Hurricane Sandy forces closure of US markets for first time since 1985 | UK stocks head lower
City Index October 29, 2012 4:06 PM
<p>The FTSE 100 started the new trading week lower by 0.57% as weakness in heavyweight miners and financial stocks weighed on the UK Index. Hurricane […]</p>
The FTSE 100 started the new trading week lower by 0.57% as weakness in heavyweight miners and financial stocks weighed on the UK Index.
Hurricane Sandy closes US markets
US stocks and options markets were closed today and possibly tomorrow due to the arrival of Hurricane Sandy in New York as regulators and firms moved to protect the integrity of the markets and the safety of firms employees. This is the first time a weather induced event has forced the closure of US markets since Hurricane Gloria in 1985. As a result, volumes are expected to be relatively thin in trading, especially this afternoon, and this could serve to add a dose of volatility to the markets.
For now, we have seen European markets head lower, inevitably due in part to concerns about the impact Hurricane Sandy might make on the east coast of the US and the country’s financial hub. It’s natural therefore for investors to trade on the back foot for the start of this new trading week, awaiting developments in New York.
Insurance firms have been a natural target for selling today, with investors worried about escalating costs in the shape of heightened claims relating the likely impact of Hurricane Sandy.
Hargreaves Lansdown shares fell the most however on the day, losing 4.35% as investors reacted to a bearish note from Citigroup, who downgraded their rating on the stock to sell from a previous neutral stance and cut their earnings forecast for the fund management firm. The bank reduced their EPS forecasts by 4% and cut its price target on the firms shares to 620p, a cut of 10p.
UBS shares rose in broader European trading after the investment bank announced aggressive cost cutting plans that would result in the loss of 10,000 jobs. The bank will also split its fixed income operations into a separate division so that it could ultimately be wound down.
Economic Data this week
From an economic data perspective, there is little to come out today apart from personal income and spending data out of the US. Of course with US stocks closed, there will be little ability for US traders to react to this news but European markets could see some fluctuating prices.
Most of the important economic data however comes out later this week. Keep an eye out for Thursday, where the release of Chinese manufacturing data is likely to have a big influence on how mining stocks trade. On Friday, we also see the latest US jobs report in the shape of non-farm payrolls and the unemployment rate. This jobs report could prove pivotal as it’s the last jobs report before next week’s US presidential election and so both candidates are likely to use this to convince swing voters who are undecided on who to vote for as of yet.
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