Considering we seem to be going through a worrying phase at the moment in the markets there are large percentage of very positive statements coming out. Lots of companies reporting best ever results and saying the outlook is good. Shell, BT, BAT, Rolls Royce, L&G, Reed Elsevier all reporting excellent figures today amonst 1 or 2 bad ones today.

John Piper (tech analyst) predicting the very worst for the markets in the coming months. I think if we can keep a lid on inflation, some peace in the middle east we will see a good rebound. How do you read it??????????

I hope not Kivver, don't want any competition for AYM!! It's an interesting place to visit.
kim

No crisis, just the unrest in Middle East & the Summer lull.

European markets tend to be more active from Oct to Mar. Online trading always peaks towards Xmas/New Year. Also, most companies year end falls in Dec or Mar and trading is usually active in anticipation of the full year results.

Kivver, my new year resolution is to invest only in companies in Footsie 250. Not much to gain or lose but less time consuming. Having said that there are some safe minnows in AIM like BNH and AVM. Good luck.

Ramu, have look at Kenmare resourses KMR, as we get closer to opening time, and the markets wake up a bit i am looking for 60p at least. DYOR, smaller shares always more risky, this is my biggest holding by far. Nice long term share for me is National Grid. Good Luck.

Kivver, interims are normally in late Sep. Are you expecting any RNS before the interims? What is your timeframe for 60p? Thanks.

the mines is not even open, so will not expect them to make any money, and they have a large debt. It is debt against money expected to be made, analysts think the shares at worst should be worth 60p at best much, much more esp if offshoot agreements can be forged. The mine is reported to be on schedule to be ready to start production before the end of the year. I would hope 60p should be here by January 07. Have a look at http://www.kenmareresources.com/pdf/canaccordkmr0606.pdf you do need adobe reader to look at it.

Kivver,

Very promising and I'm sure the SP will rise significantly once production commences. Also, 50% of the orders are prebooked which is comforting.

On the downside, world market prices for titanium and currency fluctuations will affect the SP.

Kivver, thanks for bringing this to my attention but I feel this share, like most in AIM tends to drift on lack of news and I'll plunge in when the SP is around 35p. Good luck.

Funny enough im waiting for something similar and this inflation scare may just do it. Dont think its an aim share btw.

US interest rates might go up, is that the crisis??

xstrata, cadburys, alfred mcalpine and lloyds alll with very positive results. I think its top up time ladies and gentlemen. Fste100 could end the year around 6400 - 6500 iMHO.

Kivver, the market looks to the future and only sometimes the present.

doesnt look like it at the moment Stan, superb results and outlook day after day by big companies, but market down if anything. When all return from holidays i think we will see a bounce depending on the middle east of course.

RBS better than expected results, BA good results despite oil prices, ubc on target.

One thing your missing, Kivver.
The human element.
The markets are made by human beings making fallible decisions. it is all about sentiment. Remember the boom days of the 80's? Even when it was obvious to everyone that the economy was a house of cards with too few on the bottom, people still rushed in, buying up everything and sending the market sky rocketing. It was followed by an almighty crash and a long drawn out recession that brought down the curtain on the "Greed is good" culture.
What we may be seeing now is a smaller version of it in the negative. despite fairly benign economic conditions, people don't feel too good about it all and are hesitant to invest. Perhaps, when the light of realisation dawns we will see an almighty bull run. Perhaps not, but the human factor will dictate it in the end.
Alan

Well put Alan, im banking on a moderate bull run come sept - march, to reflect the excellent results and positive outlooks of many top companies. Inflation and the middle east depending of course!!

Inflation looks under control to me, Kivver.
the middle east will never be under control, while ever people have a "my God is better than yours" attitude.
A good illustration of the point I was trying to make above is Yesterdays interest rate rise. A 0.25% rate rise has been made and commentators are saying it will slow / cool the housing market. It may well do, but a rise of that magnitude will add about 15/month to mortgage payments, and I suggest that if people reflected on this, they would push ahead anyway. After all, you move house or buy your first one because you need to or want to. Will such a small amount deter you? it is the equivalent of paying 2000 more for your home, yet if you wanted that particular one, you would happily pay an extra 2000 to make sure you got it.
the reason it will effect the housing market is the media fostered perception that it will crash the market and that mortgages are too expensive.
It will have the effect the bank desire, but not for the reasons we think. Its that old human fallibility thing again.
Alan

Kivver

It's always about interest rates -- US rates are "risk free" return that all other assets are benchmarked from. -- at 5% that is not bad as they were 1% a couple of years ago that will attract plenty of money from risky assets

Plus rate rises cut money supply -- i.e. short term rate rises have 1 specific goal to slow things down. At the moment, the economy seems to be ignoring what the FEd wants as it is still strong so the Fed raises rates further - slowing the money supply further. But the economy is still growing and demanding more money -- through savings and borrowings to build more -- so the money has to come from somewhere as money supply growth is below economic growth, it comes from the financial markets, which are also losing money to the "risk free" rate. Hence when things look very strong for the economy, interest rates are rising and companies are reporting great earnings and so likely to invest more in their businesses -- the market dives.

This is obviously a simplification and there are plenty of timing issues etc but the relationship between interest rates, money supply and economic growth is the basis of market movements (up or down), of course only my opinion but you did ask.

The capitalist model demands that equities and bonds must always give a higher return than the base rate.
In simple terms, if the base rate is 5%, then businesses must give a return of greater than that if they are to retain their inward investment. This may be by dividends or capital gain, but they must do it, otherwise the money others are investing will head off to deposit accounts.
it is a very simple view of the model and only holds true as an averaging. After all, companies do go bust.
The point is, that an increase in the repo rate is to be welcomed, providing it does not lead to deflation or stagnation. if this holds true, then the effect will be to raise real returns on equities, which is of benefit to us all.
The real problem is for heavily leveraged companies, who must grow exponentially, to satisfy both the loan repayments and the demand for higher returns for investors.
Alan

Thanks you 2,, loads to ponder there. I would have thought, a good economy, good results from companies would lead to a postitive market, but maybe not.

The markets tend to be forward focussed, e.g. you buy a stock because you think it will have better results, good news etc. over the course of the next year or between interims. Results are a sign of past performance, and if economic conditions change, they may not be repeated or bettered in the future. At the moment the market is undecided as to how severe the affect of inflationary pressures and higher interest rates will be. My concern is that we are currently offseting inflation from energy, with deflation from imports from China and the far east (clothing etc.). Assuming China (etc.) continue to expand, a point will come when wage pressures increase, as the locals want to enjoy some of the western style luxury items. This will make imports more expensive, and will eventually remove the deflationary cushion for economies in the West. This will of course have a knock on affect to Western companies. The increasing levels of debt should also be a concern. Even at low levels, interest rates rises can be very severe if you (or a company) are over leveraged. It's not very good for the banks either....

In my opinion anyway......

Strawbs.

In actual fact, the mortgage banks tend, on balance to enjoy higher rates as it gives them much more margin to play with in attracting borrowers. The only real downside is if borrowing falls, but that seems unlikely in a high credit society.
As always, the key is in a sensible approach to a companies lending requirements, just as it does in your personal life.
Alan