
for understatement of the year with his admission that the purchase of
ABN was a 'bad mistake'. The lion's share of RBS' record losses and
indeed UK the government bailout have been swallowed up by this
disastrous takeover.