Stock Markets Saw It First

3rd September 09 – Stock markets saw it first

This diary has been remiss in not reporting sooner how the author’s favourite baby has been growing. Stock markets (a brief history of the UK one can be found on the main website) look forward. They are disinterested in history and have only a casual relationship with the present. Corny perhaps, but true.

Yesterday we dealt with the emergence from a hole. Actually it was follow-my-leader. The FTSE 100 is up 40% since the nadir of March 09 and enjoying its strongest summer run in 25 years. For we close-watchers, the surge has started each trading day with the Far East. This is due partly to timing, i.e. where the sun rises first, and partly to the lower impact the credit crisis has had on Japan and China. As this piece is being written, the Nikkei is closing up 3.4% and the Hang Seng is up by half that percentage. In fact anyone betting on the Chinese stock market this calendar year can now go out and buy up all those vacant apartments/flats on those desirable water-side complexes.

Markets are global and what starts in the Far East is repeated at a slightly lower key in Germany, France, the UK and then the US as the sun moves Westward. Talking of betting on China, Simon Denham, MD of spread-betting firm Capital Spreads said “With yet another month almost over (sic) without some horrendous thing going wrong, I suppose it is natural that more and more of the fence-sitters are tempted, finally, to dip a toe into the water.”

It is worth saying too that the recovery in equities is pretty much across the board. I have a portfolio centred largely on “yields” since liquidating some two years ago. The stocks therefore are mainly on the conservative side. Even so, in the last three weeks the value has risen by 21%. All I need now is a further 26% and I have my money back!