FTSE up on the end of last week

Bets in the City / Simon Denham / 08 December 2008 / Leave a comment

Daily View - 8th November 2008

This morning the FTSE is being called a whopping 200 points higher from Friday's close in an impressive start to the week and following a big move higher from US markets on Friday night. Last week was certainly one to remember as it commenced with humungous falls on Monday and then an extraordinary recovery on Friday following the direst US employment figures since 1974. The rise was an encouraging sign and from a technical standpoint the recent low of 815 in the S+P 500 remains intact which is also good news for the bulls and as I write the S+P future is testing 900. The only note of caution is that Friday's move was on rather low volumes.

Barack Obama's massive bailout of the US carmakers over the weekend is yet another throw of the dice by a western government. The US auto industry is an employer of huge proportions and the rescue plan has certainly boosted confidence but whilst it will keep millions of consumers in their jobs, it won't be enough to change the long term picture yet.

The week ahead.

Today Whitbread step up to the plate with a trading statement which may not look all that pretty after have announced their concerns about an ailing consumer back in October. On the economic front we get a little flavour of how inflation is doing with producer prices being released at 9.30am which is rather academic really considering the Bank of England is concerned about inflation for the time being but it will certainly be good to see that factory gate prices are continuing to come down.

On Tuesday, apart from equipment hire group Ashtead releasing their interims, there are no other major companies of note reporting. At 9.30am we get a look at industrial production which is unsurprisingly expected to decline -0.2% month on month and 2.2% year on year. Whilst UK manufacturing has been crying out for big reductions in interest rates for years, now they've got it but unfortunately at a time that economy is going into a tailspin. Much later on Washington consumer confidence is released in the US which is also not expected to be pretty.

Wednesday sees trading statements from support service firm Carillion and retailer JJB Sports. Both companies with large debts to finance JJB Sports is under rather more pressure having recently said that they may struggle to meet loan agreements on top of facing a consumer slump. Following their profits warning in September their share price has plummeted over 90% and it looks like a break up is likely, stripping the fitness clubs out. Even though a couple of their competitors have big stakes in the company an impending takeover would seem rather a risky thing to do now and nothing is likely to happen for a while (if it does at all) following Britain's consumer affairs announcement last Tuesday that it planned to investigate rival Sports Direct's stake in JJB. Things are quiet on the economic front for the UK and not much more exciting in the US with wholesale inventory numbers at 3pm.

Thursday will see another household retailer release interims. HMV which has often been in analysts firing lines with sluggish sales in the face of stiff competition both off and online has seen its share price remain remarkably resilient. The real test will be how they can cope this Christmas against all the headwinds. At 1.30pm the US trade balance is released and due to show a deficit of -$56bn.

We end the week with Centrica giving us a trading update and it'll be good to see how their acquisition of British Energy is coming along. On the economic front the focus will be on the US at 1.30pm as we see both US PPI and retail sales.

The Tradefair Spread Betting Team