Week 14 of 2012.
A short week with little catalyst to drive the market ahead of earnings. Hence it was not surprising to see Europe make it back into the headlines. You’d think by now that the market would have got its head around the Euro crisis and the steps ahead. Spain’s recent woes are no revelation yet the market appeared to look surprised when recent auctions did not raise the interest that many had hoped.
The Euro crisis is not going away fast – it’s going to be a slow recovery but as the ECB have shown already, it can be managed.
Across the pond, the Federal Reserve has been popped a few balloons by announcing that they intend to stand back and hold off on QE3. The market had been calling for its next fix but like any good doctor, if signs of improvement are evident, then it’s worth trialing some ‘walking’ without stabilises to see how the patient fairs. This might end up with more bruises in the short term but a stronger recovery in the long term. Any wobbles or falls that look nasty might see the Fed do a U-turn – and these could come from unseen places like China or Iran.
The DOW closed the short week at 13,060 down 152pts on the week and the S&P closed at 1,398 notching up its worst week in 2012 after securing its best quarter in 14 years just last week. The commodity heavy FTSE 100 finished the week down 41pts at 5727.
Another shortened week lies ahead but with the new tax year now active and earnings season upon us – volume should be stronger as the week gets into full swing.
A virtual portfolio has been set up using the 2011 final trading day close figures as a starting point and £1000 has been invested in each stock. This does not include buying fees or stamp duty and is purely intended to be used as a benchmark or summary for each week. 2 newspaper top tens for 2012 have been included to help monitor/compare against.
Week 14 stock picks summary:
The Independent continues to head the selection of 2012 top share pick lists. A solid performance against a wobbly FTSE.
Fi stocks could be back in focus this week as BOR could be due to announce news this week on their Darwin prospect. Any success story will surely see all Fi’s do well.
Next week could see news on COVE and Ithaca – both are in takeover discussions and have been so for sometime now. The E&P sector has cooled down a tad on takeover fever which normally means it’s ripe for the next wave of enthusiasm! If the offer prices for IAE and COVE are towards the high end of expectations – then any early celebrations may well be justified. The sector is looking cheap based on current oil/gas prices and takeovers have a habit of ‘proving’ true asset worth rather than the usual trading/market sentiment.
Earnings season kicks off too, so watch out for quarter results, interims and finals.
Current standings / Week 14 Results
1. The Independent 2012 +33.29% (weekly gain of 3.31%)
2. The 2012 Hotlist +20.08% (weekly loss of 1.40%)
3. The ‘B’ List 2012 +11.49% (weekly loss of 2.70%)
4. Tempus Times 2012 +11.00% (weekly loss of 1.78%)