Friday Email: 31 May 2013
Every Friday morning our lead analyst Mark Riding sends out his weekly run-down and upcoming events in the investor calendar, like this one:
The market has held up reasonably well following last weeks falls. A half term week that was shortened by the bank holiday on Monday produced little of note on the corporate front. I still remain nervous of the market short term and expect further downward correction. Previous dividend of the week, Caledonian Investments increased their dividend by 10% yesterday. Tate & Lyle (5.2%) and Severn Trent (8.2%) also increased their dividends, whilst De La Rue and Brewin Dolphin both maintained their dividends at last years level. In spite of a drop in profits, the weeks star performer was Victrex increasing its dividend by 15% in a show of confidence for the future.
Next week is very quiet in the UK, but the US market is pretty busy. Keep an eye on the yield on the US treasuries as this has been gradually rising, reaching a 13 month high this week. This has led to a reversal in highly defensive sectors such as the utilities. If this were to take place in the U.K, then we could see the same situation. It is a difficult one that would suggest a bullish economic picture overall, which would be good for equities generally. I think it is too tough to call at this stage. I will try and get some opinions over the coming week...
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Read next: 24 May 2013
The markets took a necessary fall yesterday and it was a relief to see it. Almost every stock that I have looked at over the past weeks has an identical graph showing a virtually unblemished rise up. Experience tells you that this will not last and so it did not. I still remain bullish for the full year outurn and would not be surprised to see the FTSE 100 breach 7000 by year-end, but I expect the markets to trade sideways to down through the summer months with the now customary year-end rally.
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