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UK stock market commentary (December 8, 2011): Can the EU summit change everything?

The European trading session gets underway and today all eyes will be on the summit.  It’s being billed as make or break for the survival of the EU in its current form as politicians attempt to impose deeper fiscal union amongst the member states and try to put an end to the escalating debt crisis.  The problem is it’s yet another question of haven’t we heard this all before?  The Cannes G20 summit only a few weeks ago was supposed to be the make or break deal for the EU but that ended in a damp squib and was followed by pleas to emerging economies to assist in beefing up the EFSF’s firepower, to which they simply said no.

UK stock market morning note (December 6, 2011)

The FTSE 100 is called to open lower this morning following the weakness overnight in Asia after S&P warned that 15 of the euro zone's 17 countries including France and Germany faced credit downgrades if political leaders did not resolve the region's debt situation. This news overshadowed the Franco-German initiative announced earlier in the day on tighter fiscal controls which will be discussed at the European summit on Friday.

UK stock market commentary (December 5, 2011): Yet another big week for the eurozone

Well we’re clinging onto gains! At this stage it’s purely a continuation of last week’s bullishness as investors look ahead to this week’s crunch EU summit believing that politicians won’t fall short this time because the ramifications of inaction are far too great. December is also historically the most bullish month of the year and so those fund managers who’ve struggled to perform will not want to miss out on any potential rally into the year end.

UK stock market morning note (December 5, 2011)

The FTSE 100 is called to open flat this morning with caution to the fore as the euro zone continues to be the main focus as investors await the Franco-German summit meeting today. News late yesterday that the Italian Prime Minister had unveiled a series of fiscal reforms to control the country's debts and more austerity measures in Ireland may help sentiment.

UK stock market morning note (December 2, 2011)

The FTSE 100 is called to open higher this morning on hopes that Europe's leaders will be able to find a solution to the ongoing euro zone debt situation. David Cameron is due to meet Nicolas Sarkozy today ahead of another France and German leaders meeting on Monday where the latter will discuss joint proposals which will then be put before the EU summit on 9 December.

UK stock market commentary (November 30, 2011): Day of discontent gets underway

It’s public sector strike day.  Thousands of people will take to the streets of London to complain about the fantastic deal they’ve been offered on pension reform by the coalition. The union leaders have been gearing up for a fight for months now and despite claims from the coalition that discussions are ongoing the unions have insisted on spending the day disrupting millions of people’s daily routine.  Of course you are going to get people upset about having to pay more, work longer, only to get less when they retire, but during the old days of unsustainable borrowing by the last administration in order to give public sector golden plated pensions, the strikers have to look back and realise that what they were promised then the country simply can’t afford today or tomorrow.

UK stock market commentary (November 25, 2011): Can George save the economy?

Lots of hype surrounding the Chancellor’s Autumn statement today but in reality he cannot do much without going back on his plans to reduce the deficit.  Unfortunately for him the lack of growth in the past year and downgrades expected for the years ahead are going to mean that we’ll not see the coalition’s targets of deficit reduction met until after the next general election.  The fact that the bond markets have continued to give the Chancellor the benefit of the doubt and even reduced his borrowing costs is an encouraging sign that financial markets believe he is taking the right course.

UK stock market morning note (November 29, 2011)

The FTSE 100 is called to open higher this morning after the gains on Wall Street and in Asia overnight  on hopes that Europe may finally agree a plan to resolve the euro zone debt crisis at the Eurogroup and Ecofin meetings today. However, caution is still likely to prevail with investors keeping a watchful eye on the outcome of the Italian bond auction later.

UK stock market commentary (November 25, 2011): Americans go on holiday as European markets continue sell off

It’s Black Friday!  That’s not a bad thing for the markets but it refers to the biggest shopping day on the planet as 150 million Americans are expected to hit the malls.  This is the time of year when US retailers are due to go into profit as heavy discounting and a public holiday lures consumers in through their doors and for those who can’t get to the shops (presumably the poor people who have to work in the shops that open at unearthly hours of the day), go online on “Cyber Monday” splashing up to $20 billion.  The figures for this US Thanksgiving are expected to break records which comes as a surprise considering the dodgy looking outlook for the economy, but just goes to show that you can’t put the US consumer down and when you tempt them with heavy discounts they look under the back of the sofa to find the cash to get that new television or item of clothing.

