WALL STREET TO KEEP ON CLIMBING POST-FED’S QE

With the Fed confirming the latest round of quantitative easing and the Dow breaking above the April high of 11,258, this now becomes the first level of support for the index. WorldSpreads offer a two-point spread on the Dow Jones index.

US crude oil was given a boost by the Fed decision and positive US jobs data, rallying some 6 per cent this week. But once again it found the $87 line a tough one to pass. This was an important level in April/May but also in late 2007. Look to sell around $87-$87.20 with a target of the $80 support. Spread Co offers a permanent four point spread on December US Crude of $86.5-$86.54.

The Fed’s second round of QE certainly gave the banking sector index the requisite shot in the arm. However, statements from both HSBC and RBS at the end of last week citing potential difficulties in the fourth quarter served as a wake-up call. The sector index is still trading below the highs from April 2010 and with time fast running out, a break higher before the year-end is looking less likely. The current IG Index price on the banking sector index is 5,078-5,088.

Despite equity markets reaching new two-year highs last week, the retail sector suffered from a severe bout of selling. Tuesday’s results from Marks & Spencer could turn things round. Capital Spreads quotes 407.6p-408.5p for the retailer.