The big week of the month this week with both sets of ISM data in the US (Manufacturing on Monday and Non Manufacturing on Wednesday). Both will paint a bleak picture and consensus for Manufacturing on Monday is 38.4, but I think the figure could easily be worse than this whilst Non Manufacturing consensus is 43. On Friday in the US we get the all important Non Farm Payrolls which will almost certainly show a 300,000+ drop in employment, a big number by any yardstick. We also have key interest rate decisions from the MPC and ECB on Thursday. The best guest for the UK is either a 0.75% or 1% cut. Given that we have only just had the fiscal stimulus package from the government it may well temper the mood of the MPC and they may be a little more restrained in their thinking, but even so I think 0.75% is a minimum to expect. The ECB should also be in serious rate cutting mood with a minimum of 0.5% expected and I think 0.75% most likely. On Wednesday keep a look out for the European retail sales figure which is likely to show a 0.5% drop month on month.

For my CFD portfolio I will be watching the trading update from Tesco on Tuesday. We can expect a slowdown in UK like for like sales growth to what is likely to be the lowest level of growth for many years. Nevertheless international growth should still be healthy although we already know that areas such as Korea are experiencing a slowdown in the rate of like for like growth.

The European CPI data today has shown a massive drop from 3.2% to 2.1%. This pretty much brings the level into line with the ECB's target and the fact that we can expect the rate to fall a good deal further does at least add weight to the push for a combined 200bn euro fiscal stimulus package that has been recommended and for a further 0.5% cut in the interest rate which is widely expected next week.

A quiet day for the market with Wall Street having closed up yesterday with the S&P up 3.5% which gave the FTSE a good start which it maintained with no lead from Wall Street today because of the Thanks Giving holiday.

Not much economic data to focus on today apart from the Nationwide house price figure for November which showed a 0.4% decline, and this was less than anticipated. I am not sure how much you can take from this, but I guess that activity would normally slow at this time of year anyway and I suspect there are still a good deal of sellers that are yet to accept that sale prices will need to be adjusted to have any chance of achieving a sale. That is certainly the case around where I live where many houses have been on the market for 18 months and prices in many instances are the same as they were when these houses were first place on sale. I think the housing market still has some way to fall, and another 15-20% seems reasonable.

As part of my CFD trading I am always on the lookout for potential new stocks to incorporate and monitor in case a trading opportunity arises. I also find this a useful exercise in finding potential investments for my longer term physical portfolio and new medium term CFD strategies that I am looking to use. At present I am focusing on stocks that provide high yield that is sustainable whilst providing a reasonably reliable earnings stream to prevent any significant de-rating of the stock. However, when you drill down there are few stocks that offer a very safe dividend at the moment for a variety of reasons and sometimes it is better to focus on the worst case scenario of a dividend cut in calculating an appropriate valuation for a stock. On that basis there are quite a few stocks that offer good future yield even discounting cuts in their payouts. I have always been a fan of the life stocks for trading although more recently the sector has declined substantially with concerns over capital adequacy and the potential for dividend cuts and rights issues. All of the life companies have updated the market during recent weeks and most still have a sufficient cushion before they would have to consider a reduction to their payouts or worse still a rights issue. This is still a sector only for the brave, but I do believe that it has some of the strongest potential for recovery when equity markets start to pick up. Aviva reached an intraday low a few weeks ago of £2 and in a relatively short space of time doubled to £4. At the time fear was driving the market, and few people would have taken advantage of that price and doubled their money. Nevertheless this is a sector where there are bargains to be had if you believe in an eventual recovery. Aviva along with the Prudential are the more riskier plays at present given their lower surplus position and equity exposure whilst the likes of Legal and General has a comfortable surplus and although primarily focused on the UK market does offer what looks to be a safe yield (prospective yield is just under 10%) and will certainly recover well with any sign of improvement in the equity market. Even a 40% cut in the payout would leave the shares with an above average yield.

