Rolling coverage of the latest economic and financial news
- Latest: UK PMIs show economy struggling in December
- PMI falls to 48.5, showing sharpest contraction in 41 months
- Factories suffer worst month since 2012
- European stocks hit record high
- Introduction: US-China trade deal lifts markets
- End of political paralysis in UK
Russ Mould, AJ Bell investment director, reckons the FTSE 100 index could climb to 8,000 points in a year’s time, from around 7,500 today.
He argues that the UK stock market has been “unloved” for some time, and arguably undervalued compared to likely corporate earnings.
“Granted, the issue of Brexit must still be resolved and doubts continue to hover over the health of the global economy. However, were the UK to strike a trade deal with the EU, Washington and Beijing to settle their differences once and for all and governments around the world abandon austerity and launch looser fiscal policies then the world could look very different.
“Even if the FTSE 100 fails to challenge the 8,000 mark, investors may still be able to prosper through careful stock selection, as the index is packed with companies which either look cheap on an earnings basis, offer a fat dividend yield, or both.
This is from Ben Chu of Newsnight about today’s weak UK business data, and strong market rally:
What now for the UK economy after #GE2019 ?
Well, the latest UK composite PMI business survey for December this morning is VERY weak – slipped further into contraction territory….
Consistent with 0.2% CONTRACTION of GDP in Q4 on historic patterns… pic.twitter.com/DDYPCkKhBp
….yet the mood in markets is very different in the wake of the Conservative election victory last week.
FTSE 100 stock market is up strongly this morning… pic.twitter.com/QlM8Qdvusd
…and sterling has popped to its highest since May 2018… pic.twitter.com/b5AoWu0JgE
…Two big macroeconomic questions:
1) Can the UK buck the global economic slowdown trend?
2) Will the election result really “unlock £100bn of investment” as Boris Johnson promised in the election campaign?…
…A reminder – UK real business investment has gone essentially nowhere for four years: pic.twitter.com/EiEaxSwtpD