Daily Market Roundup: Commodities applying the brakes on a Santa rally, Outlook for Centrica and Hornby



Nick Batsford, CEO of Tip TV, was joined by Zak Mir, technical analyst for Zak’s Traders Café, and Alan Green, CEO of Brand Communications, on the Tip TV Finance Show to discuss the Chinese import and export data, the falling commodity prices, an outlook for Centrica and Hornby and a view on global producers.

Weak Chinese imports trigger risk-off

Batsford highlighted FX Street, who noted that exports in China dropped 6.8%, whilst imports fell 8.7%. Weak exports is not surprising with global demand being relatively low, but falling imports is a more serious issue for China as it highlights weak consumption. They continued that the global economy is to continue to face aggregate demand deficiency, and interest rates are likely to stay closer to zero, the new normal, so long as Chinese consumption does indeed remain weak.

Commodity melt down threatening the Santa rally

Mir outlined that we don’t know where commodities are going or how bad the situation is going to get, but with oil now falling as well there is certainly a chance for this melt down to impact the potential Santa rally. Green agreed with this, and commented that commodities may well put the brakes on a Santa rally.

Outlook for Centrica and Hornby

When concerning Centrica, Green believed that it shares have opened this morning lower, and with a trading update on Thursday unlikely to change the situation, he expected more downside for the stock.

In terms of Hornby, he expressed that we are seeing a convergence of the 50 and 200 day moving averages, and their upcoming trading statement may spark a recovery heading into next year. Green added that this is a pivotal time for Hornby.

Incredibly low prices impacting producers

Batsford highlighted Elliott, who commented that heavily weighted to both energy and precious metals, both Bloomberg’s Commodity Index and the older Commodity Research Bureau’s Index of basic materials and food are down at the sort of levels not seen in this century. Trading approximately 22% below 2009’s lows, and 65% below 2008’s record high, its impact is being felt by producers all over the world.

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