UK stock market morning note (November 25, 2011)

The FTSE 100 is called to open lower this morning with attention still focused on the euro zone debt situation with no agreement between Germany and France after a meeting yesterday on a resolution. We end the week with no major economic data due for release in either the UK or US and a quieter finish on the corporate news front.

UK stock market commentary (November 23, 2011): Real concerns over the global economy now take hold

Just as the Dow was closing last night it looked like US losses had been contained and at the time we were actually calling the FTSE to rise on the open, however the Asian equity markets have plunged to new lows and this has fed through to the start of European trade this morning.  Today it’s poor economic data from China that’s causing the worries as a PMI number comes in below the 50 level indicating contraction and fuelling worries that China’s economy is set for a hard landing, and this comes just after yesterday’s revision downwards to US GDP growth.

UK stock market morning note (November 23, 2011)

The FTSE 100 is called to open lower this morning on a newspaper report that the French and Belgian bailout of Dexia could be in trouble which could therefore potentially undermine France's AAA credit rating, although the report has been denied.

UK stock market commentary (November 22, 2011): Markets need that silver bullet

There is finally a positive start to a session this morning after what has seemed like a bit of a rout in equity markets.  The bounce so far though isn’t very convincing as the technicals have become increasingly bearish as support level after support level is broken up.  The dizzy heights of 5600 seem a world away from where we are now as any upside looks increasingly challenging with any rallies being very short lived.  Sentiment is seriously bearish now. Yesterday I met an ex-banker who knew little about spread betting or CFDs who asked me how he could make money from the FTSE going to 4600. Clients on the other hand are more optimistic at the moment as they have been opposing the weakness buying the FTSE around these levels and were even longer of the index yesterday, so a further bounce will be warmly welcomed by them.

UK stock market commentary (November 18, 2011): Markets need that silver bullet

As we start another trading day for the FTSE we see headlines once again dominated by the eurozone.  Yesterday was dominated by news of other big European states coming under the spotlight with Italy almost being brushed to one side.  Spain was a concern as their 10 year yield edged towards 7% but the real worry was France who’s bond auction saw their yields jump substantially.  France’s banks continue to come under substantial selling pressure even though a shorting ban on their stocks is in place.  Without agreement on how to increase the size of the EFSF bailout fund worries that Greece is going to default are rising and now the country is at a stage whereby they are going to have to rely on bailout money after bailout.  There’s little chance that anyone will lend to Greece now, even if they are demanding over 20% because the fear is that they won’t just have to take a 50% write down now, but lose the whole of their investment.

UK stock market morning note (November 17, 2011)

The FTSE 100 is called to open lower this morning following the falls on Wall Street and the mixed performance from Asia overnight on investors concern about the euro zone debt situation with France and Germany believed to be split over the role of the ECB in trying to overcome the issue. Both France and Spain will be holding bond auctions today and the outcomes will be watched with interest for the respective sovereign debt yields.

UK stock market commentary (November 16, 2011): Tough time ahead despite dip in inflation

Yesterday’s dip in inflation will have been welcomed by all as the decline from the peak is seen by many as the start of the return to inflation levels that are more sustainable for everyone.  People in the UK especially have suffered far higher levels of inflation compared to what they are used to with the VAT hike at the beginning on the year, rising fuel and food prices contributing to the hardship and causing discretionary spending from being seriously reined in.

UK stock market morning note (November 16, 2011)

The FTSE 100 is called to open lower this morning following the falls in Asia overnight on continuing concerns about the euro zone situation amid signs in the bond market that even core members may not be able to escape the contagion effect as the cost of borrowing for the likes of France and Austria rose yesterday.

UK stock market commentary (November 15, 2011): Biggest test for EU yet to come

Calls for greater integration within the EU are getting louder as politicians continue to dream of an ever more powerful central European state.  There’s no question that more fiscal integration could have possibly averted the current crisis by preventing profligate states from going on their spending sprees whilst being able to borrow from the bond markets at the same rate as Germany, but the reputation of the eurozone project has been badly tarnished and whilst there might be appetite from politicians, there is growing scepticism from the voters.  Certainly in the UK, which has historically been one of the more sceptical nations proud to have the head of state on its own bank notes, the old cracks in the Conservative party have re-emerged and now the Labour party is making noises about reclaiming powers from Brussels.

