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.

29th Oct 2020. 10.33am

Regency View:

Lloyds (LLOY) – Market Alert

Lloyds jump 3% on Q3 numbers

Lloyds released a market-beating set of Q3 numbers this morning.

The banking group reported pre-tax profits of £1bn for the July-September period, compared to average analyst estimated of £588m.

Lloyds is the UK’s biggest mortgage lender and booked new mortgage lending of £3.5bn over the quarter, after receiving the biggest surge in quarterly applications since 2008.

Fundamentals

Lloyds trade on a Price to Book Value multiple of 0.4 – top quartile within the Banking Services sector.

They have one of the highest Tier 1 Capital Ratios (14.2%) in the sector and a have weighting towards low-risk mortgage lending.

However, whilst this morning’s numbers saw the bank lower their bad loan provisions – Lloyds do have a history of rose-tinted projections and the market is wary of this.

Technicals

Lloyds, and the rest of the banking sector has started to show signs of recovering during the last month – forming a small series of higher swing lows.

However, when this is viewed within the context of Lloyds long-term downtrend, the recovery still should be viewed as a retracement.

In order for this to change, the market will need to break and hold above 30p as this would form the first significant higher high and hence market the potential for a change in trend.

LLOY Daily Candle Chart

LLOY Daily Candle Chart

TRADE NOW WITH IG

Disclaimer:

This research is prepared for general information only and should not be construed as any form of investment advice.