TO AVOID ANY CONFUSION, THERE WILL BE NO FURTHER BLOGS UNTIL SUCH TIME AS I AM AFFILIATED WITH WAVERLEY COURT CONSULTING LIMITED.
MY TERMINATION DATE WITH JEWELL & PETERSEN LTD IS 7TH JULY 2012
Archive | June, 2012
Now That’s What It’s All About – ARTICLE REMOVED (from 14 June 2012)
27 JunTHIS ARTICLE HAS BEEN REMOVED
I have had a discussion with my wife who took the article totally a different way than I had meant and I worry others would do likewise.
I am not someone who brags or talks about the great I am.
My mantra is to understate as the only thing that matters are the people – my family, my friends and my clients.
So to anyone who read the original article – all I was trying to say was how proud I felt that through my endeavours my clients have been able to live the life they deserve.
Please forgive me if it came across as arrogant or bragging – that was the last thing it was meant to be.
RBS To Scrap IFA Arm and Offer Restricted Advice
25 JunI understand the principle of “Restricted Advice” and as a business model understand the needs of a bank to maximise profits, minimise costs and control the focus and the advice. I accept that they have made the decision to replace the IFA Arm with a “Restricted” Advice Model.
I believe that this is appropriate for a sales model to offer Restricted Advice whereas “Independent” will be left to those offering advice rather than product sales – yes, I am biased as I am and will always remain an INDEPENDENT FINANCIAL ADVISER – service and advice is my mantra. I am unclear of RBS’s use of the term “specialist” within the Restricted Advice model.
This is very close to my heart, as I am in the final stages of serving notice with Jewell & Petersen Ltd – I will be trading through my limited company Waverley Court Consulting Ltd as an Appointed Representative of Julian Harris Financial Consultants. The reason for this is to retain my status as INDEPENDENT, the service provision, support received and care I provide to my clients both now and in the future following the changes implemented in 2013.
Royal Bank of Scotland (RBS)
It’s official, Royal Bank of Scotland’s IFA arm is set to become “Restricted” Advisers under a restructure of the banks financial advice division which saw it announce plans to cut around 600 financial planning roles earlier this month.
The advisers who were IFAs within RBS will form the backbone of a new restricted service which will also house some of the advisers affected by the cuts announced last week.
The new service is expected to launch in October 2012.The advisers under the new restricted advice proposition will be called “specialist” financial advice managers with additional roles to be filled through internal recruitment and some advisers will be dedicated to business and commercial customers.An RBS spokeswoman said: ‘we will be offering a full advice service to our customers under a “restricted” badge, our existing IFA advisers will be moving into the new advice model together with a significant number of new advice roles being created.
‘The present RBS Group advice model is composed of IFA and tied propositions across private bank and financial planning.’The bank said it was currently researching its final panel proposition but confirmed that it will consist of solutions from the RBS Group and a set of third-party providers.
Market Outlook – 25 June 2012
25 JunMonday to Wednesday we saw positive market growth and then Thursday happened, which lead to a nondescript trading day on Friday.
Looking across all indices it is clear that this is NOT a decisive end to the recent rally – the market has managed to hold the line above key pivotal points.
Economic Calendar
There was not much data for last week and what there was, was not of the most influential nature. Some numbers came out of the property sector and the data was reasonable.
The good news – all data considered, there are improvements in the figures from the construction and general property market. There is still a long way to go to see these markets to return to the prosperity seen before the recession but they are improving.
The coming week :-
- new home sales data
- consumer confidence statistics
Stock Markets
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The markets are in a neutral position – neither positive nor negative. We wait to see the catalyst which will shake it out of a current narrow trading range. It looks likely that the bulls may have a momentum edge, but the ceiling is looking just as tough as the floor is now. With that in mind…
Last week’s FTSE 100 high around 5,620 confirms one of the items the bulls should have been worried about – resistance at the 150-day moving average line. The upper 20-day Bollinger band has also shown a point of resistance. This may be a tough threshold to cross.
VIX Index (CBOE Volatility Index)
The VIX index spiked on Thursday to above 20 and has since dropped back to 18.11, back below both the 200 day and 150 day resistance level. This adds weight to te bulls argument, at least short-term. In fact, had it not been for the VIX’s new trend back under its key moving average lines and then its continued pressure on the lower Bollinger band lines, we might not be able to say the VIX was clearly moving lower.
SO WHAT DO WE THINK THIS MEANS ?
It may not be exciting but there is no strong trading indicator – the market’s are at a crossroads. My personal expectations are bullish – ultimately based on the VIX and the overall market momentum.
