Trade the FTSE at the Spending Review?

getzegold

Anyone thinking of buying/selling the FTSE at the spending review?
If the News is really bad and most expect it to be bad there will no doubt be winners and loosers in the FTSE. Be interesting to see how the markets digest the news and what the reaction will be.

Having thought about it a bit I reckon the only winners from deep cuts will be companies like poundland, lidl, aldi, debt counselling companies and bankruptcy lawyers. The losers? ...everything else.

Californication

getzegold wrote: »

Anyone thinking of buying/selling the FTSE at the spending review?
If the News is really bad and most expect it to be bad there will no doubt be winners and loosers in the FTSE. Be interesting to see how the markets digest the news and what the reaction will be.

Having thought about it a bit I reckon the only winners from deep cuts will be companies like poundland, lidl, aldi, debt counselling companies and bankruptcy lawyers. The loosers? ...everything else.

Lidl and Aldi aren't in the FTSE. Not sure about the others.

getzegold

Californication wrote: »

Lidl and Aldi aren't in the FTSE. Not sure about the others.

Sorry yes I'm talking about 2 diff things, actually trading the FTSE on the day and then also using a broker to pick specific stocks that may be affected by the age of austerity

gt94sss2

getzegold wrote: »

Sorry yes I'm talking about 2 diff things, actually trading the FTSE on the day and then also using a broker to pick specific stocks that may be affected by the age of austerity

All that will happen on Wednesday is that the outline budgets for government departments for the next 4 years (from April 2011) will be announced.

Most of this is already known and thus probably already priced in, i.e.:

- 25% cut in each department on average over this time period
- some departments, (MOD, Education) will have a smaller cut, which means others will suffer bigger cuts to reach the 25% average
- International Aid ringfenced etc.

It will take longer for departments to work out what this means for each of them - and thus their suppliers..

Regards
Sunil

getzegold

gt94sss2 wrote: »

All that will happen on Wednesday is that the outline budgets for government departments for the next 4 years (from April 2011) will be announced.

Most of this is already known and thus probably already priced in, i.e.:

- 25% cut in each department on average over this time period
- some departments, (MOD, Education) will have a smaller cut, which means others will suffer bigger cuts to reach the 25% average
- International Aid ringfenced etc.

It will take longer for departments to work out what this means for each of them - and thus their suppliers..

Regards
Sunil

Most probably your right but there could be a couple of things announced that the market isn't expecting and, as the market is fueled by sentiment, could have an effect.

sabretoothtigger

Isnt there a budget in december

the majority of ftse profits originate outside the uk. If theres some government type shock, the currency will go down in worth and the stock price will adjust upwards to reflect foreign earnings not effected.
Even tesco has increasingly larger income from asia


Aldi might be on the german dax, the euro has increased recently

Loughton_Monkey

getzegold wrote: »

Anyone thinking of buying/selling the FTSE at the spending review?.

Ideal time to shove an OCO order on your spread betting/CFD account. Buy at 15 points above. Sell at 15 points below, whatever FTSE is doing at the time.

But if it heads up, then sell quickly and bank it before he makes any statement of 'banker bonus bashing'. If it's already down, then sell more and watch profits double when he gets to that bit.

getzegold

Loughton_Monkey wrote: »

But if it heads up, then sell quickly and bank it before he makes any statement of 'banker bonus bashing'. If it's already down, then sell more and watch profits double when he gets to that bit.

:rotfl:, yes quite. hadn't thought of that.

getzegold

sabretoothtigger wrote: »

Isnt there a budget in december

the majority of ftse profits originate outside the uk. If theres some government type shock, the currency will go down in worth and the stock price will adjust upwards to reflect foreign earnings not effected.
Even tesco has increasingly larger income from asia


Aldi might be on the german dax, the euro has increased recently

Not the point really, even though many companies might make profits elsewhere a very large proportion of investors are uk based and if they take fright that these cuts are just way too deep and their favourite public sector supply related or consumer based spending companies are about to get a bigger than expected hit to their bottom line it could set of a train of panic selling amongst the nervous nellies. add to that the hedge funds selling short to make a profit and theres a possibility the market could drop a fair few points on the day, providing an excellent opportunity to make some money. Its a possibilty thats all but we'll see on the day. Perhaps the cuts won't seem so bad and the market will issue a collective sigh of relief pushing the FTSE up, again a chance to make some money. worth considering imo.

sabretoothtigger

Most private investors in ftse might be uk but private investors are 1% of the market

getzegold

sabretoothtigger wrote: »

Most private investors in ftse might be uk but private investors are 1% of the market

very true but what percentage are pension funds or uk based managed money? who are also uk 'investors'/traders