The Quietness of August

Published by Filipe R. Costa on Tue, 07/08/2012 - 11:03
sunney beach

Daily Market Commentary for August 7: Equities edged higher again benefitting from rumours the ECB may soon buy some troubled assets in Europe to help solve the financial crisis. Gold is now around 1,615 helped by the news and a weaker US Dollar.

Investors are much calmer this year than they were last August. Volatility is down as many prepare for some peaceful vacation. Hope I’m not speaking too soon!

The FTSE ended higher 0.48% and is up 4.36% in the year. The Dow rose 0.16% and is up 7.3% in the year. The best performers for the last two days are off course the IBEX and the MIB as these troubled countries are the ones that can benefit the most from any ECB intervention. The Spanish index edged higher more than 10% in two days and the MIB more than 7%.

The news this morning aren’t the best for Standard Chartered. The bank will be under investigation by US authorities over suspicious trades with Iran. Non-US banks have been under too much scrutiny lately as was the case for Barclays, Lloyds, HSBC and now Standard Chartered. Concerns on the possibility of Standard Chartered losing its US banking license and over long-term effects on the bank’s reputation led investors to sell the shares, that currently lose more than 16%. In a poor day in economic and political terms, it may be a good time to take a vacation, or at least, to take the day off.

Name Last price Close Price % 5-Day % YTD %
IBEX 35 06/08/2012 7053.6 4.41 3.7 -17.66
FTSE MIB 06/08/2012 14342 1.54 2.6 -4.96
Gold (LBM) $ 06/08/2012 1614.6 0.84 -0.29 3.04
CAC 40 06/08/2012 3401.56 0.81 2.43 7.65
DAX (Xetra) 06/08/2012 6918.72 0.77 2.14 17.3
Nasdaq 100 Index 06/08/2012 2694.09 0.68 1.97 18.27
Crude oil (Light Sweet) Composite 06/08/2012 91.91 0.55 2.54 -7.16
FTSE 100 06/08/2012 5815.26 0.48 2.14 4.36
EUR/GBP - £ per Euro 06/08/2012 0.7947 0.38 1.86 -4.62
S&P 500 06/08/2012 1394.23 0.23 0.64 10.86
Dow Jones Industrial Average 06/08/2012 13117.5 0.16 0.34 7.37
EUR/USD - US$ per Euro 06/08/2012 1.2387 0.02 1.04 -4.38
GBP/USD - US $ per £ 06/08/2012 1.5586 -0.31 -0.8 0.36