November financial market overview

Market Eye from Prest Financial

• The Bank of England held the official rate at 0.5% and has not extended Quantitative Easing.
• President Obama has been re-elected and the looming fiscal cliff problem is thus the same, with deadlock between the Democrat and Republican camps in Washington on how to deal with it.
• In his outgoing speech, President Hu said China will continue to target economic growth but with more emphasis on boosting the incomes of the lower-paid and increasing domestic consumption with less emphasis on exports.
• Japan’s economy shrank by 3.5% on an annualised basis as exports to China and the Eurozone fell. Interest rates remain extremely low and the Bank of Japan continues with its programme of Quantitative Easing to help stimulate the economy. 
• In company news, Sony, Panasonic and Sharp all announced losses as they struggle to compete against cheaper producers in other Asian countries.
• The FTSE100 slipped from 5,896 on 19 October to 5,769 on 9 November.

Prest’s house view

POSITIVE VIEW

Value Equities – These shares continue to provide strong and increasing income.

Growth Equities – These are attractive for more adventurous investors over the medium to long term.

Corporate Bonds – All grades of corporate bonds continue to provide good yields and also have some scope for capital growth in the short term.

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