Betfair Official Blog

Daily View - 6th February

US recession? If only that was the end of it all...

After expressing the fervent hope that Mondays activity might presage a calmer time for the markets, the US brought out some truly awful numbers for non-manufacturing sentiment and activity which seem to indicate that the US is not just in recession but swiftly moving into depression.

The FTSE proceeded to slump 150 odd points and this morning is likely to open another 40 or so lower. With no help, for once, from the Far East (which has occasionally managed to buck the western trends), the outlook on the off is rather grim. Put another record on please; this one is beginning to bore.

With the markets looking grim this morning it is nice to see BHP's bidding up for Rio as their offer goes aggressive. Shares are likely to go higher but with base commodity prices looking a tad toppy there is the fear that they are paying top dollar for the privilege.

BP's poor numbers were somewhat assuaged by the hefty increase in dividend which should make for nice longer term returns (if you can survive the current turmoil). The fact that the year-end figures came in worse than expected, saw the FTSE fall 150 points and the price of oil a couple of bucks, yet the shares ended the day on the side of the angels (just), and this bodes well for those who feel that a bottom may have been reached. The cost-cutting in the management structure should add some billions to the long term bottom line and the stock is expected to come in this morning slightly higher again maybe around the 550p level.

Gold continues to look weak as the dollar bounces and we are now solidly below $900 at 887.7-888.2. The major short term support is around $870, medium term at $840 and long term down at around $690. This is just another reminder that we can fall a very long way indeed but still remain in a bull market.