Christmas is nearly here…. Last week saw a positive last full week of trading in 2013 as the Santa rally showed itself in conjunction with a good batch of economic data coming out of the US, Germany and the UK in terms of GDP. The FTSE 100 managed to close higher on Friday at 6606.58 despite warnings from S&P that risk of a downgrade remains, after a highly disappointing December in general that saw it slump down to 6439.96 earlier in the month. The EU has had its rating downgraded, but despite this the DAX has managed to keep its head well above water, and even the IBEX closed higher as markets pushed forwards. So what is in store for this week? Certainly volumes are likely to be thinner, and economic data is drying up- only the US will be continuing their usual data offerings up until the new year, and today we will just have German Import price and Spanish producer price data, as well as Italy consumer confidence in Europe. Important to keep an eye on, despite all this, is any developments to the housing saga here in the UK over the festive season. Business Secretary Vince Cable came out yesterday to announce that the Help to Buy scheme must be reviewed, and the “raging housing boom” may need to be countered with an increase to interest rates. This has been concurred with by Andrew Bailey, the deputy governor at the Bank of England who has warned that the Bank of England will use the tools at their disposal to stabilize any bubbles. This news will put a dampener on market exuberance this week and into the new year- the regional divergence on economic growth such a hike, and the pressure it will put on the economy (especially the manufacturing sector) will not be a pleasant prospect for 2014. On the equities side, we have very little company announcements today, but we have seen two big news stories hit over the weekend. Oil giant Shell has announced that they will begin a sale of assets to the value of $30bn next year as a serious fall in profits has been seen. This is being attributed to weak refining margins, and theft of Oil in Nigeria, and so the firm will be selling off at least part of its stakes in Woodside Petroleum and Niger Delta. The news will mean that, despite closing up over 0.8% on Friday they could see a sharp sell off early this morning. Apple has finally announced the confirmed distribution deal with China Mobile, and this will see iPhone’s on sale in China Mobile stores from 17th January. This huge news adds a very important revenue stream for the firm, and so improves their aspirations to increase their 5% market share of the phone market in China at the expense of their competitors.


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