BT is a another good example, there has been a lot of talk of a cut in the payout, but we will not know for sure until mid next year. What we do know is that the board consider BT to be a yield stock and the Chief Executive has stated that he is keen to keep the dividend or at the very least maintain a relatively high payout. At their intraday low a few weeks ago the shares hit around £1 with an historical yield of just under 16%. At the time if you considered a worst case scenario of a 50% cut next year you would still have got almost 8%.

There are many stocks in the catefory of dividends at risk, but if you consider where the dividend could be rebased to you will have a better idea as to what is an appropriate valuation for a stock. If in the end the payout is not cut because conditions improve you may well bag a bargain.

The data for Q3 UK GDP was unrevised at -0.5% which was broadly in line with expectations. A lot of this was due to the fall in total fixed investment over the quarter which declined by 2.4% and is primarily attributable to the housing sector. A trend which will continue for sometime given the severity of the slowdown in housing. Dismal news on household spending today which declined by 0.2% compared to the previous quarter. It is increasingly hard to believe that we will see positive growth during any quarter of next year.

In the US terrible durable goods orders and a downward revision to third quarter growth to -0.5% combined with a 1% drop in consumer spending during October failed to upset the market. It would seem that the incoming Obama Administration is the reason for hope and the market ignoring the endless supply of poor data. It could also be argued that this data is now priced in, but I suspect not and if the economic situation continues to deteriorate as quickly as it is doing there is every chance that new market lows are yet to be reached.

Nothing to report on my cfd portfolio and I can't help but feel that after a 10% plus move this week we will be in for some consolidation. The fiscal stimulus packages that are being announced worldwide are undoubtedly helping markets at the moment. My main fear is that with such a sharp slowdown the personal savings rate is going to increase significantly and the impact of these packages will not be enough to prevent what still looks like turning into a deep and long recession.

I am not going to comment much on the Pre-Budget report which has been flogged to death in the press. I think the main point which is clear is that the forecasts for growth next year from Mr Darling are far too optimistic and to assume only 2 quarters of negative growth next year is I think wishful thinking. More importantly I don't believe that the stimulus will be enough and we can expect a budget deficit increasing further from his forecasts and an annual £150-£200bn is not impossible as the recession will take far longer and tax receipts I believe will be impacted far more than the government wants to admit to at this stage.

This afternoon the US decided to throw another £800bn around to improve credit flows with this new bail out known as the TALF, Term Asset Loan Facility with £600bn for Fannie, Freddie and Ginnie and another £200bn for consumer and small business loans. The Fed stated that this is in response to the cedit market widening in recent days. The announcement had the usual impact of boosting the market but this time I think common sense quickly prevailed and clearly there has to be fear as to the implications of the scale of such large intervention worldwide. Also the downward revision to Q3 GDP growth from -0.3% to -0.5% didn't help.

I used today's volatility for some good trading in my cfd portfolio. The initial boost to the market this afternoon provided me with a good profitable exit on my holding of DailyMail and General Trust. My favourite kind of trading with cfds is swing trading and as the market rallied initially this afternoon it also provided a good boost to Unilever taking them comfortably over £15 which I used to short the stock. This was a text book trade as the shares had been underperforming all day and as always when you get a wild upward movement the shares went with it and I shorted at £15.15. Within minutes the market was starting to reverse and because of the weakness in Unilever all day the shares very quickly reversed and I was able to close the position at £14.65. All said a good day for my cfd portfolio. I still have the recent cfd position in Tesco which I am holding onto.

All eyes on the Pre-Budget report this afternoon although most of it appears to have already been leaked to the press. It would seem we can expect a 2.5% cut in vat which is certainly to be welcomed and will help business and the general economy. The compensation for low income earners who have lost out on the basic 10p rate looks set to continue and a delay in raising corporation tax for small firms looks to be on the cards. Outside of this there is a lot more that can be done if the government is going for a £30bn giveaway. If you look at what the fiscal stimulus package achieved in the US it is safe to assume that any impact tends to be very short lived although the US version was based mainly on rebate cheques whereas the measures we will see today should have a longer lasting impact. That is not to say that it will be successful as it really is unknown territory in the UK and as to how a budget deficit of £120bn plus is recouped in the future remains to be seen especially if the next decade is one of sub trend growth at best which I suspect it will be. It would not surprise me to see the budget deficit going to a crazy level of closer to £200bn over the coming years if this recession/depression remains far more deeply embedded than many expect.

