August 2010

U.S. Equities Close Near 12-Week High as Investors Await Results of FOMC Meeting

U.S. Session Key Developments

•    Speculation Arising that Fed May Introduce Another Round of Quantitative Easing
•    No data releases for U.S. Leaves Room for Recovery Optimism

U.S. Equities Close Near 12-Week High as Investors Await Results of FOMC Meeting

U.S. equity markets built on last week’s rally on Monday, with each index pushing further into positive territory for 2010. The NASDAQ gained the most, up three-quarters of a percent, while both the DJIA and S&P gained approximately one-half of a percent. The three indices are now at levels not seen for the past 12-weeks, as significant rallies by the Pound, Euro, and commodity currencies have exhibited renewed investor confidence in financial markets. Although some economists believe that the recovery is slowing, as evidenced by slowing factory orders, and an expected increase in U.S. Wholesale Inventories, sentiment is gathering that as long manufacturing and service indicators continue to show signs of expansion, growth will be sustained, and earnings will be boosted in the remaining months of 2010. The DJIA is now up 2.60 percent on the year, while the S&P and NASDAQ are up 1.14 percent and 1.61 percent, respectively.

Going forward, tomorrow could prove volatile as a flurry of U.S. economic data will be released during the Tuesday session. Nonfarm Productivity data for the second quarter is expected to show an increase, up 0.2 percent, though down from the 2.8 percent reading previously. IBD/TIPP Economic Optimism, a measure of small business confidence, is expected shortly after the session open. The Federal Open Market Committee Rate Decision, though expected to hold the key interest rate at 0.00-0.25 percent, will likely provide the greatest amount of event risk in the session. Although no change in rate is anticipated, investors are interested in the FOMC’s rhetoric going forward; it is expected that the Federal Reserve may expand stimulus for some time. Finally, in what is typically held lightly due to its release after the market close, the ABC Consumer Confidence reading for the period of August 8 will be announced at 17:00 EST. Currently, Confidence sits at -50.

DJIA 30                     10,698.75                      +45.19                       +0.42%

The Dow Jones Industrial Average gained 45.19 points, or 0.42 percent, during intraday trading to close at 10698.75. After opening nearly 40 points higher, the index entirely retraced its early move within the first 30 minutes of the session before advancing steadily to close just below 10700. The DJIA 30 was led by Cisco Systems, whose share price added 2.78 percent to close at 24.76. Hewlett-Packard was the worst performing company listed as part of the Dow; HP’s shares lost an astounding 8.01 percent following the announcement that Chief Executive Mark Hurd would be leaving the company in the aftermath of recent sexual harassment allegations. The company’s share price is testing its 52-week low of 41.94, ending the session trading at 42.59.

S&P 500                       1,127.78                        +6.14                         +0.55%

The broad-based S&P 500 finished up 6.14 points, or 0.55 percent, to close at 1127.78 after Monday’s trading session. The S&P now sits at its highest level since May amid speculation the FOMC might introduce new quantitative easing measures to stimulate growth at its meeting tomorrow. All ten of the index’s sectors posted gains today, with the telecommunications and consumer services sectors outperforming the rest. Sprint Nextel led the way, gaining 2.92 percent intraday to close at 4.58. Shares of Sprint have gained over 25 percent year-to-date, making it one of the top performing companies listed on the S&P 500.

NASDAQ                     2,305.69                       +17.22                       +0.75%

The NASDAQ outperformed its American counterparts on Monday, adding 17.22 points, or 0.75 percent, to close at 2305.69. The tech-based index has been unable to hold on to its gains beyond the significant 2300 level in recent weeks, but a breakout may be on the horizon (see below). Shares of Research in Motion (RIMM) surged following an announcement the company would cave to Saudi Demands regarding its privacy policy. The company saw its share price gain 3.50 percent intraday to close at 55.32.

