End of year stock market review

[vegster]

In the hysteria following the BREXIT vote there was much wailing and gnashing of teeth about how the FTSE was going to crash by year end. One esteemed poster said the FTSE 100 would be down 1000 points on its 23rd June closing price and the FTSE 250 would be down even more. Another said his pension would be destroyed within weeks and he would be living in poverty at retirement.
It's reassuring to see that this was all hysterical nonsense fed by Project Fear. The FTSE100 finished the year just off it's all time high (set earlier this week) at 7142.83, a mere 800 points above its June 23rd closing price of 6338.10. The FTSE250 closed at18,077.27, 700 points up on it's June 23rd close of 17,333.51.

Will they show their faces on NSC?

Marvellous that the FTSE is up, however the stock market is only up because there is no other place to invest thanks to abysmal interest rates. YES ! It's ME ! my company pension is on track ( if it performs at 6% ABOVE inflation for the next , well all the years til I retire) to pay me the tidy sum of £339 per annum ! that's if things go well ....yes, really well...... not sure if I should take it as a lump sum or buy a four pack of baked beans each week in 2029 ? any experts around to advise ?

 

[Beach Hut]

Have no fear in a couple of years time when China implodes with billions of unsecured debt the world will all go into a massive recession.

 

[vegster]

Plus, it's weighted by market cap - hence share price movements by the largest companies have a disproportionate impact. The index is categorically NOT an indicator of the health of the UK economy, which is TOTALLY screwed. It wasn't in a great place before the Referendum, and is now in a much worse position (even though we are still in the EU). The only reason things have held up a little since June 23rd is because the British consumer is still borrowing and spending like crazy....it is complete madness. Some time next year the average Joe (or Jo) will wake up and realise the future is rather bleak. I predict this will happen shortly after Queen May has triggered Article 50, and the cold realisation of what we have committed to will gradually sink in. I hope I'm wrong, by the way....

This.

 

[warmleyseagull]

Have no fear in a couple of years time when China implodes with billions of unsecured debt the world will all go into a massive recession.

Yes, this is the elephant in the room. It will happen and the impact is very difficult to predict. China is still a relatively closed economy so the direct impact may be less than the indirect one of causing a crisis of confidence in other advanced economies that are still fragile. My advice is to hold some gold, preferably at least partly in actual metal as opposed to ETFs. I have seen a couple of predictions that gold could go to $7,000 an ounce (currently $1150ish)

 

[Buzzer]

Got to love all these amateur economists telling us exactly why record exports and a booming stock exchange is not necessarily a good thing. Maybe they could all get jobs with the IMF, BoE and the Treasury because NONE of the experts there correctly predicted what would happen in the few months after a Brexit vote with anything resembling the reality of the situation.

 

[BrianWade4]

We need to take a longer term view and we should all hold fire until we have actually exited and then given time for things to bed in

Let's revert in 5 years before deciding....

 

[BigGully]

CBA

Around 5680 and 15700 on December 31st then.

This was the figures quoted by [MENTION=23440]Seagull58[/MENTION], when he challenged your pessimistic prediction and you confirmed that to you these were the ballpark figures you expected.

 

[BigGully]

This.

Hows your pension pot, serious question as you were sure it was going to be trashed and the sun was never going to rise again ??

You guys scurrying around trying to somehow qualify your awful previous forecasts with flawed interpretations of current data do reasoned Remainers a disservice you really do.

 

[portslade seagull]

FTSE 250 finishes the year up some 600+ points, and over 3000 points above the kneejerk reaction to Brexit vote. generaly its about 1000 points over the year average. carry on.



firstly, the OP never claimed or implied it was an indicator of the economy health. secondly, price movements are proportionate to the largest market caps, because thats the point of the index, its weighted so that it represents the value of the shares, not the nominal share prices (i.e. a share priced 150 vs 500 is irrelevant if they move 10 points each, its the relative value that move represents that matters). it would be disproportionate if smaller constituent companies moved the index by the same amount as largest companies.

fact remains, and the point being made, is that thge Brexit vote has not brought about the collapse of the stockmarket as predicted. its no good citing that its due to currency devaluation, as that was also (excessively) predicted, so should have been part of the evaluation of post vote reaction. this only goes to show how project fear made simplistic claims of everything going to shite, which have been proven wrong so far. why cant the remain camp admit they misunderstood the reaction and its not been as expected, and the economy is more robust than they expected? why can they still not make a positive case for remaining, instead of relying on negative economic claims?

They still have to pick holes and find fault even though there basic argument regarding the FTSE has proved baseless. They now go delving for counter claims to justify there already failed prediction

 

[larus]

In the hysteria following the BREXIT vote there was much wailing and gnashing of teeth about how the FTSE was going to crash by year end. One esteemed poster said the FTSE 100 would be down 1000 points on its 23rd June closing price and the FTSE 250 would be down even more. Another said his pension would be destroyed within weeks and he would be living in poverty at retirement.
It's reassuring to see that this was all hysterical nonsense fed by Project Fear. The FTSE100 finished the year just off it's all time high (set earlier this week) at 7142.83, a mere 800 points above its June 23rd closing price of 6338.10. The FTSE250 closed at18,077.27, 700 points up on it's June 23rd close of 17,333.51.

Will they show their faces on NSC?

Oh come on. Stop with the facts. We need emotion and forecasters and bankers telling us that it's all going to crash around our ears. Anyway, you wait until we trigger Article 50 and then Brexit happens. It's WW3, you've been warned.

