7 October 2015

Telling Sid Again

I am old enough to remember the first crop of state sell-offs under the Thatcher government in the early 1980s


The news from the Conservative Party Conference that the Treasury’s last remaining Lloyds Bank shares would be sold next spring enlivened a market that, while in better shape than during the high summer, nevertheless has been lacking excitement. During the week marking the end of September and beginning of October, we saw the FTSE 100 Share Index rise by just 0.3% and, while we did get off to a flying start as trading commenced in the first full week of October (helped in no small measure by a better performance from mining shares), we are still well below the heights scaled earlier in the year.

But a stronger Wall Street has encouraged Asian shares higher and helped our own stock market. Rather contrarily, the bet ter tone to shares in America is a consequence of weaker economic data emerging. The publication of US non-farm payroll figures at the end of last week suggested that the economy there is treading water at best, which in turn has led investors to believe that the anticipated rate rise will be further delayed. It’s an ill wind...

Back home, with the third quarter of 2015 only just ended, there is unlikely to be much in the way of meaningful data to emerge for a little while, though the monthly Purchasing Managers Indices are being published. These are considered to be a good forward indicator of likely economic progress, showing as they do how businesses believe they need to stock up to meet future demand. However, the UK Index came in below expectations, suggesting activity is slowing and knocking the pound in foreign exchange markets as a result.

As for the Rugby World Cup, nowhere has disappointment in England’s performance been felt more keenly than in the pub trade. With no English team to cheer on, landlords fear lost revenue as fans fail to follow fixtures. There may be consequences for TV advertising as well. Regardless of any short term effects, perhaps we should be comforted by knowing we are neither the England team manager or captain.

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