The Markets Today On Tuesday 6th March 2012

6 Mar

The markets have added sharp losses today following declines on Monday. The focus this week has been around the drop in China’s growth target to 7.5% and today fears that the Greek Debt Swap Deal will not be completed by the Thursday deadline.

My client’s have benefited from us taking a diversified defensive asset allocation approach, which has led to the recent market declines having a generally neutral effect on portfolio values. If the market trend continues, by not suffering a loss we are in a strong position to re-allocate and take advantage of the market imperfections. It is too early to talk about a change in the portfolio allocation but a change is expected in the not too distant future but is dependent on personal circumstances, attitude to investment risk, financial plan, aims and specific goals.

Both the CBOE & VIX Volatility Indices, widely considered two primary indicators of fear in the market, jumped for the first time since early 2012.

The focus has turned back to Greece as investors were fearful over the Greek Debt Swap Deal. This plays a significant role which has been designed to keep Greece from defaulting. This has caused a drop in both European markets and gold prices as the Euro vs US exchange rate worsens. Greek finance ministry officials have said the deal will be completed on time by Thursday’s deadline.

I have been expecting a pull-back in stocks, following the recent market indicators and some have looked notably overstretched. This is in addition to political tensions between Iran and Israel, which have propelled oil and gas prices higher in recent weeks, threatening to stall the global economic recovery.

President Obama said earlier today, at a news conference he (and the US) will not allow Iran to acquire a nuclear weapon and signalled opportunities to settle the dispute with the nation over its nuclear program diplomatically. He confirmed that the near term meetings with Iran will clearly identify if their nuclear program is for peaceful purposes or otherwise. This comes a day after Obama met with Israeli Prime Minister Benjamin Netanyahu.

Any questions, please ask me –

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