Written by Jay B. Steinberg and Christopher Vecchio, CFD Trading Analysts
For Questions/Comments, please contact him at JSteinberg@fxcm.com

European Stocks Jump Ahead of FOMC Meeting

Europe Session Key Developments

• German Trade Data Shows Bump in Exports
• Euro-Zone Sentix Investor Confidence Surges

European Stocks Jump Ahead of FOMC Meeting

European equity markets gained on Monday as trade data from Europe’s largest economic state boosted recovery optimism. German Trade Balance figures from June showed a further increase in the surplus, edging up to €14.1 billion from €9.8 billion in May. While Imports increased over the same period, Exports increased by a greater amount, up by 3.8 percent. In what was a particularly quiet day for newsworthy data releases, the Euro-zone Sentix Investor Confidence reading for August surged to 8.5 from -1.3 in July, outpacing a Bloomberg forecast of 1.6. As the results of the CEBS Banks’ Stress Tests have fully begun to sink in, it appears that sentiment has gathered that the health of the European financial sector is strong enough to hold off a ‘double-dip recession,’ despite continued problems that excess sovereign debt might pose to the economic union. Overall, all five major European equity markets were up over 1.2 percent, with the French exchange gaining the most, up 1.65 percent.

Looking forward to Tuesday, there are several events which pose risk to market volatility. Early in the European session, German inflation data will be released, with the Consumer Price Index for July expected to rise 1.1 percent as ECB key interest rates remained on hold. Both French Manufacturing and Industrial Production are expected to increase from June in the previous year, though month-over-month data remains muddled. The British Trade Balance is expected to improve, from -£8062 million in May to -£7800 million in June. Finally, what could prove to be market moving later in the session, U.S. Wholesale inventories figures for June is expected to increase by 0.4 percent; high Wholesale Inventories indicate that unsold goods are piling up, suggesting that retailers are facing lagging consumer demand and unwilling to purchase goods.

FTSE 100                      5410.52                   +78.13               +1.47%

The FTSE 100 finished up 78.13 points, or 1.47 percent, breaking through the 5400 level before closing at 5410.52. The British index now sits just 0.04 percent lower year-to-date. Though the recovery from May’s ‘flash crash’ has been relatively steady thusfar, the FTSE has failed to hold on to any upside momentum beyond 5400. During today’s trading session, all ten of the sectors that comprise the FTSE 100 finished higher; the consumer goods and financials sectors were the top performers, gaining 1.84 and 1.73 percent, respectively. Barclays PLC, one of the nation’s largest banking institutions, saw its share price add 3.20 percent to close at 335.00. Shares of embattled oil giant BP posted a 1.74 percent increase to close at 432.75 in London.

CAC 40                       3,776.33                  +60.28                 +1.62%

The CAC 40 index opened nearly 50 points higher on Monday, and then proceeded to float within a tight range of 3760-3780 before closing near the upper bound at 3777.37. The 60.28 point (1.62 percent) increase was a stark turnaround from the near 50 point selloff on Friday. While all ten of its sectors gained, the French index was pushed higher by its financials and oil & gas sectors, which gained 1.97 percent and 1.91 percent, respectively. Shares of BNP Paribas, the country’s largest bank, closed 2.24 percent higher at 56.96. Total S.A. (FP), an international leader in oil & gas exploration, benefitted from the improvement in investor sentiment. The company’s share price posted a 2.00 percent gain to close at 40.81.

DAX 30                        6351.60                    +91.97           +1.47%

After dropped almost 74 points on Friday, the DAX 30 index more than retraced its decline by posting a 91.97 point, or 1.47 percent, increase today. The German index now sits 6.62 percent higher in 2010, making it the top performing European equity index and the only one to remain positive on a year-to-date basis. The DAX seems poised to re-test the critical 6380 level, which has served as resistance since early April. Though all nine of the index’s sectors finished higher Monday, the industrials sector fare especially well, adding 2.19 percent during intraday trading. Siemens AG, one of Germany’s largest manufacturers, gained 2.76 percent to close at 78.45, just below its 52-week high of 79.65.

