Spread Betting Markets Remain Firm Despite Poor US GDP Figures
It seems that it's not only UK politicians who can blame the weather for a lack of growth in a particular quarter.
Yesterday's US GDP data showed that not even the world's biggest economy is immune to the odd contraction.
A combination of Hurricane Sandy, the worries over the fiscal cliff and an unexpected decline in defence spending sent the economy spiralling downwards for Q4.
Whilst this brought out the sellers, they were not as aggressive as you might have thought considering the size of the decline in growth.
However, it was primarily the drop in defence spending that led to the decline and so the sellers hardly pushed the panic button.
Nonetheless, it provided financial spread betting
investors with an opportunity to take some profits, especially since the GDP data was followed by the FOMC rate announcement.
Whilst some investors had hoped that a more dovish stance would be taken by the Fed, there were ultimately no surprises and so the Dow simply drifted lower.
As expected, the Fed kept its benchmark interest rate at record lows, adding that it will continue to buy securities at a rate of $85 billion a month as long as unemployment remains above 6.5%.
By and large, the comments were a reiteration of the current stance and, as the dovish expectations were dashed, the mild selling pressure took the Dow 10 points lower to 13,910.
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.
By Simon Denham, 31 January 2013