Weekly Trading Update
22.01.16 Friday Morning
China’s GDP was the main story early in the week, with growth sinking to its slowest rate in a quarter of a century, achieving 6.9% rather than the 7% it was aiming for. The accuracy of these figures has been questioned with Faber suggesting the country’s growth was actually around 4%. He thought that more reliable figures such as imports and exports from Taiwan and South Korea painted a much more bearish picture. The People’s bank of China continues to buy the renminbi which has added some stability to the currency market. In addition this has collapsed the spread between the onshore and offshore currency markets, which was becoming a large headache for the country a couple of years ago.
As with the rest of the world European stocks suffered in the global sell off on Wednesday as oil fell and investors looked for safer places to store their capital. Draghi offered some respite on Thursday as he announced that the European Central Bank will review its monetary policy at their next meeting. He claimed that the ECB has the power, willingness and determination to act. As a result all major European markets have continued to gain since his speech. Draghi’s comments and the anticipated quantitative easing caused the euro to fall, dropping against the dollar.
US stocks had a manic Wednesday as the S&P 500 reached a low of 1804.4 late afternoon. Since then some positive news has filtered through the market, oil rebounding back above $30 a barrel and a reasonable earnings season has seen the market move consistently upwards. It touched 1900 on Friday with some bulls returning, believing the market to be heavily oversold. Next week the Federal Reserve meet, no one is expecting another rate rise so investors will look for hints in to when the next one will be and how many occur in 2016.
Stock of the week: Pearson
Pearson, the world’s largest education company had a strange week. It’s earnings were released Wednesday and despite missing analyst expectations, stating tough trading conditions and restructuring and retrenchment the shares flew 17% higher on Thursday. This price move was due to the firm undertaking a “rigorous bottom up review” of the company’s business as they seek to reduce cost as well as announcing plans to keep their dividend. Investors seemed convinced as this was the firms best day since July 2009. As part of the restructuring plan, 4000 jobs will be cut and £320m spent.
Open (Monday)
5769.3
Close (Thursday)
5786.4
Change
0.2964%
High
6011.7
Low
5826.8
Open (Monday)
15963.7
Close (Thursday)
15888.5
Change
-0.4711%
High
16277.5
Low
15450.5
Open (Monday)
1.42582
Close (Thursday)
1.42259
Change
-0.2266
High
1.4341
Low
1.40798
Open (Monday)
1089.4
Close (Thursday)
1109.8
Change
1.0556%
High
1109.8
Low
1082.4
Monday January 25th 2016
18:00 – ECB President Draghi Speaks
Tuesday January 26th 2016
10:45 – BOE Gov Carney Speaks
15:00 – US Consumer confidence
Wednesday January 27th 2016
12:30 – Australia CPI
15:30 – Crude Oil Inventories
19:00 – FOMC Statement
19:00 – Federal Funds Rate
Thursday January 28st 2016
09:30 – UK Preliminary GDP
13:30 – US Core Durable Goods
13:30 – US Unemployment Claims
Friday January 29nd 2016
05:00 – Bank of Japan Outlook Report and Policy Statement
13:30 – Canadian GDP
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