Eurozone Growth Package Agreed
25 Jun Germany, France, Italy and Spain have agreed measures to boost growth expected to achieve growth of 1% of the currency area’s economic output through a 130 Billion Euro Growth Fund. The growth package is expected to comprise several measures already in the system, such as, to boost spending on infrastructure and other investments, backed by European taxpayer money.
The concern being no new money is expected to be involved, the agreement will end as more symbolic than physical. The money meantioned has already been agreed and is in the system – so it will not be a massive injection of cash to rescue struggling European economies.
The agreement may represent a political victory for the recently elected French president, who has demanded a growth pact despite strong reservations expressed by his Germany counterpart. The leaders also sought to agree other proposals on closer integration – including a banking union and a financial transactions tax – to be put forward at the broader EU summit. However, they did not reach any agreement on the idea of eurobonds – jointly backed Eurozone government debts used to finance EU government budgets.
Spanish banks
Friday’s talks had been expected to involve a formal Spanish request for Eurozone financial assistance. However, no mention of a request was made in the press conference following the talks.
The Spanish, Italian and French leaders have advocated a banking union for the Eurozone, likely to entail much stronger central regulation and supervision of European banks, as well as the creation of a common Europe-wide deposit guarantee scheme.
Spanish and Greek banks have experienced significant withdrawals of deposits in recent months, on fears that they may be insolvent, or that their home nations may exit the euro.
All the banks in Eurozone peripheral economies, including Italy, have found it very hard to borrow from other banks and money managers since last autumn, forcing the European Central Bank to provide them with an unprecedented trillion euros of three-year emergency loans over the New Year.
Market Sell-Off Or Start of a Rally?
22 Jun
The commodity markets suffered one of the worse days for market sell-offs yesterday – is this a clear indication of a global economic contraction? We all know that the fundamentals have been deteriorating for some time but have the eternal bulls now thrown in the towel? In other words, perception is negative.
15 international banks have been downgraded including Barclays, Bank of America, Goldman Sacks, Citigroup, J P Morgan, Morgan Stanley, Deuteche Bank and Credit Suisse, to name just a few. This will drive sentiment and fear further undermining confidence and the hopes for global prosperity.
This has led to a bit of consolidation and profit taking following the recent declines and relief rally (post the Greek election). It could be something far more dire or reality finally entering the markets. Well, the volatility keeps you questioning.
Fundamentals haven’t changed but investor sentiment certainly has – in the last month we have seen the VIX index drop from near 27 to under 18 and now back above 20. This shows sentiment is fragile and is lurching from one extreme to the other.
So are we looking at global declines and the end of the world as we know it? I don’t think so – right now sentiment is negative and for those willing to accept the volatility this could be profitable. Care as always is needed as some markets will benefit through this difficult times and some will “crash and burn”.
For those in the commodity space – you are in for a very rough ride and there is currently a higher likelihood of loss rather than gain. What ever sector/manager/strategy you take – take care as this is a very opportune but troublesome markets.
US Economy Still Growing But Slower
21 JunThe Fed’s move is a reaction to a fairly gloomy assessment of the state of the US economy. The recovery in America is still happening, but slower, and what’s going on in the rest of the world poses “significant risks”. The Federal Reserve cut its forecast for economic growth in 2012 from 2.9% to 2.4%; and predicted a central unemployment rate of up to 8.2%, having forecast up to 8% on 25 April.
Ben Bernanke confirmed their plan is to keep long-term interest rates low, in the hope it will encourage the consumers to spend and businesses to employ more workers. This is an extension to the policy, which started back in September 2011.
In yesterday’s announcement the Fed also extended its programme of swapping short-term bonds for long-term ones, known as Operation Twist, until the end of the year. The idea of the programme is to cut the long-term cost of borrowing for businesses and households. (The programme is worth $267 Billion (£170 Billion).
The central bank’s statement pointed out that “growth in employment has slowed in recent months, and the unemployment rate remains elevated”.
It has kept interest rates unchanged at the level of zero to 0.25%.
This was a rather a somber affair off the back of strong stock market movements but so far this may just be a relief upswing. The general opinion is this has, at least in part been driven, over the Eurozone Crisis and especially the outcome of the Greek Election. There is still the rather worrying economic and fiscal news from Span and Italy; or the overhang fears from India and possibly China (but tinged with some potential of positive news shortly from China – fingers crossed).
Why The Markets Are Rallying?
20 Jun
Recent trading sessions highlight what a drag worries especially in Europe have had on stock markets. It seems that every time “apocalypse euro” news hits a pause, stocks soar. Investors are being treated to better general data than feared, but the real enthusiasm is expected to be coming from a two-day Federal Reserve meeting that began yesterday.
