Stock Markets: 19 December 2012
The FTSE 100 is currently trading 15 points higher at 5950; yet another step towards that magic 6000 level.
There's plenty of economic data on today's agenda, with the German Ifo business survey and Bank of England minutes this morning followed by US housing starts at lunchtime.
UK spread betting
investors will be particularly interested in whether the BoE makes any more noise about additional stimulus.
Most commentators believe that the impressive third quarter jump in GDP will not be carried into Q4, so will anyone else join the single dove in calling for more QE?
Also see today's quick analysis on: UBS Fined for its Part in the Libor Rigging Scandal
Stock Markets: 18 December 2012
So it looks like it's the President who's blinking first in the negotiations over the fiscal cliff, as he backs down on the higher rate of income tax, pension benefits and the US debt limit.
These minor victories for the Republicans are important in terms of the movements being made on the bloated US public sector, but are a step backwards on the tax front.
They show just how much power the Republicans can wield and comes as a surprise following the battering they received in November's Presidential elections.
For the spread trading
markets, however, the important thing is that the fiscal cliff issue looks set to be resolved and this is helping to keep the equity markets well supported.
Yesterday, the Dow welcomed the compromises and concessions offered by President Obama by putting on a triple-digit gain to 13,235.
The bulls were also happy to see the Japanese elections provide a decisive victory for Shinzo Ade who is keen on the idea of ultra loose monetary policy. As a result, we are likely to see the world's third biggest economy get even more of a boost from its central bank going into 2013.
There seems to be quite a bit of optimism and positivity surrounding the equity markets at the moment, especially for the German DAX which continues to break to renewed highs.
However, client sentiment doesn't seem to have improved as they continue to sell into any strength, clearly expecting the Christmas rally to fizzle out or lose steam.
There are still a few hurdles to overcome before we see the figure '6' in front of the FTSE 100, if indeed we ever do before the end of 2012.
The index is currently 15 points higher at 5930 and is still yet to break above the near-term resistance seen around 5950, 5965 and 5990.
To the downside, support levels are seen at 5910, 5880 and 5850.
Stock Markets: 17 December 2012
Asian markets opened quite strongly, with initial calls for the FTSE to be up at 5940, but the entire early morning session has seen slowly rising disappointment.
Nervous spread betting
investors seem to have decided that the latest move higher is, yet again, not to be the decisive break.
This follows pretty much the whole philosophy of 2012 where, contrary to the normally accepted wisdom, the best policy has been to take profits as quickly as you can.
The FTSE is now at 5900, down about 15 points on Friday's close, and we have solid support around 5885/95 which may hold us for the moment. If we do slip lower then there is an extra layer of support at 5855/65.
To the upside, anything above 5950/60 looks like a pretty tough call and, before this, the 5925/30 level has always been a bit of an intraday barrier.
Whilst the FTSE has been in something of a constrained range, the DAX has gone on a real walk about as woes over the Eurozone slowly fall out of the news; expect this to change in February/March next year.
Over the last month, the DAX
has rallied 650 points compared to a less than 300 point gain for the UK's senior index.
This is helping to cap a year in which the German index has rallied by over 1700 points whist the FTSE has struggled to put on 500.
With the continued undervaluation of the euro, from Germany's point of view at least, their companies have made hay in the sun. And, with every European politician worth his salt continuing to back the project no matter what, this state of affairs is unlikely to change.
Also see today's quick analysis on: Investors Look Unlikely to Push the Stock Market
Stock Markets: 14 December 2012
Last night saw the Dow Jones
shed 75 points to 13,170, despite the monetary easing announced by the Fed a day before.
As a result, European spread betting markets are flat on the open this morning, with the FTSE trading around the 5935 level.
We've debated whether the index will breach 6000 before the end of the year and the overriding opinion seems to be that it's unlikely unless the US politicians finalise a deal. Perhaps the Christmas rally has done all it can for now.
Today's economic data is focused in the EU and US, with PMI surveys and inflation data on both sides of the Atlantic. The manufacturing and services figures are likely to be the most closely watched as they have the largest market moving potential.
Also see today's update on the US Fiscal Cliff
Stock Markets: 13 December 2012
With "Operation Twist" coming to an end in the new year it looks like the markets fully expected the Fed's announcement of further stimulus in 2013.
The initial reaction was to buy equities like they were going out of fashion. Last night the Dow rallied following the confirmation from the FOMC that the Fed will start buying $45bn of treasuries per month in order to support economic growth.
So once again, we see that a central bank's answer to the economic growth problem is simply to print more money, a move that is little different to what we've seen in the past few years.
The initial response from risk assets was a positive one. However the gains were short lived as investors had probably already factored in the move from the Fed.
The main thing that has got people talking, and again this is something that was expected, is the fact that the Fed is going to focus far more on the level of unemployment in the US, more than it ever has before.
Interestingly, this is something that has already been mooted by the future Bank of England Governor, Mark Carney. He wants to change the remit of the BoE from inflation to growth and jobs.
The message looks clear in the respect that governments seem to be relying more and more on the actions of central banks to prop up economies. This means that further stimulus is likely in 2013, and not just from the Fed.
The problem with this is that a false economy is being created. Whilst the support might prevent a deeper recession, we're unlikely to see a return to the sort of growth we saw in the mid-90s anytime soon.