IBEX 35                     10812.60                   +161.50                +1.52%

The IBEX 35 gained 161.50 points, or 1.52 percent, during intraday trading to finish at 10812.60. The Spanish index opened nearly 150 points higher, which almost completely retraced the index’s loss on Friday following the disappointing U.S. Non-Farm Payrolls report. On Monday, all ten of the IBEX’s sectors gained; the consumer goods and industrials sectors were the top performers, posting a 1.98 percent and 1.92 percent increase, respectively. Gamesa Corporacion Technologica (GAM SQ), a manufacturer of wind turbines, was the only company listed on the IBEX whose share price declined; it finished at 6.44, down 0.39 percent.

S&P/MIB                  21341.62                   +257.15                  +1.22%

The S&P/MIB posted a remarkable 257.15 point, or 1.22 percent, gain on Monday, finishing the trading session at 21341. Despite falling nearly 100 points at the beginning of the US session, the Italian index managed to re-assert itself and hold on to its gains from earlier in the session.

Written by Jay B. Steinberg and Christopher Vecchio, CFD Trading Analysts
For Questions/Comments, please contact him at JSteinberg@fxcm.com

European Stocks Tumble as Data Weighs on Recovery Optimism

Europe Session Key Developments

• German, UK Industrial Production Falls Short of Forecasts
• U.S. Labor Market Continues to Shed Jobs, though Unemployment Holds

European Stocks Tumble as Data Weighs on Recovery Optimism

European equity markets fell on Friday, shedding some of their gains from early week jumps as data across the globe disappointed investors. Industrial Production data from both Germany and the UK showed signs of contraction, contrary to slight expansion forecasted, according to a Bloomberg survey. UK Industrial Production withdrew by 0.5 percent in June versus 0.1 percent expansion expected, after rising by rising by 0.7 percent in May. The trend was similar in Germany, where Industrial Production was expected to by 0.5 percent for July but in fact declined by 0.6 percent. Despite these data, both Bank of England and European Central Bank policy makers were upbeat yesterday in their assessment of their economies, believing that while recent numbers suggest improvement across all industries, accommodative monetary policy must continue for some time. However, in what proved to be the most market moving data on Friday, the U.S. labor market continued to show signs of a choppy recovery, with Non-Farm Payrolls declining by 171 thousand jobs. Although both U.S. Private Payrolls and Manufacturing Payrolls expanded in July, buoying the Unemployment rate at 9.5 percent, European equity markets fell across the board upon the data release. Overall, all five major markets declined, with the IBEX dropping the most, down nearly one-and-three-quarters of a percent.

Looking to Monday, only two events from Europe likely will influence equity markets. First, German Trade Balance data for June is due, which, buoyed by a weaker Euro and strong exports, is expected to increase to €12.0 billion. Later in the session, the Euro-zone Sentix Investor Confidence measure for August is forecasted to rise to 2.0 from -1.3 in July.

FTSE 100                      5332.39                   -33.39               -0.62%

The FTSE 100 index declined again during intraday trading, losing another 33.39 points, or 0.62 percent, to finish at 5332.39. The British index now sits down 1.49 percent year-to-date after managing to turn positive last week. Nine of the FTSE’s 10 sectors lost on Friday. The consumer goods sector particularly weighed on the index, losing 1.52 percent during intraday trading. Unilever PLC (ULVR LN), one of the U.K.’s largest manufacturers of branded and packaged consumer goods, lost another 2.71 percent after dropping 5.19 percent yesterday.  The telecommunications sector acted as the lone bright spot, adding 0.94 percent. Vodafone Group managed to gain 1.13 percent to close at 152.25; the company’s share price is now testing its 52-week high of 153.80 that was set back in April.

