Incisive market commentary from David Morrison

Stay ahead with our market commentary and webinars from our in house market strategist

Open a Live AccountOpen a Demo Account
+ Show blog menu



Expand 2017 <span class='blogcount'>(348)</span>2017 (348)
Collapse 2016 <span class='blogcount'>(483)</span>2016 (483)
Expand December <span class='blogcount'>(23)</span>December (23)
Expand November <span class='blogcount'>(41)</span>November (41)
Collapse October <span class='blogcount'>(37)</span>October (37)
Central banks and US payrolls in focus - Weekly Bulletin
31 Oct 2016
Revised Trading Hours - UK British Summer Time (BST) ends, 30th October 2016
28 Oct 2016
US GDP in focus - AM Bulletin
28 Oct 2016
US stock indices still range-bound
27 Oct 2016
Equities drift on mixed earnings
27 Oct 2016
Earnings season, oil and the US dollar - Video Update
26 Oct 2016
Apple disappoints - AM Bulletin
26 Oct 2016
Silver range-bound - PM Bulletin
25 Oct 2016
Equities up on deals and earnings - AM Bulletin
25 Oct 2016
Spread betting charges – overnight financing - Trading Guide
24 Oct 2016
USD rally continues - Weekly Bulletin
24 Oct 2016
Deutsche Bank trades at pre-DOJ fine levels : AM Bulletin
21 Oct 2016
ECB Decision in less than 400 words - PM Bulletin
20 Oct 2016
Oil’s move to a 15-month high supports global markets - AM Bulletin
20 Oct 2016
Intel buck earnings trend as the Fed takes centre stage again - PM Bulletin
19 Oct 2016
WTI eyes resistance around June highs - PM Bulletin
18 Oct 2016
US/UK inflation data in focus - AM Bulletin
18 Oct 2016
How to know what to spread bet on : Trading Guides
17 Oct 2016
Dollar up on December rate hike speculation - Weekly Bulletin
16 Oct 2016
Oil sparks recovery on Wall Street - AM Bulletin
14 Oct 2016
FOMC minutes - hawkish or dovish? - PM Bulletin
13 Oct 2016
Weak Chinese trade number hits miners - AM Bulletin
13 Oct 2016
US indices range-bound ahead of election - Video Update
12 Oct 2016
FOMC minutes in focus - AM Bulletin
12 Oct 2016
Sterling at fresh multi-year lows : PM Bulletin
11 Oct 2016
Brent crude hits 12-month high - AM Buleltin
11 Oct 2016
How Spread Betting Works : Trading Guides
10 Oct 2016
Another disappointing US payroll report - Weekly Bulletin
09 Oct 2016
Sterling “flash crash” and US Non-Farm Payrolls - AM Bulletin
07 Oct 2016
Non-Farm Payroll look-ahead - PM Bulletin
06 Oct 2016
AM Bulletin: Equities up on data releases and oil
06 Oct 2016
Video Update: OPEC’s production cut promise poses some questions
05 Oct 2016
AM Bulletin: Precious metals slump on USD rally
05 Oct 2016
PM Bulletin: Sterling lurches lower
04 Oct 2016
AM Bulletin: Firmer start for global equities
04 Oct 2016
Trading Guide: How to use Stop Losses in spread betting
03 Oct 2016
Weekly Bulletin: Important week for data releases
03 Oct 2016
Expand September <span class='blogcount'>(41)</span>September (41)
Expand August <span class='blogcount'>(52)</span>August (52)
Expand July <span class='blogcount'>(38)</span>July (38)
Expand June <span class='blogcount'>(42)</span>June (42)
Expand May <span class='blogcount'>(42)</span>May (42)
Expand April <span class='blogcount'>(45)</span>April (45)
Expand March <span class='blogcount'>(41)</span>March (41)
Expand February <span class='blogcount'>(42)</span>February (42)
Expand January <span class='blogcount'>(39)</span>January (39)


Indices Update

The European majors were firmer in early trade this morning. Investors were in a positive frame of mind after Wall Street managed to hang on to solid gains last night. However, European indices pulled back from their best levels soon after the open. Investors seemed wary of taking on too much exposure as the earnings season shifts up a gear in Europe and the US. This is an important week for earnings with over 600 US companies (including 181 in the S&P500)releasing results and more than 100 companies in the European Stoxx 600 scheduled to report. Apple will release its numbers after the close tonight.

European and US equities flew higher yesterday. The positive sentiment towards stocks followed the announcement at the end of last week of the proposed $85.4 billion takeover of Time Warner by AT&T. On top of this the largest deal in avionic history was announced with Rockwell Collins planning to purchase B/E Aerospace for $6.4 billion.  Investors were also heartened by news of a political shift in Spain which clears the way for Mariano Rajoy, leader of the Popular Party, to be re-elected as Prime Minister. This should bring to an end the impasse which has left Spain without a government for the best part of three years. It also means that Spain can avoid going to the polls for the third time in less than twelve months.

Meanwhile, the race for the US presidency has entered the final fortnight. Polls suggest that Hillary Clinton is managing to extend her lead and this is helping to calm markets. A win for Clinton is seen as a win for the establishment and the status quo. Donald Trump may still be considered as better for the US economy (by the electorate, if not by economists) but he is viewed as a loose cannon as far as investors are concerned. While certain market sectors would do well under a Trump presidency, it appears that investors are looking forward to business as usual with Clinton.