After the UK stock market closed, our FTSE spread
quote went as high as 5960. However, towards the end of the US session, the buyers dried up as the focus shifted back onto the US fiscal cliff.
The short lived optimism of the US session has meant that this morning we are at, or around, parity, with the FTSE trading at 5945.
clients continue to sell the UK stock market index, expecting the resistance levels to hold out. However, they are betting against the trend in a month that has historically seen strength in equity markets
, so it's quite a brave move.
Stock Markets: 12 December 2012
Discussions over the US fiscal cliff continue without a resolution. However, investors appear rather optimistic about the progress of the talks between US President Barack Obama and Republican John Boehner which have made headlines for more than a month now.
As a result, the Dow Jones had enough reason to continue its rally, gaining 80 points to 13,250.
The markets continue to edge higher as they brush aside the developments in Italy and the political uncertainty that has arisen from the resignation of technocrat Prime Minister Mario Monti.
A missile launch by North Korea has also not done much to dent investor sentiment.
Bit by bit, the stock market indices
seem to be building a Christmas rally. This is especially true with the German DAX
, which continues to knock on the door of its 5 year high.
Of course, the DAX was assisted somewhat by the additional encouragement of the ZEW survey that showed investor and economic sentiment confidence in Germany has stayed strong.
The FTSE 100 index is lagging its European counterpart. The Dow, remains a few hundred points off its 2012 highs.
clients remain of the view that the FTSE 100 will be unable to sustain these highs. They continue to sell into the strength expecting the Christmas rally to take a pause for breath and perhaps see a correction to the downside.
That certainly seems to be a view that is against the current trend and a brave one considering the time of year. Having said that, since the FTSE 100 cannot seem to convincingly break above this near term resistance area around the 5925 level, it's no wonder we see so many sellers at this moment in time.
There is a lot to focus on in terms of economic data today. We kick off with UK unemployment figures. The claimant count last month rose for the first time in quite a while and is expected to do so again today as the effect of temporary employment from the Olympics fizzles out.
The UK labour market continues to surprise many economists and has been remarkably resilient considering the sluggish growth we've seen this year. Even though growth is expected to improve in 2013, the level of employment may struggle to keep up with it.
Later this evening we get the FOMC decision. This will be closely watched, not just to find out what Ben Bernanke plans to replace Operation Twist with (it ends in the New Year), but what his growth projections are for the US economy.
Not surprisingly, traders will also want to hear what he has to say about the looming fiscal cliff.
So the FTSE is treading water at the moment, trading at 5925, the bulls will be watching those near term resistance levels of 5955/85/6000 closely.
Stock Markets: 11 December 2012
Another day and another massive banking fine, with HSBC
set to pay the largest penalty ever paid by a bank, a whopping $1.9 billion.
This has hardly affected the HSBC share price as it had already told investors that a fine was coming and had set aside $1.5bn, but the end figure is still far higher than expected.
HSBC now joins the long list of banks that have had their wrists severely slapped by US authorities. This includes Barclays
, Lloyds, Credit Suisse, some US banks and more recently Santander.
The negative news flow for global banks just seems to be never ending.
First a credit crunch back in 2007 which set off the banking crisis in 2008 and the subsequent bailouts. Then there were the banker bonus rows, which will no doubt rumble on as long as the taxpayer has a stake in the banks, and now big fines for lax compliance procedures over the years.
Needless to say, banking stocks are a little weaker this morning but the FTSE continues to hold up rather well following flat sessions in the US and Asia last night.
Despite the meagre gain, the Dow did start the week on a positive note, extending itself to 13,170. The rally was sustained by better-than-expected Chinese economic figures which showed that the world's second biggest economy remains in good shape.
A meeting between US President Barack Obama and Republican John Boehner also fuelled hopes that both parties are keen to reach an agreement over the fiscal cliff sooner rather than later.
This continues to be the big issue of the day for financial markets and is likely to remain so into the New Year.
We can expect to hear more from the President later today, but you get the feeling that if December wasn't such a bullish month for indices, investors might be getting a little more frustrated with the lack of progress.
Had it been any other month we may have seen a broader sell off but that simply hasn't materialised. Nevertheless, many of our spread betting clients are positioning themselves for some sort of major move to the downside, selling the FTSE
throughout this week.
This 5900/20 area continues to be a major hurdle for the index and if the bulls can break through it then they will have their eyes set on the next resistance of 5955/85/6000.
Stock Markets: 10 December 2012
clients are selling the indices this morning following the weakness on the open.
Looking at individual shares, Apple
's star seems to be slipping slightly and there must be significant worries that there is more to go.
The Samsung Galaxy handset is far cheaper and comes with pretty much the same functionality as the iPhone. Some of Nokia's new technology is said to be several years ahead.
With the multiple challenges to the iPad in the tablet market, especially with the new Microsoft package, consumers can expect something of a price battle to lower the exorbitant cost of the hardware.
On the plus side, Apple are about to launch a new TV entrant but this is in a very crowded space and a difficult one for consumer to proclaim their "up to date technological credentials" as the product will be sitting at home in an increasingly mobile space.
Also see today's feature: 2012 was a Good Year for the Stock Markets