CAC 40                       3,717.73                   -46.46                 -1.23%

The CAC 40 suffered a 46.46 point, or 1.23 percent, selloff on Friday to finish the week at 3717.73. It now stands down 5.55 percent year-to-date. The French index traded sideways until the shocking U.S. Non-Farm Payrolls report, when it dropped over 60 points in a matter of minutes. The CAC’s utilities sector was the worst performer, losing 2.05 percent. The sector has now given back nearly all of its gains from earlier in the week. Only 2 of the 40 companies listed as part of the CAC 40 finished higher on Friday, the more notable being Societe Generale. The bank’s share price 0.30 points, or 0.65 percent, to close at 45.52.

DAX 30                        6259.63                    -73.95                 -1.17%

On Friday, the DAX 30 dropped 73.95 points, or 1.17 percent, to close at 6259.63. The German index now sits 5.07 percent higher year-to-date, making it the only major European equity index to remain in positive territory in 2010. Prior to dropping 100 points after the NFP report, the DAX tested the significant 6380 level but failed to break though. The health care sector was the only sector that managed to finish higher on Friday; it edged up a modest 0.08 percent. The index was weighed by its consumer goods sector, which lost 1.82 percent. Daimler AG and Volkswagen lost 2.75 percent and 2.15 percent, respectively.

IBEX 35                     10651.10                   -188.90                -1.74%

The IBEX 35 was the worst the biggest loser out of all the major European equity indices on Friday. The Spanish index lost 188.90 points, or 1.74 percent, to end the week at 10651.10. It is now down 10.79 percent year-to-date. Though all of the IBEX’s ten sectors finished lower, the financial companies’ performance was particularly disappointing.  The financial sector, which accounts for over 40 percent of the entire index, gave back 2.25 percent during intraday trading. Shares of Banco Santander, the nation’s largest bank and the index’s largest holding (22.69 percent), lost an astounding 2.60 percent to close at 10.11.

S&P/MIB                21084.47                    -218.50                  -1.03%

The S&P/MIB dropped 218.50 points, or 1.03 percent, to finish at 21084.47. The Italian index had opened the day up nearly 200 points, but after the disappointing economic release out of the United States, it dropped 400 points before closing at its current level. The MIB is now 9.31 percent lower in 2010.

Written by Jay B. Steinberg and Christopher Vecchio, CFD Trading Analysts
For Questions/Comments, please contact him at JSteinberg@fxcm.com

U.S. Equities Decline on Jobless Claims, Chain Store Sales

U.S. Session Key Developments

•    Initial Jobless Claims Rise Last Week By Most in Three Months
•    July ICSC Chain Store Sales Decline From Month Prior
•    Commodities Continue Ascent, Led By Surging Wheat Prices

U.S. stocks declined for a second day this week as an unexpected rise in American initial jobless claims and continuing claims stoked concerns that the U.S. recovery is stalling.  The weakness in equities caused the Dow Jones Industrial Average to dip to 10674, while the S&P 500 fell to 1125.  The jobs data, released by the Labor Department one hour before U.S. trading began, showed that initial jobless claims rose by 19,000 to 479,000 in the week ended July 31, the most since April and worse than the most bearish economic forecasts.  Continued claims were also higher than expected, rising to 4.53 million in the week ended July 24.  The employment data seemed especially concerning to investors today, due to concerns that it could be a bearish precursor to tomorrow’s nonfarm payrolls release at 12:30 PM GMT.  The consensus estimate is for a drop of 65,000 in July nonfarm payrolls, compared to a decline of 125,000 in the month prior.  Furthering the bearish case today was the ICSC Chain Store Sales release, which showed that sales at 30 chain stores climbed 2.8 percent in July, falling short of last month’s 3.0 percent gain.  The data fell short of forecasts and further eroded sentiment, sending risky assets lower and pushing the two-year Treasury note yield toward an all-time low, at 0.53 percent.

On the commodities front, agriculture continued its strong showing, led by wheat contracts, which rose over 7.9 percent to $815.25 on the CBOT.  The move came after an announcement from Prime Minister Vladamir Putin that Russian farmers would no longer be allowed to export the commodity due to the country’s worst drought in 50 years.  Other commodity classes posting strong gains today included metals, led by 1 percent gains for aluminum and copper, while silver and gold futures rallied 0.4 percent and 0.1 percent on the COMEX, respectively.  The active gold contract closed the day above the $1197 level, a seventh consecutive gain for the yellow metal and its highest closing price since July 15.