On the economic front look out for the UK business investment figure which is likely to be terrible. We also get on Tuesday a preliminary Q3 GDP figure for the US which is expected to show a contraction of 0.5%. On Wednesday we get the UK Q3 GDP figure which is widely expected to show -0.5%. On Wednesday we get the US durable goods orders which is likely to be an ugly number plus we get the US University of Michigan Consumer Confidence figure for November. On Friday we get the EU CPI data for November and the unemployment figures.

Another bad day for the market with Wall Street pulling us down during the afternoon with ongoing worries over the future of Citigroup. Monday should start a little better with the 6% rally on Wall Street during the last hour of trading which seems to have occurred due to Obama's choice of new Treasury head, Timothy Geithner. He does have good credentials, but I think the late rally was more a function of the market seeking anything positive to hang on to and a 6% rally on the back of this does seem a little optimistic. We have had a bad week for economic figures and the jobless figures announced this week in the US were terrible and possibly point to a Non Farm Payroll figure above 300,00 when it is announced in early December. It will be a long time yet before any of the key statistics are starting to show signs of stability let alone improvement.

Whilst we are undoubtedly in the midst of an ongoing bear market what we should also remind ourselves of is that a recovery will come and as always the market will discount several months in advance a recovery even if earnings and economic data is continuing to deteriorate. I have no idea when this time will come, but there is no getting away from the fact that at current levels even when discounting earnings falls next year and dividend cuts the market at current levels does look reasonable good value. If we do see another 10-15% come off before sentiment starts to shift I think that will provide those with a longer term bias to pick up some very cheap stocks. There are companies out there that generate good free cash flow and have very solid business models and dividends which eventually will be rewarded when market conditions start to improve.

My most recent purchases of Tesco and Daily Mail are now sitting on modest losses, but I anticipate a better start to the week next week and I am hopeful that the market may be able to put together a couple of days of gains which will be helpful after the heavy fall in the FTSE this week.

Another disastrous day for the market and with the Dow closing down over 5% again we face another bad start to trading tomorrow. Yet again the fear factor is taking hold and I think we will see the FTSE100 reaching new lows as we approach Christmas. It is difficult to see any near term catalyst that will at least arrest the current decline. Valuations are being ignored with so much uncertainty over earnings next year. At some point this will change, but with the next imminent potential disaster of the car manufacturers in the US anything can happen over the coming weeks. Whilst I am against protection for the car manufacturers I think some form of support is necessary given how fragile sentiment is and a big failure is going to hit the US hard.

I made a small mistake today in not setting a price on my system to sell my Daily Mail which reported today and my holding showed a very healthy profit whilst I was out of the office, but have come back with the market sell off during the afternoon. If the market heads south for the next couple of trading days I will be at risk of being stopped out but I am sure they have plenty of recovery potential if we get a positive day although I fear that is wishful thinking for tomorrow.

The minutes of the MPC meeting demonstrated today that interest rates will be cut a lot further. The fact that they felt a 2% cut was appropriate goes to show the severity of the downturn and is a huge change in thinking over the course of one month. The reason they did not cut by more than 1.5% was purely to avoid shocking the market any more than what did happen and more importantly it paves the way for another heavy cut next month. I would not be surprised now to see a further 1% cut in December taking the base rate to 2% and I think we will now see 1% by mid next year. There is little on the horizon to prevent relaxing monetary policy to historically low levels.

The CBI industrial trends survey published today shows that the manufacturing sector is in a dire state. Output expectations continue to fall and manufacturers now do not anticipate being able to increase prices at all. With output and prices falling manufacturers earnings are going to be heading south and even a weaker pound is unlikely to help due to the deterioration in overseas markets.

