City Watch: Brian Tora on why 2013 has begun amid a mood of optimism on the markets
WITH the first proper business week of the New Year now kicking off, it is something of a tussle to decide whether to look forward or back.
The year just ended had a curate’s egg feel to it, but in the end delivered a positive outcome to investors. With the Queen’s Diamond Jubilee, the London Olympics, leadership elections in America and China, the US fiscal cliff and ongoing crises in the Eurozone, nobody can accuse 2012 of being without incident.
2013, on the other hand, could prove a little calmer. True, the last minute deal on tax and spending in Washington merely delays the resolution to America’s debt problem, while European issues are likely to remain with us throughout the year, but some uncertainty has been removed. It will be what actually happens that will determine the course of markets.
As this week unfolds we will see how Christmas trading was for the retail sector and, before the month is ended, the first set of corporate results for 2012 will be upon us. There will be plenty to exercise the minds of investors.
At least 2013 got off to an optimistic start. American markets moved into new high ground, while we managed to regain 6000 on the FTSE 100 index. The background to this was, of course, hope that a downturn in the US economy can be avoided. In the end, what happens in America will affect markets worldwide.
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Bank shares have got off to a good start, buoyed the level of liquidity they are required to hold turning out to be less onerous than feared, while the signs are that the internet continues to undermine the high street.
No doubt 2013 will prove as interesting a year as any for investors.
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: : Brian Tora is an associate with investment managers JM Finn & Co.