FTSE’s Solid December Record

<p>The FTSE-100 never had a losing December since 2003. Most impressively, the FTSE-100 has risen 3.4% in 2008 – the year of the crash, when […]</p>

The FTSE-100 never had a losing December since 2003. Most impressively, the FTSE-100 has risen 3.4% in 2008 – the year of the crash, when other indices under performed.

Not a bad statistic for an index which has under performed most of its G7 peers in 2012. In fact, the FTSE-100 has yet to attain new highs for the year, something achieved by the Dax 30, Dow-30, S&P500 and NASDAQ.

UK GDP growth has finally hit positive in Q3 after three consecutive quarterly contractions. Unemployment has fallen to 7.8% and retail sales continue to hold robustly despite the post-Olympics payback. The return to positive growth may be a reason for the BoE to refrain from pursuing a fresh round of asset purchases in December.

This might not be necessarily negative for the index as markets anticipate the Federal Reserve to start up QE4 in order to renew the expiring portion of its Operation Twist. Such actions have proven to boost US as well as other G7 equities in the past. Additional Fed stimulus would also be justified by the lingering downside risks of the Fiscal Cliff in the event that neither an agreement nor an extension is reached.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.