The market is seeking new stimulus from Bernanke & the Federal Reserve, so while the VIX (NYSE: ^VIX ) is dropped highlighting a reduction in what may call the fear index, expect volatility to return once the meeting concludes later today. Meanwhile financials like Bank of America are soaring on the potential extension of Operation Twist.
The major indexes are all turning in strong gains.
Fitch Downgrades Inda’s Outlook
19 Jun
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Ratings agency Fitch has cut outlook for Indian’s economy to negative as the country’s growth faces “heightened risks”. The concern is India’s growth potential “will gradually deteriorate if further structural reforms are not hastened” and the Indian government had made little progress on reducing its deficit.
The downgrade comes just days after Standard & Poor’s warned that India could lose its investment grade status.
“India also faces structural challenges surrounding its investment climate in the form of corruption and inadequate economic reforms,” Fitch said in a statement on Monday.
India’s economy grew at an annual rate of 5.3% in the first quarter, which is the slowest pace in nine years. There are fears that growth may slow further in the near term amid increased global volatility.
To make matters worse, on Monday, the Reserve Bank of India (RBI) left its key interest rate unchanged despite pressure on it to lower borrowing costs. The reason given was high inflation.
After The Greek Election – Stock Market Trend Analysis and Forecast
18 Jun
The world watches as Greek politicians build themselves up into a frenzy.
The Eurozone problem is not really about Greece but rather about the contagion consequences for the rest of the Eurozone that Greece risks triggering.
A Greece exit would change the dynamics of the single currency creating the reality that the Eurozone currency could or maybe would fall apart.
We have seen signs in the credit markets response to the Euro 100 billion Spanish bank bailout by pushing up the Spain’s borrowing costs to Eurozone record highs of over 7% from 6.5% pre-bailout. The belief being, the Euro 100 Billion will have no positive economic consequences for Spain, but is purely to keep Spanish banks liquid whilst insolvent.
Good News for the Markets?
The election outcome is expected for the majority of observed trends to start reversing as the Financial Armageddon of uncertainty and fears around Greece, at least short-term, start to dissipate. In such a climate of increasing uncertainty, markets increasingly discount even greater future uncertainties – leading to what we have seen in the stock, bond, property and commodity markets i.e. markets such as stocks, commodities and Euro should rally and markets such as US and UK, bonds, dollar and sterling fall.
Fundamental Inflationary Background
The fundamental background is that of the world markets about to be exposed to another wave of highly inflationary central bank money printing liquidity.
Stock Market 2012 First Half Strategy
As regularly indicated since Mid December 2011, in view of expectations for a tough year for a maturing stocks bull market during 2012, my strategy for the first half of 2012 had been to take a very defensive portfolio strategy – cutting exposure to the stock markets, increasing gilt exposure and absolute returns strategies (Dec 2012) and then returning to normal exposures (May 2012).
Stocks Stealth Overall Bull Market Investing Strategy
The over-riding growth market strategy since the birth of the bull market in March 2009 has been pretty simple – the greater the deviation from the preceding Highs leads to greater buying opportunities, as the bull market should ultimately resolve to new highs.
Market Sentiment – Market sentiment is usually in synch with the mainstream media, which at this point in time should suggest that it was at its most bearish in the face of an imminent eurogeddon event called the Greek Election.
However the short-term rally that has taken place over the past 2 weeks is contrary to the mainstream media noise, on face value this either implies that the market is discounting uncertainty or that the market is buying to sell on the news.
In terms forecasting trend, it would have been much better for the market to be falling going into the Greece election as that would better sow the seeds for a stronger market reversal.
Following the Election – I expect the short-term sentiment to be bullish leading to an upswing in the markets. The question is, Is It Sustainable?
Stock Market Forecast
This analysis is resolving towards a picture that is not as bullish as I thought it would be given that we have already had a correction, and are in a rally. However it is not as dire as it could also have been.
The key point is that the long waited for Greek Tragedy has finally arrived which will result in much dissipation of uncertainty. The big picture remains exactly as thought :-
In terms of a forecast, an imminent positive trend. How far will the break up go? I believe there are a couple of range trading opportunities in the near-term. However, I am not seeing any real reason to start accumulating much stock in terms of long term investments because there is no clear evidence that the stock market looks set to break out of this trading range so it’s not appealing in terms of longterm risk vs reward. I will wait to see whether the stock market shows relative strength or weakness against this forecast trend.
welshmoneywiz 