The FTS100 deteriorated in the last hour of trading having been down around 100 points for most of the day to end 200 points down. The situation in the US is deteriorating on a daily basis and there are quite a few analysts that now believe the S&P 500 will not find a floor until it reaches around 600 which leaves us with some way to go yet. The US CPI today collapsed 1% which goes to show the speed at which inflation is disappearing out of the system.

No activity on my portfolios today. The recent Tesco acquisition was looking good until the last hour when the share sold off along with the rest of the market and the same also of the recent purchase of Daily Mail. I am watching Unilever closely at the moment with the view to entering another short. The shares were relatively strong all day and I think if we get a late rally tomorrow afternoon they may pop back over £15 which could be quite interesting.

The decline in US Producer Prices by 2.8% in October shows that deflation is likely to be the greater threat than inflation over the coming year. The rapid decline in gas prices and even food prices contributed to the fall, a trend which will continue for some time. In the UK the CPI posted a record fall to 4.5% from 5.2%. Even with prices falling rapidly I do not believe it will improve consumer confidence and spending will continue to decline. We are entering a new era where the saving rate will increase and any beneficial impact of falling prices via increased real disposable income is likely to be saved.

The market started in negative territory but did manage a reasonable gain towards the end of the day. My latest Tesco holding is now back at break even and I am hopeful that the shares will recover a little more over the next couple of days. With the market down this morning the shares were up which is encouraging and their defensive characteristics do seem to attract interest as the shares move closer to £3. I did open a very small CFD long position in Daily Mail today. I have always been a fan of the Daily Mail brand and with the shares yielding 6% I do feel that a lot of bad news is priced in. I am looking for a 5-10% move in the shares before banking a profit. If the market does rally tomorrow there may be a chance of this as they can be quite volatile.

A few more snippets today about the state of the US economy in the form of the Empire State Manufacturing Index and Industrial Production. The Empire State figure on the face of it didn't look too bad in the sense that it has not deteriorated much more than last month, but when you look at the underlying constituents the picture is grim with a significant decline in the employment index and capital expenditure intentions over the next 6 months. Industrial production increased by 1.3% in October, but this reflected a rebound in mining production after the enforced shutdown caused by the hurricanes. However, there was a revised 3.7% drop in September which was the largest since 1946. The Fed estimates that stripping out the impact of the hurricanes Industrial Production fell 0.7% during September and October. All of which paints a depressing picture and it will be some time yet before we see an upturn and more importantly it is clear that conditions in the US are going to deteriorate a good deal more over the coming 6 months, especially unemployment.

I took advantage of the weakness in the market today to close out the profitable shorts in Unilever and Next. I also took a long position in Tesco in the hope of a short term rebound in the market tomorrow. Unfortunately the shares lost around 7p in the last hour or so of trading so I may have to wait a little longer for a profit. The FTSE100 is moving closer to the 4000 level and it will be interesting to see if we get a bounce or if we are going to approach a new low over the next couple of weeks.

I am beginning to wonder if the Dow really needs to trade until the last hour as it seems at the moment that no matter what trends prevailed in the hours leading up to the last 60 minutes of trading the end result seems to be completely different. Yet again today the Dow completely unravelled having been just in positive territory with one hour to go and ended down 337 points.

Given the dismal retail sales figures in the US which were awful and the data we have had to contend with this week I am surprised to see such strong positive moves as we had yesterday, but realistically this just goes to show that we are still very much in a bear market. The initial jobless figures in the US this week point to a set of Non Farm Payrolls next month that are likely to be even worse than those we have just had, and I think the market is in for a rough time as we approach the year end. I am particularly concerned at present with the situation re the US car makers. If they do adopt a protectionist policy for these companies which are clearly not viable it really does open the flood gates for any company to come to the US government with a begging bowl. This would have far reaching implications. I am all for stabilising the financial system and trying to protect jobs in any industry, but you have to draw the line somewhere and any bail out will have far reaching implications as the recession claims further victims.

The initial rally in the FTSE100 this morning was eroded as the day wore on and the US opened, but we still managed reasonable gain. I took advantage of the strength in Tesco this morning to sell at a profit and I opened at the same time a short in Unilever as they again pushed over the £15 level which I think is at best fair value for a company that is going to have a very difficult 2009. My one remaining short in Next is in profit and I am hopeful that if we start the week in negative territory I will be able to close both out at a nice profit.