DJIA 30                      10,674.98                    -5.45                -0.05%
The Dow Jones Industrial Average dipped slightly lower today, as sixteen of its 30 bluechip stocks closed lower on the day.  American Express posted the largest decline, dropping over 2 percent after hinting at possible changes to its financial targets.  Other firms pulling down the index included Pfizer, which fell 1.5 percent, and Microsoft which declined 1.4 percent.  Caterpillar, on the other hand, posted the largest gain on the Dow, rallying 1.1 percent after announcing an expansion and new hiring at a North Carolina factory.

S&P 500                               1,125.81                               -1.43                      -0.13%
The broad-based S&P 500 fell for a second time this week, led by a 0.4 percent decline in financial shares.  Bank stocks were especially weak, dropping over 0.5 percent after Goldman Sachs announced it may spin off part of its proprietary trading operations into an independent entity.  The investment bank’s share price fell by 0.5 percent as a result, while shares of U.S. Bancorp and Bank of America dropped over 1 percent.  Furthering index weakness today were retailers, led by a 7.7 percent decline for J.C. Penney, after the third-biggest U.S. department-store announced a 0.6 percent decrease in July sales.

NASDAQ                              2,293.06                               -10.51                    -0.46%
The tech-heavy Nasdaq posted the biggest loss among major U.S. indices, dropping nearly half of one percent on weakness in technology shares.  Research in Motion contributed heavily to the move, falling over 2 percent to $52.23, its lowest closing level since July 8.  Shares of the Blackberry maker have dropped over 30 percent since April.

Written by James Russell, CFDTrading Research
Please send any comments about this report to JRussell@fxcm.com

Major European Indices Finished Mixed Despite Thursday’s Notable Event Risk

Europe Session Key Developments

• Encouraging German Factory Orders Fail to Move Markets
• ECB, BoE Keep Overnight Lending Rates Steady

Major European Indices Finished Mixed Despite Thursday’s Notable Event Risk

European equity markets finished Thursday relatively unchanged despite major event risk throughout the session. Early in the session, German Factory Orders for June outpaced analysts’ forecasts, expanding by 3.2 percent against a predicted 1.4 percent gain. Following the surprising data, German Bund yields dropped across the board. Unsurprisingly, both the Bank of England and European Central Bank held their interest rates at 0.50 percent and 1.00 percent, respectively. The Bank of England also announced that it would retain its Asset Purchase Target at £200 billion. While ECB President Trichet declared that there would be “no chance” of a “double-dip” recession thus rendering the current rate appropriate, he did note that the ECB will do whatever is necessary to halt any further backlash from the sovereign debt crisis. Despite this positive sentiment, investors were unimpressed with the news and equity markets barely moved. The FTSE, IBEX, and S&P/MIB all fell less than 0.8 percent, while both the CAC and DAX crept up by less than 0.1 percent each.

Looking ahead to tomorrow, significant data coming from across Europe and the United States could prove to be market moving. British Industrial Production data for June is expected to show 0.1 percent expansion while the Producer Price Index for July is forecasted to drop by 0.5 percent. Additionally in Europe, German Industrial Production data for June and Italian Gross Domestic Product for the second quarter will be released as well. However, in what will likely be the most important data released on Friday, U.S. Non-farm Payroll data, as well as the Unemployment Rate, for July will be released in the second half of the European trading session. With Payrolls expected to drop, and the Unemployment Rate forecasted to increase to 9.6 percent in the United States, Friday could prove to be a volatile trading day across equity markets and currencies.

