Fri, 08 Aug 2008
7th Podcast – Stephen
So I’m feeling courageous and calling a short-term floor in the FTSE 100. There seems to be one at around 5100 and possibly one at 5300. What leads me to make this bold claim is that the news over the past week has been uniformly bad. Manufacturing is struggling and so is the service sector; the banks have reported huge falls in profits, other company results have been weak; house prices have fallen, economic indicators have disappointed… the list goes on. And yet markets have been relatively robust. This has something to do with the price of oil which has rallied markets in recent weeks but it is also because of the nature of markets: they are discounting mechanisms. This means that all of this bad news is priced in already. So, provided there are no shocks, unanticipated disasters (and I accept David’s ‘black swan’ pessimism) a short term target of 5700 is reasonable.
posted at: 16:49 | path: | permanent link to this entry