Weak UK Manufacturing Data Inspires FTSE Slump as PMI Hits 17 Month Low

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Stock Market Trading

: 03 October 2014

The FTSE is set to open more than 30 points higher on Friday morning after having closed at its lowest level so far in 2014.

The markets experienced a heavy sell off on Thursday after ECB President Mario Draghi announced plans to begin buying covered bonds and asset-backed securities at some point in this quarter.

European stocks fell heavily after traders were left feeling uneasy as Draghi failed to give any guidance as to the size of the asset buying plan, while giving no hints about extra measures for quantitative easing.

The FTSE 100 and CAC 40 are likely to have a quiet morning as investors wait for this afternoon's NFP, with the DAX remaining closed on Friday due to a German holiday.

Equities kept plunging ahead of the September Non Farm Payrolls report, which is expected at 210k, as the Fed remains poised to end its asset buying program this month.

However, some investors clearly believed that the market had been oversold and so stepped in during the afternoon, driving a rebound.

Ultimately, the decline was only minimal, with the Dow Jones finishing just 16 points in the red at 16,803.



Stock Market Trading

: 02 October 2014

Stock markets are set to open lower on Thursday after a day that saw the bears gather momentum, with all major indices in Europe and the US falling sharply.

The FTSE 100 fell by almost 1% after weak manufacturing data saw the British PMI fall to its lowest level in 17 months.

Many in the UK spread betting markets will be hoping that the index finds some support today as investors re-evaluate the state of the British economy.

Meanwhile, a weakening manufacturing sector and low levels of inflation in the Eurozone have left investors wondering whether record low base rates will be enough to rejuvenate the economy.

Until the issue is properly resolved, the calls from those who believe that the ECB will have to turn to full scale quantitative easing are only going to get louder.

Hong Kong's pro-democracy protests highlighted that geopolitical concerns are growing in number and could start to exact a greater toll on global markets.

If that wasn't enough, we also saw the first reported case of the Ebola virus in the US.

As a result, investors decided to head for the exit, pushing the Dow Jones 191 points lower to 16,826.



Stock Market Trading

: 01 October 2014

US consumer confidence data showed an unexpected decline in September, dropping to 86 against estimates for a figure of 92.2, which pushed the Dow Jones 45 points lower to 17,015.5 yesterday.

At the same time, the S&P Case-Schiller index for US properties indicated the smallest increase in values for 12 months, which could signal renewed struggles for housing.

Following on from this, the FTSE 100 is set to open 15 points lower at 6607 on Wednesday morning.

Investors are being kept on edge by the continuing protests in Hong Kong and dipping economic performance in China.

The bears seem to have brushed off Tuesday's positive UK data, which showed that the economy grew by more than expected in the second quarter, as the ongoing protests remain the focal point of attention.

Pro-democracy crowds involving tens of thousands of people have gathered, blocking parts of Hong Kong.

Whilst things have been fairly quiet of late, many are expecting the largest turnout yet on National Day, a public holiday celebrated throughout mainland China, Hong Kong, and Macau.



Stock Market Trading

: 30 September 2014

The FTSE 100 is set to open flat on Tuesday morning as events in Hong Kong continue to play on the mind of investors.

The streets of Hong Kong were relatively quiet compared to the previous day which saw the Police firing tear gas at pro-democracy protesters.

However, crowds are expected to gather again in greater numbers on the eve of Chinese National Day.

As a result, blue chip stocks with large Asian exposure are likely to remain in the firing line this week.

Mining stocks will likely bear the brunt of the storm as China is a key export market, so Anglo American, Rio Tinto and BHP Billiton are stocks that the bears will be keeping a close eye on.

The Hong Kong protests have added another layer of risk to geopolitical tensions around the world and pushed the Dow Jones sharply lower.

Later on in the US session, a recovery in the personal spending was in line with expectations and triggered a rebound.

However, it was not enough to push the Dow back into positive territory and the index finished 47 points down at 17,060.



Stock Market Trading

: 29 September 2014

UK markets are set to open slightly lower on Monday, with investors erring on the side of caution with the rise in geopolitical tension.

The situation in the Middle East is heating up, with further western intervention looking more likely as President Obama admitted that the US underestimated the rise of ISIS.

In terms of economic data, all eyes will be on the Eurozone on Monday as traders look towards the release of German CPI and EU Economic Confidence.

Traders will be eagerly awaiting these figures after the ECB's surprising move to lower interest rates again at its September meeting, as questions remain over whether the Eurozone will slide further into deflation or deeper stagnation.

In the US on Friday, corporate results from the likes of Yahoo and Nike surpassed estimates and lead a rally in stocks.

In addition, US GDP figures confirmed expectations at +4.6% and consumer sentiment rose in September to a 14 month high.

The positive mood lifted the Dow Jones index, which posted a rebound of 119 points to 17,112.


By Jonathan Sudaria, 3 October 2014


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