UK stock market morning note (November 15, 2011)

The FTSE 100 is called to open lower this morning following the weakness overnight on Wall Street and in Asia after a rise in bond yields for the likes of Italy, Spain and France yesterday reinforced investor concern about the euro zone situation. Investors were also assimilating the news that the German Chancellor's ruling CDU party voted in favour of allowing countries to leave the euro zone if they wanted, as part of Angela Merkel's plan to create a core euro zone of countries.

UK stock market commentary (November 14, 2011): A new week brings a fresh start for Italy

Who’d have thought that an ex-banker would have been asked to run the third most heavily indebted country in the world after years of animosity towards them, who for most people are to blame for the current crisis.  Populist thinking fails to appreciate that it’s the politicians who are ultimately to blame for this bout of turmoil in the financial markets and it is only them who can possibly turn things around.  At least this time there’s a degree of hope that a banker turned politician will be able to implement the sort changes required to pull Italy back from the brink.

UK stock market morning note (November 14, 2011)

The FTSE 100 is called to open higher this morning tracking the gains in Asia overnight after both Greece and Italy appointed new Prime Ministers who will be expected to push through reforms to help address their respective debt situations. In Greece, Lucas Papademos has now been sworn in and Italy's President appointed Mario Monti yesterday to head a new government. However, sentiment is likely to remain cautious over both governments' capacity to tackle their debt. The pound is lower against both the euro and the dollar and commodity prices are mixed in trading.

UK stock market commentary: Indecisive FTSE continues to hold onto crucial support (November 11, 2011)

Up down, up down as the see-saw for the equity markets continues.  The Dow managed to put in a half decent gain last night and Asian indices complimented that overnight so European indices are just about in the black.  Once again however we had been calling the FTSE to open much higher with our quote getting to 5500 at one point in the early hours then slowly but surely we drifted back from there. At the time of writing the FTSE is just a little higher to 5455 so hardly a convincing move from the buyers.

UK stock market morning note (November 11, 2011)

The FTSE 100 is called to open higher this morning tracking the gains on Wall Street and in Asia overnight on hopes that the new Greek Prime Minister, Lucas Papademos and Mario Monti, Italy's lead prime ministerial candidate will be able to provide some brief respite from the political stresses affecting both countries and hence the euro zone.

UK stock market comment: Markets in panic mode (November 10, 2011)

Fear is gripping investors at the moment as the eurozone debt crisis seems to be getting out of control.  Politicians in the US are now trying to calm nerves by saying that their exposure to Italian debt is wholly containable and that their banks will be able to weather the storm in the event of any default.  This has washed with the markets which were in sell mode throughout last night’s session in New York and this morning it has followed through to European indices.  For the FTSE we’ve been calling it to open below the important support level of 5400 throughout the night and at the open we’re trading at 5360.  This breach of 5400 is worrying for the bulls who’ve been citing this as the previous resistance following August’s correction and that it had turned into a major support level, so now the focus is going to be on the 5330/00 and 5270 area and then of course it’s the major low around 4800.  The bears seem to be very much in control of proceedings and if the fear grows we could be testing the resolve of these support areas.

UK stock market morning note (November 10, 2011)

The FTSE 100 is called to open lower this morning as concerns over the euro zone dominate market sentiment with Italy's debt situation causing the country's bond yields to rise above 7% which was the level that triggered the bailout packages for the likes of Greece, Ireland and Portugal. What happens next to Italy may well depend on the individual or collective actions of the likes of the ECB or IMF with German and French leaders believed to have held talks on a more integrated core euro zone. In Greece the politicians have still been unable to agree who will lead an interim government with further discussions planned today.

Is this the beginning of the year end rally?

The optimism shown by Asian markets overnight has only followed through to this morning’s European session to a certain degree as we were calling the FTSE to open up as much as 50-60 points, but we only got a 30 or so point jump on the open.  It’s a gain nonetheless as the tentative buying we’ve seen seems to be putting the bulls in control for now.  The question is whether we are seeing the commencement of a year end bull run or not.  It usually happens in November and December if you look back over time and each year we ask ourselves, will it happen again this time? With all that’s going on in Europe and the doom and gloom about growth prospects not just in the UK, but around the globe, this time might be different and it’s hard to see equities rushing higher in the current circumstance, but you can’t underestimate the resolve of the bulls come year end.

