Friday Email: 03 March 2017
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 FTSE 100 has had a good week and is up about 100 points and touched a new all time high on Wednesday. My bullish stance on the market remains intact in spite of politicians and Brexit. However, playing the scenarios game, which is important for investors, especially in the short term; is becoming increasingly difficult. We still have no idea what Brexit actually means, so that is a lot of 'what ifs' unanswered. The Bank Of England is going to be in a right pickle if the pound stays this low with imported inflation and dollar based commodity prices also coming into the RPI food chain. Now that the nation is hooked on low interest rates, can they really whack them up to fight inflation? Would it actually work and what a lot of pain it would cause to the economy. How high could rates go? Not very and that is unlikely to attract investors to the pound, especially as the next move in the US for interest rates is likely to be upwards and fairly soon if the markets are to be believed meaning more dollar strength. So, it seems to me that the Bank Of England is going to have little choice but to let inflation go to some extent, at least whilst the markets and companies and investors get their heads truly around Brexit. They can get away with this for a short while because inflation has been very low for some time.
The what if game is a tricky one and you can very soon end up disappearing up your own 'ideas'. Many investors are still in fear mode and I have pointed out to members on numerous occasions that many of the most highly rated stocks are still the traditional defensives.
All of this said, in my experience in a good market all of the bad news is ignored and in a bad market all of the good news is ignored. We seem to be in a good market.
The past week has been solid, witness the new highs in the markets, especially in the US where the DOW reached 12 consecutive all time highs.
The week ahead does not see the very high yields on offer in recent weeks, but BHP has around 2.4% from its final dividend and Jupiter fund management has over 5% with its final dividend and a special. Again, there are a large number of companies reporting.
Some of you may be interested to hear that we (Investment Tools Limited) are launching a new product this coming week. Designed with financial institutions in mind, Woodseer uses an algorithm to forecast dividends for over 40,000 securities in over 100 countries. It is a great development for us and ultimately there will be beneficial effects for DividendMax members.
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.
It’s included as part of the free DividendMax trial.
Read next: 24 February 2017
The FTSE 100 has stuck to its relatively narrow trading range and is pretty much level on the week which might suggest that there is little going on, but from a reporting perspective that was a very busy week. In the main the numbers coming from companies were pretty good and the dividend picture remains very robust.
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