The splendid little Granny from Brooklyn sends out a far from clear signal on interest rates and stimulus packages, which probably would not have transpired had oil prices not fallen out of bed sending many equity and currency markets in to free-fall and the market takes it as read that rates will no rise in the foreseeable future – not before April 2015 and only very slowly.  


Well, bless investors and the teenage scribblers! They were beside themselves with glee at her comments and there has been no holding them back in the last 48 hours – The DOW has added 500 points in 2 days and the FTSE 270 points – FTSE up 116 at 6452. The rally here in the UK has been very general. Miners added a rather muted average 1.5% across the spectrum. Oils have done reasonably well but it is the medium sized operators that have been the real beneficiaries.


Insurance companies having been slaughtered in recent sessions. However today they have risen like the Phoenix from the ashes – Old Mutual +5.5%, Pru +2.5%, Aviva+3%. Lloyds Banking Group’s acolytes have treated the news that Morgan Stanley will ease its stock in to the market up to £3 billion in value above 73.5p with interest rather than enthusiasm for a parsimonious fee of £1– were flat on the day. Barclays has had a lovely run on the rails – up 3%, and RBS has done even better adding 4% today. BT, on news of an imminent announcement of a required rights issue of £2 billion plus, only eased back 0.5%.


This market is unfathomable. However if you think about it, until Uncle Vlad flexes his muscles when the sun is high over the yardarm next spring and it also becomes clear that the EU is deep in the economic manure, where is the alternative asset class, when company profits are reasonable if selection is sound and dividends are good?


David Buik

Market Commentator


+44 (0)20 7886 2775

Panmure Gordon & Co  One New Change | London | EC4M 9AF | United Kingdom


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