Spreadex Market Analysis: Global Markets Holding Strong

Spreadex Market Analysis Update – Monday, November 4, 2013

AM Analysis – “Asian indices trade higher across the board” – Alex Conroy
Asian indices traded higher across the board through the night on the back of a 14-month high in China’s official services sector activity and further bolstered by Australian retail sales. China’s services PMI rose to 56.3 during October, up from 55.4 in September. Investors are worried however that the significant growth demonstrated in China could stall when an attempt to rebalance through tapering occurs.

Comments made by the Confederation of British Industry today will raise the issue of the UK’s membership to the EU today, with business leaders urging David Cameron to oppose the creeping extension of EU authority. This seems to support Cameron’s previous position which supported the UK remaining in the EU with a desire to renegotiate the UK’s terms of membership. Divided public opinion on the matter could lead to this being a heavily debated topic today.

The Co-Operative group today confirmed that in order to cover a £1.5 capital shortfall the banking arm of the company will be sold off. Whilst the Co-op group has stated it will remain the largest shareholder plans to list the bank on the LSE are underway. In other banking news HSBC holdings is expected to announce a 10% rise in profits for Q3 aided by cost cuts with operating costs down $1.5 billion dollars from a year ago.
PM Analysis – “Global markets are holding strong” – Max Cohen
Despite continued Federal Reserve tapering concerns, global markets are holding strong with European indices broadly trading higher and U.S futures looking bullish. Traditionally, equities finish the year with a flourish as investors are of the opinion that gains built up over the first 10 months will expand. Instead of selling shares to lock in profits during rallies, investors almost always add to them in the final quarter.


The S&P 500’s return has been positive over November and December every year since the markets began to recover in 2009. In fact, December has had the second-best returns of any month, with the S&P 500 climbing an average 1.5 percent since 1928. Now, up more than 160 percent since 2009, earnings expanding for the last four years and the Fed’s $2.3 trillion of bond purchases has kept interest rates low spurring growth.

Expanding at its fastest pace in more than 6 years, British construction is said to be rising “like a phoenix from the ashes”. Construction PMI rose to 59.4 in October, beating economists' expectation that it would hold steady at September's reading of 58.9. Economists will now turn their attention to Tuesday's services PMI, which covers private-sector firms outside the retail sector and casts light on a much larger part of the British economy than construction.

[The original articles by Spreadex can be found here.]

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