 

[larus]

I'm fairly certain I said that the FTSE 250 was dependent on the pound, which has had a nice rally thanks to Donald.

That's wrong. It's the Dollar that has rallied as interest rates have been raised by the Fed and forward guidance points to a steepening of the rate of increases.

 

[portslade seagull]

Have no fear in a couple of years time when China implodes with billions of unsecured debt the world will all go into a massive recession.

Judging by the mad amounts they are pumping into football I can only agree

 

[Your Mum]

Judging by the mad amounts they are pumping into your mum I can only agree

 

[LamieRobertson]

Predictions for end of 2017? (Best of luck)

 

[larus]

Two points
1 the FTSE isn't usefully measured in local currency terms - its dollar performance isn't so great
2 a bunch of multinational companies with much of their business abroad isn't a useful proxy for the health of the British economy companies

But carry on

3 Don't forget the lowering of interest rates and another round of QE that the Bank of England felt that they had to do to prop things up, actions which are guaranteed to raise asset prices as they have done in the past.

Bloody hell. Talk about wanting it all ways.

First, it's because of a weaker pound because of Brexit (and also because Mark **** Carney lowered rates when they weren't needed to be lowered) and multi-national companies (who earn most of their money overseas).

Then, it's because asset prices (i.e. UK asset prices) go up because of QE, but these companies earn most of their money abroad.

Bloody Remainers - still talking the same crap as during the referendum. (£30bln budget, house price crash, interest rate rises, FTSE crash, WW3).

 

[Half Time Pies]

Bloody hell. Talk about wanting it all ways.

First, it's because of a weaker pound because of Brexit (and also because Mark **** Carney lowered rates when they weren't needed to be lowered) and multi-national companies (who earn most of their money overseas).

Then, it's because asset prices (i.e. UK asset prices) go up because of QE, but these companies earn most of their money abroad.

You obviously don't understand QE. The money created through QE is used to buy government bonds from the financial markets (pension funds and insurance companies). The newly created money therefore goes directly into the financial markets, boosting stock prices and contributing to a higher FTSE.

 

[larus]

Marvellous that the FTSE is up, however the stock market is only up because there is no other place to invest thanks to abysmal interest rates. YES ! It's ME ! my company pension is on track ( if it performs at 6% ABOVE inflation for the next , well all the years til I retire) to pay me the tidy sum of £339 per annum ! that's if things go well ....yes, really well...... not sure if I should take it as a lump sum or buy a four pack of baked beans each week in 2029 ? any experts around to advise ?

Being totally honest, if you're not putting much into a pension scheme, you can't expect to get much out. If you don't earn enough, then I am sorry to hear that (genuinely meant BTW), but maybe you should think about what can you do to improve your prospects. Worry about what you can influence and not what you can't.

 

[larus]

You obviously don't understand QE. The money created through QE is used to buy government bonds from the financial markets (pension funds and insurance companies). The newly created money therefore goes directly into the financial markets, boosting stock prices and contributing to a higher FTSE.

I do understand QE. It's de-facto devaluation - printing money. It's a dumb policy and the west/developed world is screwed as we're nearing the end of the current expansionary part of the economic cycle yet we have negative interest rates/Q and the markets throw hissy fits when there is talk of scaling back QE or raising rates by 0.25%. Christ, what's going to happen when the next recession hits.

There are 2 different problems as I see it:
1. The elite/multinationals are able to abuse the international tax regimes in different countries to avoid paying a fair share.
2. The leftist agenda has promised too much to the average Joe which is un-affordable. Final salary pension schemes for the public sector workers. Say working for 25-30 years, retire at 50 ish on 2/3 final salary. But this is paid by future generations and a shrinking work-force (in relation to the population size as the demographics change).

So, with respect, I have a very good understanding of QE/finance etc. as I read a lot about it.

Yet, you want to take the word of these politicians, bankers, business leaders as to what we should do regarding the EU. The failing EU/Euro by the way. Watch what happens when the Euro starts to fragment, then the fun will start.

 

[Cheshire Cat]

You obviously don't understand QE. The money created through QE is used to buy government bonds from the financial markets (pension funds and insurance companies). The newly created money therefore goes directly into the financial markets, boosting stock prices and contributing to a higher FTSE.

And destroys retail saving rates because the banks and building societies are getting cash effectively for free into their balance sheets, and so no longer need to compete for smaller depositers

 

[LamieRobertson]

I do understand QE. It's de-facto devaluation - printing money. It's a dumb policy and the west/developed world is screwed as we're nearing the end of the current expansionary part of the economic cycle yet we have negative interest rates/Q and the markets throw hissy fits when there is talk of scaling back QE or raising rates by 0.25%. Christ, what's going to happen when the next recession hits.

There are 2 different problems as I see it:
1. The elite/multinationals are able to abuse the international tax regimes in different countries to avoid paying a fair share.
2. The leftist agenda has promised too much to the average Joe which is un-affordable. Final salary pension schemes for the public sector workers. Say working for 25-30 years, retire at 50 ish on 2/3 final salary. But this is paid by future generations and a shrinking work-force (in relation to the population size as the demographics change).

So, with respect, I have a very good understanding of QE/finance etc. as I read a lot about it.

Yet, you want to take the word of these politicians, bankers, business leaders as to what we should do regarding the EU. The failing EU/Euro by the way. Watch what happens when the Euro starts to fragment, then the fun will start.

Anarchy?