Weekly Trading Update
21.12.12 Friday Morning
This week will likely be remembered for the US fiscal cliff hanging over the markets and investors’ sentiment being pulled back and forth as snippets of news, or lack of news regarding the cliff, dominated the markets.
Monday really did exemplify the general tone hanging over the markets this week, which was uncertainty.
However, news reports that the US President, Barrack Obama, had made a counter-offer to Republicans later on Monday provided an opportunity for bulls to wrestle back control from the bears on Tuesday as investors were provided with a glimmer of hope that maybe, just maybe, the fiscal cliff could be avoided before Christmas.
The optimism continued midweek and bulls were able to pick up more steam as investors hoped that a deal could be reached before Christmas resulting in the light at the end of the tunnel regarding the fiscal cliff looking a bit brighter.
The markets could also rejoice with better-than-expected German Ifo Business Climate data as well as news that the Bank of England were keeping interest rates at record lows.
Despite the gains on Wednesday, on Thursday, reality set in and investors began to panic that a deal had not actually been reached over the fiscal cliff.
On Friday, at the time of writing, the markets shook with fear and risk-on assets were shed as news reports released on Thursday that US House Republican leaders cancelled a planned vote on a back-up-tax-cut plan, resulting in a failure of ‘Plan B’.
Equity of the week will probably go to Aggreko, albeit not for a reason they would be proud of. The temporary power solutions provider sunk more than 17% on Monday after warning of a slowdown in 2013.
Open (Monday)
1.6177
Close (Thursday)
1.6248
Change
0.44
High
1.6248
Low
1.6177
Open (Monday)
1691.8
Close (Thursday)
1646.4
Change
-2.76%
High
1704.3
Low
1636.4
Open (Monday)
13172
Close (Thursday)
13148
Change
-0.18%
High
13379
Low
13019
Open (Monday)
5925
Close (Thursday)
5933
Change
0.13
High
5981
Low
5879
However, the real Christmas gift bulls will be craving for is a swift end to negotiations over the fiscal cliff and for a deal to finally be reached before the US economy goes over the fiscal cliff.
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