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Weekly Traders CFD Diary

10th November: A China Stimulus The FTSE 100 manages to follow through well on the gains of both last week, and the 250 point gain for the Dow late on Friday. The index has made it back above the 4,500 level via a triple digit gain. What has been the main driver for the bullishness is news of a $600bn economic stimulus package in China, a typically communist style move apparently learnt from its capitalist counterparts in the West.

BT Dials The Right Number

Trader's Report 07 November 2008Elsewhere the FTSE 100 was in the negative again in the wake of US Treasury Secretary Paulson’s apparently back tracking in the wake of the calls from the US auto industry for its own bailout. This was taken very badly by the US stock market, with index losses of 5% or more. On this basis the 1% decline in the FTSE 100 so far today has not been a bad performance. The reason may be that investors have had corporate statements like BT’s to digest.

A Sell Into Strength

It has not been a great surprise that the FTSE 100 has lost its initial gains through 4,300; given that there have not been that many positive drivers for leading stocks today. The main influence is arguably the price of crude oil, now below the $58 a barrel level. The fact that this market is down here and showing little sign of strength is as much a reflection of how bearish it is, as well as how negative traders have become regarding the economy. Naturally, it has been the oil majors who have suffered, once again lead by BG Group (BG.) which is down nearly 4%. BP (BP.) is down 2%, but Royal Dutch Shell (RDSB) outperforms with a loss of only 0.5%. The worst of the bunch is actually Tullow Oil (TLW) which loses 5% despite suggesting that its production in 2008 with average 67,000 barrels a day.

Vodafone Lowers Guidance

There was something of a hangover feeling on leading stocks this morning, as any goodwill associated with the China economy bailout yesterday was lost. This is hardly surprising given the way that China has been the big hope for the world economy in terms of being a route out of the Credit Crunch. The casualties in terms of share prices were generally those sectors that fared best yesterday. Expectation of weaker economic performance lowered the price of crude oil and oil majors, with BG Group (BG.) leading the way down with a 6% decline, and Tullow Oil (TLW) also sliding by a similar amount. Although it was true that BP (BP.) and Royal Dutch Shell (RDSB) only lost around 2%.