openPR Logo
Press release

UK to follow the US?

US stocks have received a slight boost as oil prices retreat and new home sales unexpectedly rose on a month on month basis. However, we shouldn’t really read too much into this, as there is a margin for error in these figures and new home sales in the US are still down 42% year on year. In addition, the Case-Schiller benchmark house price index is now showing a record decline of 14%. During the early 90s housing recession, this figure reached just -2.8%, which is a real indicator of the absolute capitulation in the US housing market. Predictions of double digit losses for the UK housing market may not be far off the mark, especially in light of recent house price data showing record month on month falls.

There isn’t the immediate connection between UK house prices and the FTSE as there is with oil and equities at the moment. Before the credit crunch broke, US house prices were on the retreat, yet stock markets continued to rally. Oil currently has a more immediate relationship with equity performance because of its daily volatility and that fact that many traders have already moved to price in a UK housing slump. The banking sector itself however, does have more significant correlation between house prices and share prices. Banks were amongst the worst performing sectors last week as fears of repossessions and negative equity caused many to question the values of their loan books. RBS also dragged the sector down with rumours that its rights issue would fail.

The FTSE finished the week below its European peers and well below US markets, who actually managed a decent gain on the week. In the US, the Nasdaq led the charge with Google up on encouraging pay per click data. Ironically, it may have been lower oil prices that hit the FTSE hardest last week. Oil finished down, around $8 from the peak of $135, sending oil majors such as BP and Shell lower over the reduced trading week. Financial stocks contribute around 25% of the FTSE’s total weighting and Oil & Gas stocks aren’t far behind at just under 20%.

While there is still scope for oil to at least contain its price inflation, there is a long way to go before the impact of high oil prices is nullified. Today’s pull back was welcomed in the short term by traders, but the realisation is setting in that sky-rocketing oil prices have left a trail of inflationary destruction in their wake that won’t disappear over night, even if prices dip back below $100.

The stand out announcements next week revolve around interest rates. On Thursday, the BoE’s Monitory Policy committee will announce the latest headline interest rate decision. A rate cut seems to be off the cards given recent comments from Governor King. The most likely decision will be to keep rates at 5%, there is always a small potential for upside. In Europe, the ECB has been taking a stronger line on inflation for longer with the German central bank calling for rate hikes. Elsewhere we have important employment data from the US on Friday on top of top tier manufacturing data earlier in the week. The Halifax house price index is tentative for some time on Tuesday, an announcement that could cement the UK housing decline.

The GB Pound/ US Dollar exchange rate, known as ‘cable’ was virtually unchanged over the week, but given the raft of announcements due on both sides of the pond, there could be some significant movement next week. An ‘Up or Down’ trade with BetOnMarkets.com wins if either of two barrier levels are hit within the specified time. An Up or Down trade on GBP/ USD to touch either 1.9454 or 1.992 within the next 10 days could return 11%.

Name : Mike Wright
Address: Regent Markets (IOM) LTD
3rd Flr, 1-5 Church Street,
Douglas, IOM
IM1 2AG
British Isles
Phone : 448003762737
email: editor@regentmarkets.com
URL: http://www.betonmarkets.com & http://www.betonmarkets.co.uk

BetOnMarkets.com is the world's leading Fixed Odds Financial Trading website. Fully licensed and regulated globally, BetOnMarkets.com handles around 18,000 trades a day, from over 130,000 registered clients. Over 15 million trades have been processed since inception in 2000. The multi-award winning BetOnMarkets.com allows traders to speculate on the movement of the worlds' major financial markets, up down or sideways without actually owning the market, stock or currency you are buying.

This release was published on openPR.

Permanent link to this press release:

Copy
Please set a link in the press area of your homepage to this press release on openPR. openPR disclaims liability for any content contained in this release.

