Faltering FTSE, disappointing Dow and opposites in online gambling

It was a weak Wednesday for the FTSE after UK figures largely missed their forecasts. Unemployment stayed at 6% instead of predicted 5.9%, whilst the number of unemployment benefit claims fell to 20.4k instead of the forecasted 24.9k.  However, there was a slither of good news as average earnings grew by 1% instead of the forecast 0.9%. Following these figures, the Bank of England conference failed to satisfy, with Governor Carney stating that inflation could fall to 1% based on weakness in Europe and low import, food and energy prices. Damningly, Carney revealed that the targeted 2% inflation would probably not happen for another 3 years, as well as cutting the predicted 2015 economic growth to 2.9%. Unsurprisingly, this news, alongside the aforementioned disappointing earnings releases from companies like Sainsbury’s and Burberry has led to a poor day for the FTSE100, which continued to perform below its six week high at between 6597-6603.

Elsewhere in Europe, Russia’s geopolitical and economic woes have continued to affect Europe’s engine room, with Germany’s exporters consistently being squeezed by the sanctions placed on Putin’s country. This trend was captured today by the bleak numbers posted by Eon, Germany’s biggest utility company, whose profits fell by 25% in the first nine months of2014. This had a negative effect for the DAX, which traded 150.5 points lower today at 9211.7. This influx of poor European news led to lame days for both the pound and the euro, after a stable if unspectacular past few days for the currencies. The GBP/USD fell to 1.58208, whilst the EUR/USD fared slightly worse, falling 0.1% to 1.24609.

As the APEC summit comes to an end, the landmark agreement between China and the USA to cut greenhouse emissions closed proceedings, with tensions between the two nations being played down. However, disappointingly for the US, and Obama in particular, there appeared to be no significant movement towards cementing the proposed Trans-Pacific Partnership. Pushing the TPP was considered by many to be Obama’s main objection for his trip to China, so no solid progress on this front is the latest in a long line of bad news for Obama. The dollar fell slightly against the yen this afternoon, coming in at 115.214, as the Dow Jones slipped 12 points to open at 17600.5, dropping further in the hours after the bell to 17550. Obama will hope there is better news tomorrow, as the USA announces the figures for the number of people who registered for unemployment benefits for the first time this week, with the forecast higher than last month at 282,000.

Dispatches from the APEC summit were not the only interesting news coming from Asia. On Tuesday night the Nikkei closed at a 7 year high of 17197.05 as traders were excited by the postponement of an increase in sales tax, as well as the potentiality of President Abe calling a snap election to cement his position. The potential for volatility in this market is proving to be interesting viewing for investors. Eyes will also look to China tomorrow, as they announce their industrial production figures for this month, forecast to maintain the 8.0% level of October.

Finally, there were big losers and winners in the online gambling world today. Playtech was devastated by Malaysia’s decision to block online betting sites, with stock prices falling by around 8% to a low of 601.25. Investors were spooked by the uncertainty around regulation, despite a strong third quarter earnings last month. Inversely, Bwin.Party Digital Entertainment, the company behind PartyPoker.com, has had share prices jump by nearly 11%, with an expected close of 119. This comes after news that Bwin.Party were considering possible bids, coyly stating that they were in discussions about ‘a variety of potential business combinations’ that could lead to an offer for the firm.