Market discussion

  As a down January is upon us ,with gusto . The market is heading down because Mr M has decided to attack the periphery ( ie smaller countries). Good plan . That will no doubt take the FTSE , to just above the 6000 figure.
  Plus , of course , The USA bond buying reduction will add to this concern.
  Thus , healthy re-trace ensues and a decent stabilisation for materials and material stocks ,which since  2011 `s peak , have been pummelled . Oil and gold stocks are now of interest and you should be adding them to your portfolio .

1998 Similarities

This year’s drop in global equities is half as large as the worst retreat of 2013, when the MSCI gauge fell 8.8 percent from May 21 through June 24 after Bernanke raised the possibility in Congress of reducing stimulus. It slid 14 percent between March and June 2012 as Europe struggled to extinguish its sovereign debt crisis in Greece and Portugal.

Declines will prove temporary, much as they did in 1998, according to Mark Matthews, the Singapore-based head of Asia research for Bank Julius Baer & Co. Like then, the latest selloff comes after a five-year advance lifted valuations above historical averages. The S&P 500 traded as high as 17.4 times annual profit in December, the most expensive level in almost four years, data compiled by Bloomberg show. In 1998, stocks rebounded from a 19 percent drop that came as currency turmoil in Asia and Russia spread to developed markets.

The most vulnerable emerging markets “have already reached a bottom in terms of their ‘badness,’” Matthews said. “Even if they do continue to see economic slowdown, I cannot believe it would be enough to derail the strong U.S. recovery.”