You can edit or delete your press release UK to follow the US? here

News-ID: 46215 • Views: 1228

More Releases from Regent Markets (IOM) Limited

Will the Stocks Bear Market Continue to Reign?
There were genuine signs of emerging optimism in stock markets last week. Confidence has been largely absent so far in 2009, with every attempted rally squashed before it really had chance to get going. There is a growing sense that this time round things are different, and this belief will only grow further, if markets can survive the next week or so without dropping too far below last Thursday’s low.
Still trapped in financial mess
Considering the dead weight financial sector, stock markets could have fallen a lot further than they eventually did over the course of last week. However, there's no getting away from the mess that financial shares are in. Just over two years ago today, the RBS share price hit an all time high of £7.24. Last weeks low of just 10p highlights the markets underlying concern that the financial cancer has
Credit Crunch Springs Back into Action
After taking some time off between Christmas and New Year, the credit crunch was well and truly back in action last week. Fears over further banking problems and sovereign debt downgrades for the likes of Ireland and Greece surfaced last month, but until now, these fears have merely been simmering in the background. Last week, the heat was once again turned up, and major fault lines are once again
Markets suffer their worst run for generations
The final week of 2008 passed with many markets recording their worst annual performance for generations. Equities finished above their lows, but still finished down by at least 30%. The S&P 500 closed 2008 down 38%, while the Nikkei closed down over 40%. The ‘lost decade’ rolls on ever more for the Japanese stock market. Perhaps the most remarkable performance came from commodities; at one stage, oil and copper were

All 5 Releases


More Releases for FTSE

IdealRatings and FTSE Russell launch the FTSE IdealRatings Sukuk Index
San Francisco - London, October 2020 IdealRatings Inc. launched the FTSE IdealRatings Sukuk Index in June in collaboration with global index provider FTSE Russell, incorporating IdealRatings’ Sukuk Shariah compliance screening methodology into the existing FTSE Sukuk Index methodology. The FTSE IdealRatings Sukuk Index tracks the performance of US Dollar-denominated, investment-grade Sukuk that are issued in the global markets, providing investors with a transparent and objective measure of the market, enriched
Oxford Instruments plc enters the FTSE 250
The FTSE Group has announced that Oxford Instruments plc, the leading provider of high technology tools and systems for industry and research, has been promoted to the FTSE 250 index. Jonathan Flint, Chief Executive, says “Joining the FTSE 250 is an outstanding milestone for Oxford Instruments and something all our employees can be extremely proud of. It reflects the huge steps forward the Group has made during recent times, successfully
Real Estate Investment Drives Growth in FTSE 100 – AAA
The London-based FTSE 100 recent results illustrated perfectly how real estate is once again proving to be a lucrative investment market, claimed Alternative Asset Analysis (AAA). Boston, MA, May 21, 2011 -- The London-based FTSE 100 recent results illustrated perfectly how real estate is once again proving to be a lucrative investment market, claimed Alternative Asset Analysis (AAA). The alternative investment advocacy group said that property firms have seen extremely strong rises
Spread Betting: Goldman Sachs earnings trigger equity sell off - FTSE back below …
Financial spread betting expert and City Index (http://www.cityindex.co.uk/) Market Strategist Joshua Raymond looks at the financial headlines shaping trading on 19th January, including a sell-off triggered by a decline in earnings at Goldman Sachs “A surprising decline in earnings from major US bank and corporate bellwether Goldman Sachs triggered investors into defensive mode in late European trading, forcing the FTSE 100 lower by over 1% and back below the 6000 level.
Financial Spread Betting & CFD Trading: FTSE rallied 1% on strength in commodity …
Joshua Raymond is a spread betting expert and Market Strategist at City Index (http://www.cityindex.co.uk/). Here, he looks at the financial activity shaping trading on 18th January, including strong buyer demand for shares of commodities companies pushing the FTSE higher. “Strong buyer demand for shares of commodity companies such as energy and mining firms, aligned with hopes for an outperforming earnings season helped to power the FTSE higher by over 1%, with
Spread Betting News: Monday "quiet day", but FTSE 100 expected to rise at open
Financial spread betting provider City Index (http://www.cityindex.co.uk/) looks at the financial news affecting traders on 17th January, with the FTSE set to open robustly and a public holiday in the USA. Individuals with a spread betting account may have found today (January 17th) to have limited activity, although the FTSE 100 was set to open robustly. As of 06:24 GMT, Reuters reported the FTSE 100 was expected to open between one and