Although Christmas is coming fast, you’re probably still trying to decide what to get your loved ones. Perhaps equally as important, you’re wondering what it’s all going to cost you. If you’re a new trader looking for ways to make a few extra bucks to help pay off this holiday season, you’ll enjoy this year’s Christmas guide to the financial markets.
When most people think of financial trading, they immediately think of stocks, which are securities that represent a claim on part of a publicly-listed company. Iconic British companies like Burberry, Vodafone, Carnival, Kingfisher and SABMiller are all public companies that not only make great holiday gift ideas, but may be bought and sold on the London Stock Exchange.
It’s important to keep in mind that stock trading can be extremely volatile, partly because investors are emotional and tend to overreact to any kind of information that might impact their position. For this reason, many traders prefer stock indices, which measure the value of only a section of the stock market. This allows traders to minimise risks exposure and track the performance of the market. The most widely used index in the UK is the Financial Times Stock Exchange (FTSE) 100, which tracks share prices of the 100 largest and most actively traded companies on the London Stock Exchange. If you don’t have experience trading stocks, indices like the FTSE may be a great way to start.
Commodities are an important part of the Christmas season. Anyone’s who’s ever received a lump of coal in their Christmas stocking has received a commodity. Tech gadgets from smartphones to handheld gaming devices also contain commodity chips, not to mention jewelry that contain precious metals.
Commodities are raw materials that may be bought and sold on the open market. They include things like precious metals (gold, silver and copper), energy (oil, natural gas and heating oil) and agriculture products (corn, wheat and coffee). Commodities have a huge impact on countries and people. For this reason, they may make excellent trading instruments.
In finance, commodities usually aren’t bought in physical form, but are accessed through futures and forward contracts. So if you decide to buy 10 pounds of cotton in the financial markets, don’t expect it to be shipped to your door.
Have you ever thought about doing your Christmas shopping in the neighbouring Eurozone? After all, 1 euro equals about 0.70 British pounds. That means your sterling may get you a lot more in countries that accept the euro. Have you ever wondered why there’s such a discrepancy in the value of one currency versus another? Currency trading has something to do with it.
The currency market (also known as the foreign exchange or forex for short) is the most liquid financial market in the world. Each day, trading volumes in the currency market exceed $5 trillion. That’s trillion, not billion. What on earth could compel $5 trillion worth of currencies to be exchanged each day? It turns out currency exchange is vital to the global financial system. Governments, multinational banks, hedge funds, private corporations, consumers and traders operate on the foreign exchange to facilitate trade between nations, supply credit and capitalize on price fluctuations. The explosion of online forex trading platforms has made currency trading extremely accessible to the mainstream public.
Trading forex is quite simple, since all currencies are traded in pairs. In forex, a currency pair is the value of one currency in relation to another. For example, the quote GBPUSD (British pound vs. US dollar) signifies how many US dollars are needed to buy one British pound. The GBPUSD is considered one of the four major currency pairs, along with the EURUSD (euro vs. US dollar), USDJPY (US dollar vs. Japanese yen) and USDCHF (US dollar vs. Swiss franc).
The great thing about forex is it’s a 24 hour a day market that operates nonstop between Monday and Friday. That means you may make money at virtually any time during the day.
If you’re new to the financial markets, it might be a good idea to wait until the new-year to start trading. Even the most seasoned traders wind down during Christmas and New Year. After a long year, most traders simply want to enjoy the holidays, drink some eggnog and unwrap their Christmas presents. The good news is, the financial markets described above are active all-year round. If you commit enough time to learn trading strategies and how to apply them in the market, you may begin financing next year’s holiday season as early as January.
Risk warning: Forward Rate Agreements, Options and CFDs (OTC Trading) are leveraged products that carry a substantial risk of loss up to your invested capital and may not be suitable for everyone. Please ensure that you understand fully the risks involved and do not invest money you cannot afford to lose. Our group of companies through its subsidiaries is licensed by the Cyprus Securities & Exchange Commission (Easy Forex Trading Ltd- CySEC, License Number 079/07), which has been passported in the European Union through the MiFID Directive and in Australia by ASIC (Easy Markets Pty Ltd -AFS license No. 246566).
Energy stocks drag down FTSE 100, IG Group slides
By Shivani Kumaresan
(Reuters) – London’s FTSE 100 slipped on Thursday, weighed down by falls in energy stocks as oil prices slid after a surprise increase in U.S. crude inventories, while IG Group tumbled on plans to buy U.S. trading platform tastytrade for $1 billion.
The blue-chip FTSE 100 index lost 0.4%, while the domestically focussed mid-cap FTSE 250 index also slid 0.4%.
Energy majors BP and Royal Dutch Shell fell 3.2% and 2.5%, respectively, and were the biggest drags on the FTSE-100 index. [O/R]
“What is holding back the UK is a lack of tech stocks to capture the ‘rotation’ back into tech seen since Netflix results,” said Chris Beauchamp, chief market analyst at IG.
“Stock markets overall are much quieter today, looking so far in vain for a new catalyst for further upside.”
