December 6 2013 Latest news:
Friday, August 16, 2013
Despite many of the signs emerging during the past few weeks pointing to an improving economic situation, our stock market has failed to make any headway. Perhaps it is just that the holiday season is now in full swing, but it does rather seem as though shares, having anticipated better times ahead, are now pausing for breath.
Even encouraging comments from the new Governor of the Bank of England failed to make much of a stir. His first pass at “forward guidance”, which is what George Osborne was after, suggests interest rates will remain lower for longer than many expected. If a meaningful drop in unemployment is to be the trigger for rising rates, then the economy needs to deliver more convincing news that growth is back.
There will be some events to watch out for in the week ahead. Inflation numbers will be published later today. All the indicators are that there is relatively little upward pressure on the cost of living at present, though food and fuel bills remain an important component and are largely outside governmental influence. We will also be made privy to what went on at the last meeting of the Monetary Policy Committee when the minutes are published tomorrow, as well as seeing how the high street is faring when retail sales are released the following day. Neither is expected to produce any surprises and, as the results season is now slowing, it is probably safe to concentrate on enjoying what remains of the summer. The next time I will be sharing my thoughts on the market with you will be in September. Autumn can be tricky for investors and, with German elections due next month, this year could prove interesting.
At least companies have tended to deliver ahead of expectations, while quieter markets have left valuation levels looking reasonable value. Bring on the autumn!
Brian Tora is an associate with investment managers, JM Finn & Co.