Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% 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

79% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

FREE EBOOK

How to Day Trade Stocks & Indices

  • Place your first trade
  • Identify 9 chart patterns
  • Pro strategies step-by-step

You'll also receive our newsletter and other Opto emails in accordance with our privacy policy.

Market Outlook

FTSE 100 index climbs higher as RBS and Evraz post positive earnings

A weekly run through of the key UK and US indices, from Opto.

 

 

FTSE 100

Barring a slight drop between 6 February and 8 February, the last three weeks have seen the FTSE 100 performing strongly. Since 28 January, the index has increased 7.3%, including a 2.34% jump during the week ending 15 February, a run that looks set to continue for the first part of this week.

After high-level meetings concluded in Beijing last week, President Donald Trump said that the US-China truce deadline could possibly be extended beyond its 1 March deadline. The outlook for an extension started looking far more certain around the middle of the week with the index growing 1.44% from Wednesday’s opening of 7133.14p.

The shift shows progress, but reflects City Index analyst Fiona Cincotta’s feeling that a significant breakthrough was unlikely to happen.

“The reality is that we are unlikely to see any big moves towards a deal this week,” Cincotta said. “The market is not pricing in the hike in tariffs and the damaging consequences on the Chinese and global economy.”

“The reality is that we are unlikely to see any big moves towards a deal this week,” Cincotta said. “The market is not pricing in the hike in tariffs and the damaging consequences on the Chinese and global economy.” - City Index analyst Fiona Cincotta

Last week saw a string of positive earnings announcements with interesting performances across the board. The Royal Bank of Scotland Group [RBS] beat analysts’ revenue predictions by £400m, as its net income reached £1.62bn for 2018. At the start of the week, RBS’ stock opened at 238.7p and closed at 247.8p showing a 3.81% increase.

Elsewhere, Evraz [EVR] and The Wood Group [WG] were both up across the five days. While Standard Life Aberdeen [SLA], Micro Focus International [MCRO] and Centrica [CNA] all fell, with the former sliding heavily between Thursday and Friday, dropping 6.31% from 249.45p to 233.7p.

 

S&P 500

Apart from a couple of minor hiccups, the S&P 500 has seen steady growth since the turn of the year. The week ending 15 February was no different and the US index was up 2.49% from $2708.07 to $2775.60.

The index was buoyed by earnings results triggering Marathon Oil’s [MRO] 13.79% rise, Equinix’s [EQIX] 5.94% uptick and Iqvia [IQV] 9.64% increase.

However rising market concentration is causing analysts to suggest that the future of the index could be problematic. “In fact, the longer this goes on, more stocks in the index become irrelevant to the index’s performance,” chief investment officer at Sungarden Fund Management, Rob Isbitts, said. “This is not a problem…until it is.”

Those words were echoed by Goldman Sachs analysts who warned investors that, despite a strong run so far in 2019, the S&P 500 was set to return to far more modest levels of growth.

 

Dow Jones

The Dow Jones had a mixed week, starting far more bullishly than it ended. From opening on a week-high of $25,598.01, the index posted a 1.96% rise on Wednesday 13 February.

1.96%

Gains made by the Dow Jones on Wednesday 13 February

With trade talks between the US and China recommencing this week in Washington, the Dow Jones looks set to benefit if the deadline is extended beyond 1 March. However, Trump’s threat of declaring a state of emergency over his proposed border wall could affect markets.

Several companies saw healthy gains throughout the week with McDonald’s [MCD] rising 2.4%, Cisco Systems [CSC] up 4.5% and Intel [INTC] up 5.15%.

 

Nasdaq

The Nasdaq suffered from the Commerce Department reporting difficult US retail sales in December. It was, however, the more resilient US index rising 2.08% through the week ending 15 February. 

The week’s big winner was electric car manufacturer Arcimoto [FUV], which rose 48%, seemingly boosted by the launch of its new three-wheeler vehicle to the market. The Oregon-based business is branding itself as a competitor to Tesla, though it is certainly not in the same league financially.

48%

Last week's gains made by Arcimoto stock

PepsiCo [PEP] rebounded after a poor week with its earnings announcement falling in-line with expectations for the quarter, posting a week-long rise of 2.43%.

Investors with interests in the Nasdaq will certainly be watching the US-China talks closely. Ties between the two are crucial for low manufacturing costs, though the tech battles between the US and China rages on with Apple [AAPL] and Huawei fighting it out for market share.

Disclaimer Past performance is not a reliable indicator of future results.

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.

CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.

*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.

Continue reading for FREE

Join the 40,000+ subscribers getting market-moving news every week.

Written by

Free ebook

Tricks of the trade: 7 interviews with the world’s top traders

Get it now

Related articles

7 Interviews with the world's best traders

Learn about the techniques and strategies used by expert traders

Get it now