Indices in full retreat as Greece weighs

As the last full FTSE session of the year heads to its close the index is down over 90 points, with a triple-digit down day very much in prospect.

NYSE traders
Source: Bloomberg

Next revises profit forecasts

If things carry on as they are it doesn’t look as if the FTSE 100 will have a particularly happy New Year period. But then 2014 as a whole has been disappointing for the index, as it fell behind its peers. Other indices may have seen fresh all-time highs during the year but the FTSE 100 is still yet to revisit the highs last seen back in 1999. As oil and mining stocks remain weak, it seems that this baleful situation is not likely to change.

The one bright spot on the index today has been Next, which continues to stand apart from the rest of the high street, with strong trading leading to an upward revision of profit forecasts. Its rivals in the sector will have had a much more difficult Christmas, with margins likely to have been heavily affected by discounting, something which Next regards as far too passé.

US markets drop back

As a result of its finish last night the S&P 500 has had more record highs than calendar weeks this year, but that hasn’t stopped US indices from dropping back in line with their European counterparts.

Consumer confidence figures rose but not by as much as had been expected, and barring a sudden surge tomorrow the Dow Jones may not finish the year with an 18 handle after all. Even so, a gain of around 8.5% for the year by this index is nothing to sniff at, and is particularly impressive when the disruptive elements of the year, such as oil, Ukraine and the debate over Federal Reserve policy are factored in.

The S&P 500 and NASDAQ have done even better, and US outperformance, both economically and in  stock market terms looks set to continue in 2015.

Saudis to maintain oil targets

Oil prices are ending the day very much where they started it, as the Saudis continue to weather the strain of lower prices much better than rival producers like Iran and Venezuela. While the drop hurts all oil producers, it hurts some more than others, and Saudi Arabia appears content to stick with production targets in the knowledge that it can sustain its position far longer than its Middle East rivals.

Power politics exploded back onto the global stage in 2014, but as the year ends it is the Arabic nation, not the Russian bear, that is proving to be the master of the art. 

US dollar basket close to 90 level

US dollar weakness is the driving theme of the afternoon, as the dollar basket pushes towards the 90 level that has marked strong resistance over the past decade. The US currency has enjoyed one of its best six-month periods, rising at a rate not seen since the early part of 2010. However, as the year winds down with no sign of a Fed interest rate hike in sight some investors may be looking to call time on the dollar rally.

The euro ends the year as one of the poor performers, having fallen by almost 13%, and with Greece apparently spinning out of control the outlook for 2015 looks bleak indeed.

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