FTSE 100                      5365.78                   -20.38               -0.38%

Continuing yesterday’s decline, the FTSE 100 gave back another 20.38 points, or 0.38 percent, to finish at 5365.78 after Thursday’s trading session. The British index now sits down 0.87 percent year-to-date after managing to turn positive last week.  Today’s price action was guided by a disappointing performance by the FTSE’s consumer goods sector, which dropped 2.10 percent. Unilever PLC (ULVR LN), one of the U.K.’s largest manufacturers of branded and packaged consumer goods,  lost 5.19 percent. Also noteworthy was Barclays PLC, which dropped 4.66 percent to finish at 324.00 in London.

CAC 40                     3,764.19                  +3.47                 +0.09%

The CAC 40 managed to finish up 3.47 points, or 0.09 percent, to close at 3764.19. Despite testing the psychologically significant 3800 level during intraday trading, the French index retraced following the central bank announcements discussed above. Out of the index’s ten sectors, five finished higher.  The industrial sector benefitted from the encouraging German Factory Orders figure, adding 0.96 percent. The sector’s top performer was EAAD FP, an airplane and military equipment manufacturer; the company’s share price gained 2.95 percent to close at 18.68. Following up from yesterday, Electricite de France (EDF) retraced part of Wednesday’s gains, giving back 1.02 percent. Recall that French Finance Minister Christine Lagarde announced that power rates in the country will rise by 3 percent for households and 4-5.5 percent for companies on August 15th

DAX 30                        6333.58                    +2.25           +0.04%

On Thursday, the DAX 30 again tested the 6380 level, which has served as significant resistance since this April. After reaching an intraday high of 6382.56, the DAX retreated late in the session and closed at 6333.58, just 2.25 points, or 0.04 percent, higher. The DAX 30 as a whole was unable to hold onto its early gains following the encouraging domestic Factory Orders report, but the industrials and basic materials managed to lock in substantial gains (1.05 percent and 1.00 percent, respectively). Siemens AG led the industrial sector, finishing up 1.46 percent to close just below its 52-week high at 78.00. Deutsche Telekom dragged the broader index lower, losing 2.76 percent to end the trading session at 10.21.

IBEX 35                     10840.30                   -3.30                -0.03%

Like its European counterparts, the IBEX 35 finished nearly even after Thursday’s trading session. Despite trading 100 points higher at 11:00 GMT, the Spanish index gave back a modest 3.30 points, or 0.03 percent, to close at 10840.30. The index’s financial sector, which accounts for over 40 percent of the broader IBEX’s weight, finished up 0.09 percent. Banco Santander, the nation’s largest bank and the index’s largest holding, gained 0.29 percent to close at 10.38. Both the utilities sector and the consumer services sector weighed on the index, losing over 0.30 percent each.

S&P/MIB                        21302.97                    -163.47                  -0.76%

After trading above the 21550 mark intraday, the Italian index lost over 163 points, or 0.76 percent, to close at 21302.97. The MIB may soon surpass the IBEX 35 as the worst performing major European index year-to-date; it is currently down 8.37 percent in 2010.

Written by Jay B. Steinberg and Christopher Vecchio, CFD Trading Analysts
For Questions/Comments, please contact him at JSteinberg@fxcm.com

Crude Oil Holdings Steady Despite Elevated Inventories, Gold Win Streak

Written by Ilya Spivak and Sumit Roy, CFDTrading.com

European Equities Mixed, Buoyed by U.S. Recovery Optimism

Europe Session Key Developments

• European Equity Indices Begin Lower But Finished Mixed by Day’s Close
• Tomorrow’s Event Risk Should Prove to be Market Moving for Equities

European Equities Mixed, Buoyed by U.S. Recovery Optimism

European equity markets saw their rally stemmed as global data shook investor sentiment regarding a full recovery. Early in the Euro session, Chinese officials announced that regulators are preparing for a steep decline in housing prices, totaling up to potentially 60 percent of value losses on real estate values. However, at the end of the trading day Wednesday, investors found silver lining in reports coming from the United States, which showed expansion in the U.S. service sector. The ISM Non-Manufacturing Composite, an index which measures the rate of expansion or contraction in the service industry, expanded to 54.3 in July from 53.8 in June. According to Bloomberg, the median expectation was that the composite would fall to 53.0. Overall, the FTSE, IBEX, and S&P/MIB lost less than 0.30 percent each, while the CAC and DAX were up by more than 0.35 percent, respectively.

