LATEST MARKET NEWS - 11th MAY 2010
Markets have endured a rollercoaster start to May, aided and abetted by two factors:
1) The ‘Greek Crisis’
2) The General Election (and the corresponding political vacuum caused by the hung parliament)
The ‘Greek Crisis’ has been alleviated for the time being after a considerable bail-out from fellow Eurozone countries / IMF. The markets responded favourably to this, indicating that it should bring stability to the uncertainty around the most indebted members of the Euro. I mention that this problem has been alleviated for the time being, as all indicators show that Greece will require further lending down the line to satisfy its huge debt burden which is repayable at various intervals - this money merely means they can service the repayments that are due imminently.
The General Election and the hung parliament are, at the time of this article, no nearer to being decisive. The markets crave stability and the ratings agencies are desperate for Britain to tackle their large borrowing deficits. If the political situation resolves itself and the corresponding political party/parties can swiftly tackle the debt then we could quite possibly see another rise in the stock market.
As you can see, the markets are very twitchy and have a tendency to be reactionary in relation to current events. It is by no means against the realms of possibility for the recent volatility to continue for at least a few months more, meaning that your choice of investment is important.
Contact your adviser to discuss investing in one of our recent risk rated portfolios.