A 6% bounce in the S&P 500 in the last hour of trading sets us up for a good start to trading tomorrow. My latest Tesco holding closed nicely in profit and I am hoping that a bounce in the morning will give me the oppotunity to exit at a healthy profit. I have a remaining short in Next outstanding which is also in profit, but I am going to wait before closing that out as the retailers are going to fall further yet I feel.

Terrible unemployment data yesterday with lots of announced job losses again today suggests that the economic downturn is being felt hard in the jobs market quite early on and I think estimates of unemployment over the 3m mark before the end of the down turn seem quite realistic. Germany fell officially into recession today with the rest of Europe likely to follow suit very soon. I think fiscal stimulus packages will gain more headlines over the coming weeks as world governments find that monetary policy is not going to be as effective because of the credit crisis and cutting taxes will be an insurance policy against a deep recession turning into a depression. With a Pre Budget report due on the 24 November in the UK we can expect to see some serious tax cuts if the government wants to make a difference to what is now going to be a severe recession. What they will do is anyones guess, but a cut in vat seems an obvious way of injecting some life into the corporate sector. Any income tax cuts especially to low income families are more than likely to end up being saved and I don't believe will be as effective as cuts in corporate tax. I am sure there will be tax benefits to individuals in some way, but to what extent is open to debate.

BT anounced figures today which were a little better than revised forecasts after the profit warning concerning their Global Services division a week or so ago. The shares have suffered more I think due to the pension fund liability than the deterioration in the Global Services division. What was encouraging was the apparent commitment from Ian Livingstone to the dividend and whilst I would not rule out a cut, it does seem less likely unless there is a marked deterioration in cash flow. I think BT does have considerable scope for recovery if it does improve its cash flow position and if the stock market improves it will take some pressure off the pension liability. Without the Global Services division BT would be a supreme cash cow and if it doesn't turn this division around I believe it could be sold in the longer term. I am hanging on in with my holdings and I even added to my physical equity holding more recently. BT will have its day again, but for the time being I think the shares will tread water for a while.

After a good start to the day the market quickly lost its gains with bad unemployment data and the Bank of England inflation report which made it clear that 2009 offers little hope for a turnaround in economic conditions. It is amazing how quickly interest rate expectations are falling with most expecting a base rate of2% by the Spring and 1% or lower by the end of the year. Inflation by then is likely to be non existent.

The Dow has ended the day down 4% so we can expect a weak start again tomorrow. My latest Tesco holding did come back to what I paid at the close and I may have to wait for a better day than what tomorrow is likely to offer to take a profit on this one.

It is amazing the number of people that rushed out with forecasts of a year end rally as the markets started to push ahead last week, but already such forecasts are looking on shaky ground. There is simply too much bad economic data at the moment for markets to find the legs for a sustained rally.

Another bad day for world markets. Job losses in the UK will be on the agenda tomorrow with unemployment figures due. Retail sales figures today were bad and across the board we are seeing signs that a recession is hitting hard and quickly. There has been a lot of talk about the spread between the base rate and mortgages and it is clear that despite the hefty cut last week we are now going to see a good 200bp spread between the base rate and most mortgage rates providing little respite for the housing market which I think has a good 15-20% to fall before we start to see some signs of stability. It is interesting that most of the big banks are yet to unveil any new tracker mortgages having pulled them last week.

Today I was lucky with the market weakness to be able to close out my two shorts in Unilever and Next and towards the end of the day I went long of Tesco. The shares had fallen yesterday after slightly disappointing sales figures for their operation in South Korea. To me this is purely a reflection of the world economic slowdown and I am almost certain that Tesco will be one of the few international success stories over the longer term. The market seemed to be waking up to the fact that the shares were looking a little oversold in late trading and bounced quite nicely shortly after I had bought them. The futures are looking for a 60 point opening gain in the FTSE100 tomorrow and I am hoping to take advantage of this to sell the Tesco.