Editorial Contributor
2013 OUTLOOK THE TALK IS ALL ABOUT EQUITIES! by DAVID BUIK OF CANTOR INDEX
Had we all known that growth was going to fall out of bed globally throughout 2012, and that Europe would be virtually asphyxiated by a toxic sovereign debt crisis, one would have been forgiven for disbelieving that the DAX would rise like the proverbial grilse — up by 28.7% at the time of writing (17th December 2012), the Hang Seng responding similarly by 22.5%, the NIKKEI by 15.2%, the DOW by 7.5%, the S&P 500 by 12.4% and the FTSE in contrast by a meagre 6.2%.
Since then, a combination of Ms Merkel’s ‘Dulcamara styled love potion’, which mesmerised the EU in to believing her gospel (!), plus the ECB’S loquaciously charming Mario Draghi’s steely control of the ECB has calmed the frayed nerves of investors and traders.
The Greek debt crisis, the parlous state of Spain’s banking sector and its gargantuan level of unemployment and Italy’s seeming political incompetence until Monti grabbed hold of the reins, sent 10-year bond yields into orbit by the end of June — Greece debt yielded 28%, Spain 8% and Italy 7%.
These punters genuinely believed that the EU and the IMF would do whatever had to be done to deliver financial peace in our time (and no doubt goodwill to all men!). All I can say is that it is just as well that I was nowhere near a trading desk, as
So long as a bottomless cesspit to accommodate as many unappetising securities remains, the system will remain afloat...
I would have been buried without trace... I would have been a reluctant buyer of equities and would have definitely have missed out on a massive bond rally. And so, I would have missed out on both counts. As a representative bookmaker of the spread betting fraternity, I don’t offer advice. However, what I can do is to pass on comments made to me by the many contacts I have made in the last 50 years in the City. It is imperative to remember a few fundamental points with regards to European markets. The FTSE 100 is not a barometer of UK economic activity, as 70% of its earnings are gleaned from abroad.
96 | www.financial-spread-betting.com | January 2013