The FTSE 100 shed 14.3% in value last year, its worst performance since a 31% plunge in 2008 and underperforming its European peers by a wide margin, as pandemic-driven lockdowns battered the economy and led to mass layoffs.
British Prime Minister Boris Johnson said it was too early to say when the national coronavirus lockdown in England would end, as daily deaths from COVID-19 reach new highs and hospitals become increasingly stretched.
IG Group tumbled 8.5% after announcing plans to buy tastytrade, venturing into North America after a stellar year for the new breed of retail investment brokerages.
Ibstock jumped 7.3% to the top of the FTSE 250 after the company said fourth-quarter activity benefited from better-than-expected demand for new houses and repairs.
Pets at Home Group Plc rose 2.2% after reporting an 18% jump in third-quarter revenue, boosted by higher demand for its accessories and veterinary services as more people adopted pets during lockdowns.
(Reporting by Shivani Kumaresan in Bengaluru; editing by Uttaresh.V and Mark Potter)
Wall Street bounce, upbeat earnings lift European stocks
By Amal S and Sruthi Shankar
(Reuters) – European stocks rose on Wednesday after Dutch chip equipment maker ASML and Swiss luxury group Richemont gave encouraging earnings updates, while investors hoped for a large U.S. stimulus plan as Joe Biden was sworn in as president.
The pan-European STOXX 600 index closed 0.7% higher, getting an extra boost as Wall Street marked record highs.
All eyes were on Biden’s inauguration as the 46th U.S. President, with traders betting on a bigger pandemic relief plan and higher infrastructure spending under the new administration to boost the pandemic-stricken economy.
Tech stocks rallied to a two-decade peak in Europe after ASML Holding NV rose 3.0% to all-time highs on better-than-expected quarterly sales and a strong order intake for 2021.
Meanwhile, Richemont rose 2.8%, after posting a 5% increase in quarterly sales as Chinese splashed out on Cartier, its flagship jewellery brand.
Britain’s Burberry jumped 3.9% after it stuck to its full-year goals, saying higher full-price sales would boost annual margins, while Asian demand remained strong.
The pair boosted European luxury goods makers that are heavily reliant on China, with LVMH and Kering gaining between 1% and 3%.
“Any sign that retail spending is picking up in China is going to be a boost to the Western markets and those heavily exposed to it,” said Connor Campbell, financial analyst at SpreadEx.
The European Central Bank is set to meet on Thursday. While no policy changes are expected, the bank could face more questions about an increasingly challenging outlook only a month after it unleashed fresh stimulus to bolster the euro zone economy.
“With the new round of easing measures fully in place and no new forecasts to be presented tomorrow, it should be a fairly uneventful day for the euro,” ING analysts said in a note.
Italy’s FTSE MIB gained 0.9% and lenders rose 1.6% after Prime Minister Giuseppe Conte won a confidence vote in the upper house Senate and averted a government collapse.
Conte narrowly secured the vote on Tuesday, allowing him to remain in office after a junior partner quit his coalition last week in the midst of the COVID-19 pandemic.
Daimler AG jumped 4.2% after its Mercedes-Benz brand unveiled a new electric compact SUV, the EQA, as part of plans to take on rival Tesla Inc.
Germany’s Hugo Boss added 4.4% after Mike Ashley-led Frasers said it boosted its stake in the company.
(Reporting by Sruthi Shankar and Amal S in Bengaluru; Editing by Shailesh Kuber and Arun Koyyur and Kirsten Donovan)
Miners lead FTSE 100 higher on earnings cheer
By Shivani Kumaresan
(Reuters) – UK’s FTSE 100 rose on Wednesday as miners gained after a strong production forecast from BHP Group, while encouraging updates from luxury brand Burberry and education group Pearson drove optimism about the earnings season.
BHP Group Ltd climbed 2.8% after it forecast record iron ore production for fiscal 2021, helped by high prices for the commodity. Other miners Rio Tinto, Anglo American and Glencore rose more than 2%.
Global markets rallied in anticipation of more fiscal spending as Joe Biden prepared to take charge as the 46th U.S. president.
“There is a view in the markets that more spending is in the pipeline, after all, Mr Biden will want to start his presidency on a positive note,” said David Madden, market analyst at CMC Markets UK.
The FTSE 100 index rose 0.4% and the domestically focussed FTSE 250 index added 1.4%.
The FTSE 100 has recorded consistent monthly gains since November after the sealing of a Brexit trade deal and hopes of a vaccine-led economic recovery, but has recently lost steam as tighter business restrictions sparked fears of a slow rebound.
Burberry rose 3.9% as it stuck to its full-year goals and said higher full-price sales would boost annual margins and Asian demand remained strong.
Global education group Pearson jumped 8.6% after its global online sales grew 18% in 2020, helped by strong enrolments in virtual schools.
WH Smith Plc surged 10.4% to the top of the FTSE 250 index as its trading during Christmas was ahead of its expectations.
(Reporting by Shivani Kumaresan in Bengaluru; editing by Uttaresh.V, William Maclean)
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