THE TIPSTER
AMERICAN investors come back to the market place today after an extended weekend celebrating Independence Day. After the recent falls in global equities, this US public holiday could instigate a renewed sense of optimism and send stock indices higher, even if only temporarily – look to take advantage of a feel-good rally on the Dow Jones Industrial Average. Capital Spreads quotes a price of 9,668-9,670 for the Dow.
Balfour Beatty updates the market today, at the end of what has been a volatile six months for its shares. A 16 per cent rally to the year’s high of 300p in mid-April was followed by a 23 per cent slide to 230p last week, significantly spending the whole week below support at 243p. This area should now prove resistance to the upside, with the 2008 lows of 190p the next obvious target to the downside. Spread Co offers a spread on Balfour Beatty of 235.9p–236.8p.
With fears of a double-dip recession rising again, commodity currencies have suffered over the last week. The loonie has fallen 3 per cent against the US dollar in a week, pushing dollar-Canadian dollar to strong resistance around the C$1.0675 area. A major far-east central bank was a big buyer of the loonie last time we got near C$1.070, so look to sell around C$1.0675–C$1.070 for a move back to C$1.020. Spread Co offers a spread on a dollar-Canadian dollar contract for difference of C$1.0658–C$1.0662.
Despite a possible Dow rally, the overall trend is for a major slowdown from April onwards. This is likely to stay put until business picks up against in the autumn but in the meantime house-builders look particularly set to suffer. According to Fairfax, Persimmon looks expensive. Spreadex quotes Persimmon at 347.6p-349.5p.