13 November 2014

Market comment: a calmer end to 2014?

The calmer conditions that were ushered in as the clocks changed have continued

There will be plenty for investors to take into account as the days shorten, with a positive plethora of news and data due in the days and weeks ahead. Centre stage will be the Bank of England’s quarterly inflation report, due to be published shortly. All the signs are that the rise in the cost of living is likely to remain muted, though we will, perhaps, have a further steer on this when jobs market data is released at about the same time. Wage settlements – key to inflationary trends – rose only 1.2% in the year to October, so little pressure is likely from this quarter.

We are also learning more on how consumers are behaving, with the October Sales Monitor from the British Retail Consortium suggesting September’s decline had been arrested, even if growth is notably absent. Retail followers, as well as examining Sainsbury’s half year results closely, will have seen the announcement that Tesco had been displaced as the largest entertainment retailer by Amazon as further evidence that the traditional supermarket groups are finding current conditions challenging.

Recent figures from Vodafone and Land Securities, the property giant, provided a little more cheer. The news that Vodafone was to enter the broadband and TV market helped lift their shares and help the Footsie on its way. Certainly, the report from the Royal Institute of Chartered Surveyors, due soon, will be worth reading to see if the housing market is continuing to cool.

All in all a busy time lies ahead of us. Sentiment seems to be improving and confidence is slowly returning. Even the measures announced by Bank of England Governor, Mark Carney, to try to head off future banking crises failed to upset the market. Investors have much to consider right now, but the signs are that a more settled period has been ushered in after the volatility of the late summer.

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