Spreadex Market Update
China may cut again, whilst Petrofac combusts
The DAX saw a big rally towards the end of last week, as ECB President Draghi’s calming comments and movements towards stimulus action compensated for some poor figures coming out of Germany at the start of last week. Today the German index opened higher at 9717.5 after closing last week at 9730.2, and should be boosted by better than expected Ifo Business Climate figures. These latter figures came in at 104.7 instead of the forecast 103.0, and a rise on last month’s 103.2. With no scheduled conference from Draghi, Germany and the euro alike currently have no safety net of positive reinforcement from the President, so will be relying on the continued bullish sentiment leftover from last week.
Despite oil rallying slightly last week, Petrofac, the oilfield service provider, has warned that due to slowing demand in China, and oil’s usual woe of an increase in US production, profits will fall by 25% in 2015. Unsurprisingly, the company’s shares price responded in kind, with a precipitous drop of 24% almost matching the fall in profits for Petrofac. The company is now trading at 908, after closing Friday at 1193. Such a dismal display has done the FTSE no favours; following a strong Friday last week, closing at 6743.5, the FTSE lost some steam over the weekend, and begun Monday at 6756.2, remaining relatively flat in the hour after the bell.
As we enter Thanksgiving week, the Dow Jones closed out last week at another record high, climbing nearly 100 points on Friday to end the week at 17805.5. Any major movement in the American markets will most likely come at the start of the week, as the end of the week sees Thanksgiving, and therefore reduced trading hours for the US. Despite this, the Dow will be keeping a careful eye on the big movers and shakers of the Black Friday sales, as the fortunes of these companies will have an undoubted impact on the index.
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