Week 38 of 2012.
With all bazooka’s fired – the markets have more cash on tap than they can deal with. Equities have been sluggish, oil’s progress stymied by OPEC comments and Eurozone still using the bucket and water technique on the shaky boat with spain being the latest weighing concern.
With all that cash sloshing around – it has to be put to work. So eventually the Equity rally should gain some traction. For now the markets seem content to take a breather and no doubt with Earning season about to kick off proper, attention will turn back to corporate performance. Whilst earnings are a little retrospective, the guidance that follows is certainly not. The markets might be anticipating lower targets on many stocks which isn’t always a bad thing as it sets the tone for potentially a record breaking Jan earnings season.
Historically markets have risen into a US election many more times than they have fallen. Throw in the QE3 injection and it’s hard to see anything other than a healthy and robust Santa rally. Anyone citing fiscal cliffs is just desperate for a pullback opportunity. Sure – the US fiscal policy will come to a head but Congress are more than able to act even if it means being a tad ‘difficult’. If the Eurozone can mange their affairs then the US can certainly do their bit. They ticked the boxes last time around and they’ll do the same again. Why? Simple – they don’t have a choice. But that doesn’t mean they can’t make a song and dance over the decision in true over-dramatic US style. It’s time for the US to ‘man up’ and think about the bigger picture.
Key Indices summary – The DOW closed week 38 down 14pts at 13579 reflecting a non-eventful sideways week. The FTSE 100 finished down 73pts at 5853.
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 38 stock picks summary:
Highlight of the week has to be Kurdistan and Baghdad agreeing to a new payment system which sees foreign companies bag long delayed payments. It’s a firm step in the right direction and seems to be clearing the way for a much needed O&G law. The latter could open up the south and north of Iraq to huge investment and transform the entire region. With a squeeze on Iran underway, the US will no doubt be overjoyed with news that Iraq is set to boost production. As will China who currently have a 400kbopd gap in their resource demands due to cancelling deals on Iranian exports.
The sideways trading saw most stock lists fall after some healthy past weeks. The independent is still streets ahead with an outstanding gain to date. The b-list and Tempus Times switch places and the Hotlist brings up the rear. The latter clearly hurt by BOR’s duster and MXP’s current finance woes after halting NUR-1 drill. With just 14 weeks left, it’s going to require some major news combined with the QE3 magic to see the high risk commodity players gain some momentum.
Current standings / Week 38 Results
1. The Independent 2012 +46.46% (weekly loss of 0.77%)
2. Tempus Times 2012 +10.95% (weekly loss of 1.01%)
3. The ‘B’ List 2012 +8.73% (weekly loss of 3.29%)
4. The 2012 Hotlist +2.72% (weekly loss of 2.84%)
Click on Portfolio image to enlarge