Heritage Oil(LON:HOIL.L) report: Uganda Approval

The government of Uganda has provided conditional consent to dispose of the company’s Uganda assets.The transaction is expected to complete within five working days following finalisation of a government mechanism to deal with arbitration and any taxes that may be owed from the disposal fo the transaction.

UK stock market weekly fundamental and technical outlook (January 15, 2010)

China continues to drive the rally, with impressive trade data assisting the blue chips to touch 5600, before retreating due to fears of earlier than expected central bank tightening. China’s imports hit a record high in December and exports also rose strongly. This was reflected by the Vix volatility index, a closely watched gauge of risk aversion, dropped below 17 earlier in the week to its lowest level since May 2008. However, it jumped by 7% later in the week, as investors were concerned by the start of fourth quarter earnings season in the US. Alcoa, the aluminium company, unofficially kicked off earnings season this week, with a disappointing lower than expected profit figure. Chevron also added to the caution after announcing that it would miss forecasts due to weaker refining margins. Over the coming weeks analysts are hopeful that fourth quarter earnings will show profits rising from gains in revenue and not just aggressive cost cutting. Due to the strong performance of equities recently, expectations have been lifted. Many companies are now forecast to nearly triple earnings on a year-on-year basis, which could increase the risk of disappointment. Technical analysis shows the fresh peak traded this week and a break-out above previous resistance at 5400 and the important 61.8% Fibonacci retracement level of 5495 suggests that the trend remains higher. However, it is worth noting that the DOW or the S&P 500 in the US have reached their respective Fibonacci levels. The relative strength index (RSI), which is a momentum indicator, has failed to trade a fresh high and this divergence from the underlying index is a concern as any selling could trigger a rapid move lower.

UK equities report by F&C Investments (4th Quarter 2009)

UK equities are reflecting improved economic data and confidence in a cyclical recovery. The 40% rally since the March lows has left the market vulnerable to profit-taking in the short term, but at current levels it remains well supported by fundamentals. Earnings – up by 20% this year – have been progressively upgraded over the summer months, especially following a reassuring second quarter reporting season. The market looks attractively valued relative to other asset classes where yields remain low. We have also been encouraged by the market’s resilience to over ?50 billion of fund raisings this year as well as dividend cuts.

UK Corporate Bonds report. 3rd Quarter 2009.

Sentiment in UK corporate bond markets has continued to improve over the past few months with spreads tightening across the board. Riskier assets enjoyed a strong recovery as fears of systemic failure in the financial system have been replaced by the hope that an economic recovery is imminent and the global recession is close to an end. With interest rates unlikely to fall further, the market will be looking for signs that the BoE’s quantitative easing measures are taking effect. Furthermore, issuance in the UK market continued apace with the 2009 total already exceeding ?70bn. These issues have been, on the whole, very well received and met with significant demand. However, until recently, the issuing companies have primarily been well regarded defensive names so the depth of this demand remains largely untested.

UK Gilts report. 3rd Quarter 2009.

With interest rates at 0.5% since March and scope for further easing unlikely, the incentive for short dated gilts to rally further is limited. The Bank of England’s (BoE) quantitative easing has buoyed prices recently but with the latest tranche of the buyback expected to end in July (and a limited ?25bn of potential gilt purchases left in the BoE’s armoury), quarterly issuance is expected to average circa ?55bn over the remaining fiscal year. This deluge of new issuance is expected to weigh on longer dated conventional gilt yields. Index-linked bonds have fared better, with yields remaining fairly steady against the backdrop of a supportive issuance calendar and inflation concerns.

UK Equities report. 3rd Quarter 2009.

After posting a sentiment-driven recovery in the second quarter, UK equities are likely to consolidate given the fragility of economic fundamentals. Britain’s growth prospects remain clouded by a number of variables, notably inflation, which is threatening to re-accelerate, and unemployment, which is draining consumer confidence as it climbs towards 2.5 million. The chances of the market building significantly on its rally are also undermined by the knowledge that the summer months, with their low trading volumes, are traditionally quiet.