Where its at - FTSE 100

[crankedup]

Several months back I reckoned the index would be 4995 by year end, calender year to exclude end of financial year distortions. I'm now feeling that could be an optimistic hope but will stick with it.
Your thoughts on where it could be?

[Mr XXXX]

Out of interest crankedup, any reason why you would wish the FTSE 100 to drop to 4995?

[munky]

Mr XXXX said:

Out of interest crankedup, any reason why you would wish the FTSE 100 to drop to 4995?

He's just a pessimist that starts threads for no obvious reason

I think it will be binary:
Greece leaves Euro: 4000
Greece stays in Euro: 6000

figures are purposely rough guesses, but you get the idea. Equities are driven by sentiment (optimism or lack thereof) at the moment.

[10 Pence Short]

munky said:

He's just a pessimist that starts threads for no obvious reason

I think it will be binary:
Greece leaves Euro: 4000
Greece stays in Euro: 6000

figures are purposely rough guesses, but you get the idea. Equities are driven by sentiment (optimism or lack thereof) at the moment.

I would have thought that Greece staying in the Euro will be poor for sentiment, as it's a politically unstable country and it will take a log time for confidence in the country to behave is restored.

If Greece leaves the Euro, the level of haircut suffered by lenders finalised and the rest of them all pull together, I would expect it to be good for confidence.

In reality, I think even if Greece does leave, Spain, Italy and others will keep the whole thing fidgity, but perhaps less so than if Greece is still involved.

[crankedup]

Mr XXXX said:

Out of interest crankedup, any reason why you would wish the FTSE 100 to drop to 4995?

Seems like a good bet to me, 4995 or lower. No other reason.

[12gauge]

Look at the Nikkei over the last 25 years. Hasn't seemed to help that the Japanese govt has 'stimulated' their economy to the point of getting public debt to nearly 250% of GDP. Its still fallen 75 odd %.

OTOH, the banks that made up much of the FT100 are now mostly penny stocks, so maybe the index is now more weighted towards companies that actually create things rather than profit off usury.

[fido]

12gauge said:

OTOH, the banks that made up much of the FT100 are now mostly penny stocks, so maybe the index is now more weighted towards companies that actually create things rather than profit off usury.

Wow, i didn't realise Robert Peston was a contributor to PH.

[munky]

fido said:

12gauge said:

OTOH, the banks that made up much of the FT100 are now mostly penny stocks, so maybe the index is now more weighted towards companies that actually create things rather than profit off usury.

Wow, i didn't realise Robert Peston was a contributor to PH.

At least Peston gives the illusion of knowing what he's talking about, unlike Mr 12guage here

[P-Jay]

I'm thinking 5600 to 6000.

The FTSE is an indication of where the market thinks were heading too, not where we're at - it's already deflated because of the Euro problems and Greece, one way or the other that isn't going to a worry by the end of the year.

Greece is a big issue now, but I feel people are worried it might be the tip of the iceberg rather than any great fears about a sick country that represents about 2% of the GDP of Euro Countries leaving the Union.

They'll reg-neg the terms of the bailout, as it seems even Merkel will fold as they need Greece as much as Greece needs the Euro.


Hopefully the recession will be a two quarter only recession and we'll return to modest growth and most EU countries will have their growth plans in place by year-end.

[crankedup]

According to the news today, the markets have factored in a Greek drop out, if thats the case I'm stuffed with my light-hearted forecast. But I don't reckon the market has factored fully the fall out, a 500-600 point drop during the past 12 months, most in the past 3 months is not adding up to the ste storm on its way. Another 400-600 down is my bet.

[crankedup]

P-Jay said:

I'm thinking 5600 to 6000.

The FTSE is an indication of where the market thinks were heading too, not where we're at - it's already deflated because of the Euro problems and Greece, one way or the other that isn't going to a worry by the end of the year.

Greece is a big issue now, but I feel people are worried it might be the tip of the iceberg rather than any great fears about a sick country that represents about 2% of the GDP of Euro Countries leaving the Union.

They'll reg-neg the terms of the bailout, as it seems even Merkel will fold as they need Greece as much as Greece needs the Euro.


Hopefully the recession will be a two quarter only recession and we'll return to modest growth and most EU countries will have their growth plans in place by year-end.

Wish I could be as optimistic as that! 18 Summit meetings over the past 18 months and still no further towards reaching an agreed solution. Politicians for you!

[P-Jay]

crankedup said:

P-Jay said:

I'm thinking 5600 to 6000.

The FTSE is an indication of where the market thinks were heading too, not where we're at - it's already deflated because of the Euro problems and Greece, one way or the other that isn't going to a worry by the end of the year.

Greece is a big issue now, but I feel people are worried it might be the tip of the iceberg rather than any great fears about a sick country that represents about 2% of the GDP of Euro Countries leaving the Union.

They'll reg-neg the terms of the bailout, as it seems even Merkel will fold as they need Greece as much as Greece needs the Euro.


Hopefully the recession will be a two quarter only recession and we'll return to modest growth and most EU countries will have their growth plans in place by year-end.

