September-succes varsler oktober-storm

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BLOGS
Af: Richard Quest
22. okt 2011
September blev for en gangs skyld den helt store vindermåned for investorerne. Og det er så usædvanligt, at det næsten er et sikkert tegn på, at resten af året kan blive en nedtur på aktiemarkederne, skriver CNN-profilen Richard Quest i sin nye blog:

To paraphrase that old joke, “a funny thing happened on the way to the stock market this month…” inexorably, shares went up. Actually in the case of the US market that is an understatement. September, which historically is not a good month for stocks, turned into the best of the bunch. The S&P 500 had its best September since 1939! The index rose 8.8 percent. The Dow was up nearly 10 percent and is now positive for 2010.

Europe joined in with the FTSE, gaining 6 percent. And the DAX, 5 percent during the month. A respectable performance by any usual measure except as measured against the US markets. Even Shanghai, which is down 18 percent for the year, actually rose - by just half per cent. But Tokyo made up for that, with its increase of 6 percent.

How can this be? If you follow financial news, you are being told that growth is in trouble. Protectionism is on the rise. Consumers are weak. Japan is moribund. China is slowing down. It seems odd.

Reading the analysis, there are a myriad of reasons. Firstly and most obviously – shares were beaten up in August. Look at the graphs and there were long ski slopes down during the month on all major markets as economic worries took their toll. (Dow & S&P down 4 percent in August). Prices were cheaper and money was looking for a home. It was a case of buy on the dips. Secondly, M&A activity is back into the market. This always creates buzz and froth. Deals are pushing up stocks. Thirdly, companies are still buying back their own stock which also adds a fill up to the market. Inthemoneystocks.com offers up the reason that the dollar index was down so that also contributed. There are no shortage of technical pundits who can explain this.

I think that one of the big reasons was that the Fed almost admitted it was ready to print more money with quantitative easing II. The Bank of England is likely to also do this. And the ECB continues to give banks as much money as they want – at next to nothing costs. All the comment and rhetoric from central bankers is that they are not going to sit on the sidelines and watch the whole lot go down again.

So a dose of reality -- for many markets September’s gains only erase this year’s losses. Tokyo is still down 1 percent for the year. Shanghai is down more than 18 percent and the Euro-bonuses are barely budging over 3 percent. Welcome though September was, it is a lifeboat not an ocean liner.

So much for the rear view of September. What about the rest of the year. I am pretty sure it would be a mistake to take September as an indication of an upward ride into the horizon.

The economic malaise in the US and Europe will take its toll on corporate profitability. In the next few weeks we will get earnings from most of the US and European big companies and however good they are. It is likely that they will warn the best might be behind them. Government austerity plans are about to hit consumers in many EU countries. The US is facing divided trouble political times in the mid-term elections (and who knows what after November 2nd.)

The clearest sign that things are not normal is that gold rose during September, even as stocks went up. The 4 percent gain to a record high of more than $1300 an ounce tells me all is not as rosy as it seems. Whatever you may think of gold’s potential, it remains in the eyes of many the investment of last resort.

The winter months are going to be hard. Even Walmart’s CEO of the US division, Bill Simon, warned “for all you adults out there I think you should plan on socks and underwear for Christmas.” Hardly a rousing endorsement as we enter the fourth quarter!
Profil
Richard Quest authorimage Quest Means Business sendes hver mandag til fredag kl. 20.00 dansk tid på CNN International med Richard Quest som vært med adgang til en vifte af eksperter og korrespondenter der leverer analyser, tal og nyheder fra alle kroge af finansverdenen. Se mere på CNNs website.
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