Friday Email: 09 August 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:
We expected a correction in the market this past week and so it happened, but not for the reason that we were expecting, which was a blow out number for non farm payrolls last Friday. As it happens they were below expectations so an early end to QE is off the table for now. In the UK there is no danger of QE ending any time soon and the Bank of England is now sending signals of continued low interest rates until 2016 unless there is a surge in employment and inflation.
It was not a bad week on the dividend front with former dividend of the week Legal & General producing a 22% increase and on the same day intercontinental hotels producing yet another 'special' dividend. Old Mutual followed up Legal & General with a 20% increase in its dividend on Wednesday. Contrasting fortunes in the insurers saw Aviva reduce its dividend by 44% on Thursday whilst Standard life managed a 6% increase. Surprisingly Schroders produced the biggest dividend increase of the week, upping by 23%. Rio Tinto and AMEC both produced creditable 15% increases.
The week ahead looks quieter than the past two hectic weeks. Another two big insurers report to the market with the Prudential and high yielding Resolution. The market was given a boost this morning with very good data coming out of China. That should help the miners.
The Friday email is delivered to over 20,000 subscriber’s every week, and remains a widely read run-down of recent events and what investors can expect in the week ahead written by our chief analyst Mark Riding.
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Read next: 02 August 2013
That was a very busy week with plenty of companies reporting every day. What struck me was that the larger companies seemd to be struggling. The results were O.K, but they were not the sort of results that can help justify where the markets sit right now. Once again, it looks overbought. All eyes will be on the US non farm payroll numbers where, ironically, a blow out number, whilst good news for the US econonmy, could see the markets go into reverse; as the market starts to fret about the QE tap turning off sooner rather than later. The highlights of the week were:
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