Wish I could be as optimistic as that! 18 Summit meetings over the past 18 months and still no further towards reaching an agreed solution. Politicians for you!

Know what you're saying, but this most recent one has been the only one where leaders have talked about the need for growth plans, instead of austerity measures.

[crankedup]

Indeed P-Jay, even Cameron seems to be accepting the need for growth and siding with Hollande. Never thought I would see a Tory Minister, yet alone Prime Minister, siding up with a French Socialist! Hope yet maybe.

[Cheib]

12gauge said:

Look at the Nikkei over the last 25 years. Hasn't seemed to help that the Japanese govt has 'stimulated' their economy to the point of getting public debt to nearly 250% of GDP. Its still fallen 75 odd %.

I suggest you look at what the stock market valuations/multiples were before that crash...might not seem quite so relevant once you have.

[DJRC]

crankedup said:

Indeed P-Jay, even Cameron seems to be accepting the need for growth and siding with Hollande. Never thought I would see a Tory Minister, yet alone Prime Minister, siding up with a French Socialist! Hope yet maybe.

Hope for what?!

[crankedup]

DJRC said:

crankedup said:

Indeed P-Jay, even Cameron seems to be accepting the need for growth and siding with Hollande. Never thought I would see a Tory Minister, yet alone Prime Minister, siding up with a French Socialist! Hope yet maybe.

Hope for what?!

Whatever you may hope for in the future I guess, but you must admit its a strange situation to see and hear Cameron and Hollande almost in agreement. And yet on the domestic front the Tories and Labour couldn't appear to be further apart on how to resolve the crisis affecting U.K.

[DJRC]

crankedup said:

DJRC said:

crankedup said:

Indeed P-Jay, even Cameron seems to be accepting the need for growth and siding with Hollande. Never thought I would see a Tory Minister, yet alone Prime Minister, siding up with a French Socialist! Hope yet maybe.

Hope for what?!

Whatever you may hope for in the future I guess, but you must admit its a strange situation to see and hear Cameron and Hollande almost in agreement. And yet on the domestic front the Tories and Labour couldn't appear to be further apart on how to resolve the crisis affecting U.K.

But they arent almost in agreement about anything and CMD hasnt sided with Hollande about anything or even remotely looked like being close to Hollande's position. Hollande and CMD are about as diametrically opposed as you can get, which is a pretty good job because Hollande so far has only advertised bankruptcy for France. He hasnt actually said anything about achieving growth, only that he would like some and likes the idea of it. All the policy statements he has made are only about increasing the number of public sector jobs. Nothing about growth. This is also why Angie hasnt changed her line on anything because Hollande hasnt said anything about *how* to achieve said growth except to say that Germany should underwrite Eurobonds to fund low cost borrowing for the rest of Europe and underpin the big hole in French banking.

Stop filtering everything through your ideology and start thinking practically. There are *no* ideologies at play in Europe at the moment, only money and how to get more of it out of Germany. That is the only game in town.

[AJS-]

Apart from putting a spread bet on a random number, does this figure actually matter to anyone?

[cymtriks]

It looks a bargin to me!

Against inflation it's as low as it was in 1995.
Corrected for inflation the last two big rises ended at circa 9500 and 7000

Plenty of big and profitable companies on PE ratios of 10.

I wish I had more money for buy and hold!

[munky]

10 Pence Short said:

munky said:

He's just a pessimist that starts threads for no obvious reason

I think it will be binary:
Greece leaves Euro: 4000
Greece stays in Euro: 6000

figures are purposely rough guesses, but you get the idea. Equities are driven by sentiment (optimism or lack thereof) at the moment.

I would have thought that Greece staying in the Euro will be poor for sentiment, as it's a politically unstable country and it will take a log time for confidence in the country to behave is restored.

If Greece leaves the Euro, the level of haircut suffered by lenders finalised and the rest of them all pull together, I would expect it to be good for confidence.

In reality, I think even if Greece does leave, Spain, Italy and others will keep the whole thing fidgity, but perhaps less so than if Greece is still involved.

Doesn't work like that though, because an exit would not be a nice, tidy, organised affair. Bank runs on an epic scale to pull Euros out before conversion. Contracts are broken. Companies whose sales are in Drachma but costs in Euros go bust, not being able to pay suppliers- this will hit companies throughout Europe. Greece defaults on the bailout, leaving the rest of Europe with losses. Panic spreads to Italy, Spain, Portugal. Bank runs on an epic scale. Repeat. Credit crunch part 2. Banks fail in these countries, but these countries may not be able to afford a bailout. Carnage. Given that most UK exports are to Europe, this would affect us and the FTSE. In addition not all consequences are known, aside from lawyers having a field day sorting out the Greek law contracts (convert to Drachma) from the English/other law ones (stay in Euros, probably). This means uncertainty, and equities markets hate uncertainty.

Inside the Euro, Greece is a pain in the rear but small enough to keep on life support.

Greece itself is not really the major concern; it's the spreading of panic to other larger countries.

Anyway, each time a Grexit looks more likely, the FTSE is down. Each time it is less likely, the FTSE is up.