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Investment analysis

Hopes of the world equity market rally continuing in December were dashed, when renewed concerns about corporate profits prompted investors to bank profits last week. The FTSE world index fell by 2.7 per cent.

In the US, an eight-week winning streak came to an end after profit warnings from Hewlett Packard, AOL Time Warner and Walt Disney hit sentiment and sent stocks lower. Although Packard and Disney both fell sharply it was UAL, the parent company of United Airlines, which caused the most damage as it prepared to file for chapter 11 bankruptcy protection. Over the five days, the Dow fell by 2.8 per cent and the Nasdaq 100 ended 4.5 per cent lower. It could have been worse, on Friday, stocks retreated sharply after the Labour Department said the unemployment rate had increased to 6 per cent, a seven-year high, but news that Paul O&#39Neill, the US treasury secretary had resigned later that day, lifted markets back in to positive territory as investors pondered possible changes to Washington&#39s economic policy.

European equities flirted with their best levels for almost three months early in the week on the back of merger talks in the German banking sector. Commerzbank and HVB Group Germany&#39s second and third-biggest banks were the focus of a possible amalgamation.

However, not even an aggressive rate cut of 0.5 per cent by the ECB was enough to raise spirits, as European equities were led lower by telecom and tech issues during the week; Nokia, Ericcson, Infineon & STMicroelectronics the biggest offenders. By the end of the week, both the FTSE Eurotop 300 & France&#39s CAC 40 had retreated by 4.2 per cent while Germany&#39s Dax lost 3.4 per cent.

In the UK, the FTSE 100, broke through the stubborn 4,200 level on Monday but slipped back on news of soft US manufacturing numbers. The index faltered throughout the week as Barclays and later Lloyds TSB, issued bearish trading which pushed down the financials sector, the biggest in the UK by market cap. The index ended down by 3.7 per cent, perilously close to the 4,000 support level. Mid and small caps fell by 2.5 per cent and 0.8 per cent respectively.


Henderson offers free Isa transfers to tech fund

Henderson Global Investors is seeking to administer the final blow to moribund technology funds by offering investors free Isa transfers into its global technology fund until January 31.In a move designed to help establish the fund as the biggest in its sector, Henderson is waiving charges to investors moving Isas through Cofunds and Skandia and […]

Standard adopts Origo universal password system

Standard Life&#39s extranet is now enabled for Unipass Unipass, the new individual digital certificate for IFAs from Origo that replaces the need for individual passwords to access different extranets.Standard Life joins Norwich Union, Prudential and Skandia as the first providers to adopt Unipass. A further 13 providers, including Friends Provident, AXA, and portals, Assure Web, […]

Premier Asset Management – Premier Extra Income Plan

Thursday, 12 December 2002 Type: Capital protected bond Aim: Income or growth linked to the performance of the Dow Jones Eurostoxx index Minimum-maximum investment: £7,000-£1m Term: Five years Guarantee: Original capital returned in full provided the index does not fall by more than 30% Return: 6.25% income a year, 0.5% income a month or 34% […]

Options on endowments

It would appear that mortgage endowment policyholders have several options open to them to address any projected potential shortfall in their plan&#39s targeted maturity value:•Increase their endowment&#39s premium.•Convert all or part of their loan to a capital and interest basis.•Make separate alternative provision for any anticipated shortfall.•Do nothing.•Complain, alleging that they were missold the endowment […]

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(Another) downhill stroll — retirement planning

A report published this morning by the CIPD (CIPD Employee Outlook March 2015) provides yet more interesting data to the changing landscape of retirement planning. It should be remembered that we are in a period of genuine flux here given that the default retirement age was scrapped three years ago, and new pension freedoms come online in April. Both of these alterations will have a huge impact on how employees plan for their retirement.


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