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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

Early Morning Call: UK GDP unexpectedly rises in November

In the UK, GDP unexpectedly rose by 0.1% in November compared to October. Economists had expected a 0.2% contraction.

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Equity market overview

Equity markets continued on the same trend yesterday, with the US and Europe posting small gains.

In Asia, only Japan recorded losses, due to the recent strength of the Japanese yen. China's exports shrank sharply in December as global demand cooled. Imports also fell as the economic downturn weighed on domestic demand. Exports contracted 9.9% year-on-year (YoY) in December, extending a 8.7% loss the previous month. This was the worst drop since February 2020.

Imports fell 7.5% last month compared with a 10.6% decline in November, and a better than forecast 9.8% decline. Despite the downturn of the last few months, total exports rose 7% in 2022, while imports rose only 1.1% last year, down sharply from 30% growth in 2021.

In the UK, GDP unexpectedly rose by 0.1% in November compared to October. Economists had expected a 0.2% contraction. Industrial production fell more than expected by 5.1% in November.

In the US, import and export price data will be released at 1.30pm, and later at 3pm, Michigan consumer sentiment is forecast to rise to 60.5% in January, which would be a nine-month high.

US earnings

US earnings season officially starts today, with reports from four of the largest American banks.

According to data compiled by FactSet, the S&P 500 companies are poised to post the first earnings decline since the third quarter (Q3) of 2020. Revenue growth is expected to slow to 3.8%.

The financial sector is expected to deliver negative earnings growth this quarter. JPMorgan Chase is expected to post earnings of $3.11 per share, down 7% compared to the same quarter a year ago. Revenue is forecast to rise by 17% to $34.17 billion. America’s largest bank has to face several headwinds. While interest rates are rising, a slowing economy and a weaker housing market are restricting loan growth.

Besides JPMorgan, Citigroup, Bank of America and Wells Fargo are also scheduled to report quarterly earnings before the market open.

Outside of the banking sector, UnitedHealth is expected to post another solid quarter of earnings. Economists anticipate a 15.4% increase in earnings to $5.18 per share, on revenue of $82.47bn.

And Delta Air Lines is forecast to post earnings of $132 per share, five times more than the 22 cents posted for the last quarter of 2021, as travel demand is rising.

All the US stocks mentioned above are all-session stocks on the IG platform, and trading starts at 9am UK.

Commodities

Oil prices were little changed this morning after two days of solid gains.

Last week, Baker Hughes total rig count fell by seven to 772 last week. The number of oil rigs in operation fell by three to 618.

Gold is well on track to post a fourth straight week of gains. Gold trades above $1.890 for the first time since early May 2022, as the US dollar weakened further yesterday after the release of US CPI data.

Base metals also benefited from the weakness of the dollar. Copper is on track to record a second consecutive week of gains, which has taken it to a seven-month high.

Aluminium also is about to post its best weekly performance since February last year.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

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