UK House Building Stocks Tumble as Carney Scraps Lending Scheme

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Stock Market Trading

: 29 November 2013

We are set to see a fairly flat open in Europe as traders sit on the sidelines and wait for further clues about the state of the economy.

American equities will be re-opening after Thanksgiving but will only be open for a few hours.

This will act as a brief window of opportunity for traders to adjust positions before Monday's trading session which will see the release of PMI manufacturing data for the big European economies.

Following yesterday's choppy afternoon session, the FTSE was dragged into positive territory, although British confidence fell for a second consecutive second month; the first time it's done that in two years.

Fears over the nation's optimistic property market remain as Mark Carney made a move to scrap a lending scheme to boost mortgage borrowing.

With the Governor talking about ways of controlling the current boom in house prices, house building companies immediately turned south.

The FTSE 100 has been consolidating around the 6650 mark for more than two weeks and yesterday was no exception, with the index rising just 6 points to 6648.

This was exacerbated by the Thanksgiving holiday in the US, which meant that trading volumes on this side of the Atlantic were rather light.



Stock Market Trading

: 28 November 2013

Europe is set to see a mixed open today, with positive German consumer confidence data giving the DAX a boost, whereas the CAC and the FTSE look set to slip lower.

Trading is expected to remain fairly flat over the next week for the FTSE as the markets move their focus back towards company performance.

The overall outlook for the UK economy remains strong, with GDP figures for the third quarter still on track to grow by 0.8% and unemployment relatively low.

Contradictory economic data in the US kept share prices in check yesterday.

Durable goods orders were weaker than estimates, but jobless claims figures showed a resilient employment sector which, when coupled with rising consumer sentiment, counterbalanced the initial weakness.

As a result, ahead of the Thanksgiving Holiday, the Dow Jones closed flat at 16,089 but has found the strength to edge higher in overnight futures trading.

US investors will now shift their focus onto next week's Non-Farm Payroll figures, with the bears expecting the Dow's strong run to come to an abrupt halt at the first sign of tapering.

Nevertheless, the Dow's historic run will be on hold as the Thanksgiving holiday means that US shares will be closed today and only open for a couple of hours on Friday.



Stock Market Trading

: 27 November 2013

The DAX and CAC look set to open higher today, recovering some of the ground they lost just before last night's close.

Traders will be keeping a keen eye on revised third quarter UK GDP figures, with questions remaining as to whether the central bank will consider tightening monetary policy in the near future.

Many believe that the UK growth figures may not live up to the expected 0.8% after comments from Mark Carney that the BoE will not necessarily increase rates if unemployment were to fall below 7%.

In the US, focus will be on a wide range of figures coming out on the eve of the Thanksgiving holidays, including reports on durable goods orders, mortgage applications and initial jobless claims.

The figures may help give the Fed some insight on the current health of the US economy in order to determine when to cut back their $85 billion/month stimulus package.

Amid choppy trading, US stocks moved higher as better than expected building permits spurred a rally among homebuilders.

At the same time though, Americans grew more pessimistic in November, as indicated by a seven month low in consumer confidence, which negated the earlier gains.

As a result, the Dow Jones finished rather flat at 16,086.



Stock Market Trading

: 26 November 2013

European markets are expected to edge slightly higher on Tuesday, with economic data pointing towards a slow but steady recovery in Europe.

The outlook for stocks remains strong, but a reduction in flows to stock funds and outflows in higher-risk areas are signs that some investors are beginning to take profits ahead of future uncertainty.

American equities look set to continue climbing, with investors taking solace in the fact that the Fed appears set on keeping their stimulus package for a while longer.

Having said that, some traders remain cautious ahead of November's jobs report, thinking that it may well provide a more accurate assessment of the economy.

The Dow Jones posted yet another record high yesterday, reaching 16,123.5 early in the day, following Iran's agreement to limit its nuclear program.

Trading was rather choppy for the rest of the session, with any mini rally being interrupted by quick profit taking that brought share prices back down.

Ultimately, the Dow ended the session 29 points higher at 16,082.



Stock Market Trading

: 25 November 2013

With stocks trading at an all-time high, volumes look to be pretty low in what is a holiday shortened week as America celebrates Thanksgiving on Thursday.

US markets are set to continue climbing into uncharted territory, with a historic deal being reached to curb Iran's nuclear programme.

This agreement may spell bad news for oil investors as crude prices are set to fall with the influx of Iranian oil into the market.

European equities are set to open fairly flat on Monday as investors ponder about the prospects for economic growth and monetary policy.

Declining UK unemployment is an encouraging sign for the economy, however, caution remains as low levels of inflation within the Eurozone may act as a drag on British growth.

As a result, traders are looking ahead to this week's GDP figures which may act as a gauge for the durability of the UK recovery.

Last week's encouraging US retail sales data and employment figures kept the American rally intact on Friday, with equities rising for the seventh week in a row.

In particular, the Dow Jones climbed another 46 points to 16,051.5 as investors appeared to discard the possibility of a cut in monetary stimulus during 2013.

If anything, the rally seems to be gathering speed, as the news of the Iranian deal has already pushed Dow futures to a fresh all-time high this morning.


By Jonathan Sudaria, 29 November 2013


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