Yesterday also saw the release of Manufacturing and Services PMIs from France, Germany and the euro zone as a whole. It was a mixed picture in France where manufacturing picked up in October but was offset by a weaker-than-expected Services PMI. However, both German PMIs were strong and these translated through into solid numbers for the Euro zone as a whole. The data releases also helped to underpin European equities although the UK’s FTSE100 was unable to join in the widespread rally.

Yesterday the FTSE 100 index closed at 6,986.4 down 34 points on the day

The German DAX rose 50.4 points or 0.5% to finish at 10,761.2

The US30 closed up 77.3 points to finish at 18,223. The S&P 500 ended 0.5% higher at 2,151.3 while the Nasdaq 100 ended up 1.2% at 4,910


Over the weekend there were a number of merger announcements. Of these none was bigger than the proposed $85.4 billion takeover of Time Warner by AT&T. The mega-deal sees the telecoms and internet giant move into content as Time Warner is the New York-based company which owns CNN, TNT, the Warner Brothers’ film studio and HBO the maker of Game of Thrones amongst other hits. Investors cheered the news, not only as the takeover is expected to result in cost-savings, innovation and all the other stuff promised in these deals, but also as it could set off a wave of similar link-ups between content producers and internet/telecoms giants. However, shares in both groups ended lower yesterday as investors expressed concerns that the deal may face political and regulatory roadblocks. AT&T ended 1.7% lower at $36.86 while Time Warner ended 3% lower at $86.74

Commodities Update

After three weeks of apparent solidarity, the first obvious cracks are appearing in OPEC’s commitment to cutting production. Over the weekend Iraq’s oil minister Jabar Ali al-Luaibi said that the nation should be exempted from production cuts due to its ongoing war with Islamic militants. Iraq expects to increase its output a touch from last month’s 4.77 million barrels per day. However, Falah al-Amiri, head of Iraqi state oil marketer SOMO, claimed the country would be producing 9 million barrels per day if it wasn’t for the hostilities currently blighting the country. There are already questions over exemptions being extended to Iran, Nigeria and Libya as all three countries have been unable to maximise production due to previous sanctions (in the case of Iran) and because of hostilities in Nigeria and Libya. Meanwhile, Russian Energy Minister Alexander Novak yesterday told reporters that Russia considers an oil output freeze to be an effective tool for stabilizing global oil markets.

Oil prices spent most of the European session little-changed. However, it turned lower ahead of the European close. It’s worth noting that both WTI and Brent have been unable to break and close convincingly above the highs made back in early June, around $51.60 and $52.80 respectively.

Gold and silver continue to consolidate, despite the ongoing rally in the US dollar. Generally, dollar-denominated commodities struggle to make headway when the dollar is rising as it becomes more expensive for non-dollar holders to convert their currencies to make a purchase. On top of this, one of the main reasons for the dollar’s rise is the prospect of a Fed rate hike in December, after the US Presidential Election. Non-interest/dividend paying assets (such as gold and silver) tend to lose their attraction when yields are rising as investors seek out a “risk free” return on their funds. Tied into all this is the market expectation that Hillary Clinton is set to win the election on 8th November. Mrs Clinton is viewed as the “establishment” candidate who will ensure the status quo. And no doubt she will - unless the Democrats win a landslide and capture Congress as well.

Forex Update

The US dollar spent most of yesterday consolidating at multi-month highs. The greenback has rallied strongly throughout October as investors increasingly price in a Clinton victory at next month’s US Presidential Election. There is also considerable speculation surrounding the prospect of a rate hike from the Federal Reserve when it meets in December. The prevailing view is that a Clinton win increases the likelihood of tighter monetary policy from the Fed. This is because Clinton represents greater certainty and continuity whereas a Trump presidency is viewed as a dive into the unknown.

Yesterday Chicago Federal Reserve President Charles Evans said the US central bank could raise rates three times between now and the end of 2017, just as long as inflation expectations and the labour market continue to improve. Mr Evans’s comments added to other hawkish statements from regional Fed presidents. Last week San Francisco Federal Reserve President John Williams and New York Federal Reserve President William Dudley both hinted at a looming rate rise. This should all help to keep a bid under the dollar for now. However, it’s worth remembering that the Fed has previous when it comes to talking up the prospect of a rate hike but backing down when it comes to pulling the trigger.

Upcoming events

Today’s significant economic events include the release of the German Ifo Business Climate survey. From the US we have the S&P/Case Shiller House Price Index, Consumer Confidence and Richmond Manufacturing Index. We also have speeches from Bank of England Governor Mark Carney and ECB President Mario Draghi. 


Spread Co is an execution only service provider. The material on this page is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by Spread Co Ltd or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.


Posted by David Morrison

Category: AM Bulletin

Add a comment Add comment            


© 2018 Spread Co Limited. All Rights Reserved.

Spread Co Limited is a limited liability company registered in England and Wales with its registered office at 22 Bruton Street, London W1J 6QE. Company No. 05614477. Spread Co Limited is authorised and regulated by the Financial Conduct Authority. Register No. 446677.

Spread betting and CFD trading are leveraged products and can result in losses that exceed your deposits. Ensure you understand the risks.

Losses can exceed deposits. Click here to learn more.