FTSE 250 Reaches All-Time High as Global Outlook Improves
A quiet start to the week has left the FTSE 100 hovering steady, albeit still at the dizzy heights of 6285.
London’s blue chip index has enjoyed its best start to the year for more than two decades, which is not bad considering that it only turns thirty next year. In addition, we are now sat less than 10% from the all-time high.
Whilst the FTSE 100 itself is not the most accurate reflection of the UK’s domestic economy, the FTSE 250, often thought to be a better indication of how ‘UK PLC’ is fairing, has already reached an all-time high.
What does this tell us? Stocks and shares are in rude health, and analysts are rushing to talk up their quality and call the start of the next bull market.
What puzzles many is that we have come so far from 2008 lows, yet only now are we contemplating the start of a great period for equities. A period in which 7000 and the new territory beyond looks very possible for 2013.
What lies in the way of that? There are still plenty of macro issues on the agenda, but all seem to look rosier than they did last year.
America is borrowing tactics from Europe and pushing its issues, i.e. the debt ceiling, further out.
Emerging markets and especially China are looking more bullish, and even Europe seems to have a firmer footing, emphasised in Davos last week, although elections this year in Germany and Italy should not be forgotten.
While all this sounds great, one can’t ignore the amount of cheap credit propping up the system, and this has certainly been responsible for the pickup in currency volatility since the New Year.
It’s a volatility that hasn’t translated to equities as of yet, but this has to happen eventually.
Back to the issues of today, and this morning US markets look a touch lower. We see the Dow opening around a dozen points lower at 13,885.
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