Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
News

Mid-morning update: Maria-no joy for Rajoy

spain spanish map

spain spanish map

Thin holiday market liquidity has spurred a nice rebound in share prices on Monday after uncertainty surrounding Spain’s election result caused a lower open across Europe. Spain’s IBEX stock index dived to its worst day in three months whilst Spanish bond yields spiked as investors reacted to the country’s uncertain political future.

There is no clear majority after Sunday’s election in Spain since a coalition between PM Rajoy’s People’s Party and the liberal Ciudadanos would not be enough to form a majority. There’s a chance a socialist government could take charge if Rajoy can’t form an alliance of parties in the next few days.

A socialist government in Spain would not be the end of the world and the recent experience from Portugal suggests bond yields would likely normalise after the initial shock. More broadly, the Spanish election result is another sign of anti-establishment feeling in Europe brought on by discontent particularly amongst the youth and unemployed which were hit hardest during the 2008 financial crisis.

Brent crude has made a fresh 11-year low, the lowest levels since 2004. The energy sector is the weakest component of the FTSE 100 but a rebound off the lows for oil means shares of BP and Shell have edged back into the positive. Another high profile stake sale from an investor in BG Group is weighing on BG’s shares.

News that ITV is considering a sale to US cable operator Comcast has catapulted shares towards the top of the UK equity benchmark. Rival media conglomerate Liberty Global recently upped its stake of ITV to 9.9% but has denied intensions to attempt a takeover. The possibility of a bidding war is a big positive driver for ITV shares heading into 2016.

US markets look set for a rebound from the huge two-day rout at the end of last week. The performance of the energy sector is likely to be a key driver as investors deal with year-end thin liquidity and portfolio repositioning.

The force is strong for Disney at the moment after its Star Wars franchise broke cinema opening weekend records in the US, a possible positive catalyst for Disney shares on Monday.

USA pre-opening levels

S&P 500: 14 points higher at 2,019

Dow Jones: 110 points higher at 17,238

Nasdaq 100: 40 points higher at 4,554

 

CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.


Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.