Stock Market Report wk#39

An interesting week with the FTSE going sideways with a one day price spike on Tuesday. This event provided a learning outcome for me as well as a new addition to the Trading Simply Trading Plan. More on that in the month end report, to be published later this week.

Stock Markets This Week

Its funny how TALK of a solution to the financial crises makes stock markets rise as they did at the beginning of the week. Measures included asking banks to write off some of the Greek debt that they hold. It appears that European politicians have a plan to have a plan ready in place for the G20 meeting at the beginning of November. Markets love talk, rumour and speculation it seems.

In other news this week, Warren Buffet, has announced a share buyback programme of the company he owns, Berkshire Hathaway. This is an excellent move on his part, although he was reluctant to do it. Currently, Berkshire has $47 billion in cash and is willing to spend about $27 billion for the share buyback programme. This should result in the value of Berkshire shares rising as the public supply of them is reduced with this repurchasing.

Back to the markets and the week’s price spike on Tuesday was due to more talk, rumour and speculation that discussions among G20 and other leaders included the strengthening of banks who are exposed to countries who are at risk of default. Other ideas included writing off some of Greece’s debt and an increase in the European bailout fund. What is interesting is that no plan was agreed at all and yet the FTSE and other markets rose massively on Tuesday.

Ernst and Young have stated what a lot of people already know which is that a Greek default is now a matter of time. They also believe that the likelihood of recession in the Eurozone has increased sharply, even though Germany agreed an expansion in the European bailout fund. The Prime minster of Greece, George Papandreou has been asking Europe for $8 billion for his country and analysts have estimated that the European bailout fund needs to be $1 – 2 trillion to solve the current crises. All these numbers are staggering and we cannot forget that Italy has a larger amount of debt than Greece does.

As a trader of UK listed shares, I am always interested in any of the external factors that will influence UK shares prices and the European debt and world financial crises is still top of the list. Others issues that I am tracking are global growth rates with emphasis on Europe and the US. The fact that anyone (not just me) can take long or short positions means that we should in theory at least be able to take advantage of any macro economic news story, however long it is being played out.

My Trades

No opened or closed trades this week. What I can tell you is that I have six open positions at the moment, half of which are in profit and half of which are showing losses.

until next time 🙂

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Any trades listed above are closed trades as I do not make public open positions.

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