Looking ahead to tomorrow, there is a flurry of economic data that will prove market moving. German Factory Orders for June are expected to show expansion by 1.4 percent. However, the Bank of England and European Central Bank Rate Decisions will prove to be more market moving. While both central banks are expected to leave rates on hold, investors will pay attention to the rhetoric employed, in order to gauge the strength and confidence of the recovery.

FTSE 100                      5386.16                   -10.32               -0.19%

The FTSE 100 finished another 10.32 points lower, or 0.19 percent, to close at 5386.16 after intraday trading. The British index was largely mixed, with five sectors finishing higher and five losing ground on Wednesday. The telecommunications sector was the top performer, adding 0.95 percent; it was led by Vodafone, which finished up 1.32 percent to close above 150. The FTSE was weighed by its financial sector, which gave back 0.64 percent. Standard Charter’s performance was particularly disappointing; the company’s share price retraced 5.18 percent despite reporting a 10 percent increase in 1H profits.

CAC 40                     3,760.72                  +13.21                 +0.35%

Despite its British counterpart’s weakness, the French CAC 40 managed to finish higher despite being down nearly 25 points during today’s trading session. The CAC has been trending higher since the middle of June when it reached a low of 3321. The index was led higher by its utilities and health care sectors, which added 1.22 and 1.13 percent, respectively. However, the best performer on the day was Electricite de France, or EDF SA, which gained 5.48 percent today after the French Finance Minister Christine Lagarde announced that power rates in the country will rise by 3 percent for households and 4-5.5 percent for companies on August 15th.

DAX 30                        6331.33                    +23.42           +0.37%

The DAX 30 added another 23.42 points today, or 0.37 percent, to close at 6331.33. The German index remains the only major European equity index to remain in positive territory year-to-date, now up a remarkable 6.28 percent. Unlike the FTSE 100, the DAX benefitted from an impressive performance out of its health care companies. However, despite adding 1.91 percent during Wednesday’s trading, the healthcare sector comprises only 3.12 percent of the broader DAX index and therefore, was not the predominant market mover. The utilities and basic materials sectors, which combine for roughly a third of the index’s weight, gained 1.12 and 0.94 percent respectively. The only losing sector was the industrial sector, which was dragged down by Siemens AG, losing 1.17 percent.

IBEX 35                     10843.30                   -28.10                -0.26%

The IBEX 35 finished down only 28.10 points, or 0.26 percent, to close at 10843.30 after falling to near 10750 during intraday trading. The index managed to post somewhat of a rally during the opening hours of the US session. The financial sector, which accounts for over 40 percent of the IBEX’s weight, closed down 0.44 percent. Both the telecommunications and utilities sectors finished near even, losing 0.06 and 0.04 percent, respectively. The Spanish index remains the worst performing major European index year-to-date, down over nine percent. However, with that said, the IBEX has rebounded from a low of near 8700 in the beginning of June.

S&P/MIB                        21466.44                    -31.88                  -0.15%

The Italian index gave back 31.88 points, or 0.15 percent, to close at 21466.44 after Wednesday’s trading session. Despite its impressive performance in the last two months, the MIB remains down over seven percent year-to-date.

Written by Jay B. Steinberg and Christopher Vecchio, CFD Trading Analysts
For Questions/Comments, please contact him at JSteinberg@fxcm.com

Gold ETF Holdings Tumble

We have written extensively about the extremely strong relationship between gold ETF holdings and gold prices. For much of this year, that relationship benefited gold, as both holdings and prices relentlessly increased. The trend has obviously reversed over the past month, but interestingly, prices led the decline in holdings.

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