London Calling: FTSE-100 Racks Up its Best Quarter in History

by Martin Denholm, Senior Editor Wednesday, October 1, 2009

As September concluded, so too did the third quarter of 2009.

And what a quarter it was for London’s FTSE-100 (^FTSE) stock market. In fact, it was the Index’s best three-month period in its 25-year history.

As global stock markets scoffed at the traditional “sell in May and go away” adage and sizzled throughout the summer, the “Footsie” notched up a 21% gain.

The positive vibes weren’t just restricted to Britain either. Stocks across Europe enjoyed a strong summer, with the FTSEurofirst 300 Index of top European shares posting its best quarter in 10 years, with a gain of 16%.

The question is: How long can the markets – both in the U.S. and overseas – walk the tightrope between bull and bear? As

Global X proposes new sector funds for China, as well as seven new single-country emerging markets ETFs. 

Exchange-traded fund provider Global X Funds filed a prospectus on Sept. 10 with the Securities and Exchange Commission to launch six new ETFs, which will track different sectors of the Chinese economy.

The funds are: Global X Consumer, Global X China Energy, Global X China Financials, Global X China Industrials, Global X China Materials and Global X China Technology.

The funds will be 80 percent invested in American Depositary Receipts and Global Depositary Receipts, and 20 percent invested in swaps and options contracts.

The funds will employ strategies to replicate to 95 percent accuracy the performance of the underlying FTSE-created sector-specific indexes they follow after fees and expenses, and will issue creation units in blocks of 50,000 shares. Global X did not mention what management fee would be charged for investing in the funds.

The new ETFs are

It’s official: You can reduce your investment risk simply by chucking darts at a list of stocks, then buying them.

That’s if you believe a Nobel economist, of course. His crude “experiment” was the start of “modern portfolio theory” decades ago. The downside, however, was that with a reduction of risk came a dampening of profits. So scratch that idea.

How about this? A startling study in the late 1970s showed that owning a portfolio of large U.S. companies with international divisions drops your risk 10% below a domestic stock portfolio. Much better. But that wasn’t the eye-popper…

The study also found that owning stocks in international companies cuts your risk in half…

Take that, “efficiency” theorists! Yet the stuffy professors still tried to refute these results. It was a losing battle, though, as more studies emerged, laden with more evidence that international stocks reduce risk.

But the

Euro & yen add to gains…RBNZ disappoints…Foreclosures continue to stack up! BOE & BOC meet today…And Now… Today’s Pfennig!

Good day… And a Thrillin’ Thursday to you! Ahhh! A change! Just thought that with the thrilling victories my beloved Cardinals have been accumulating, that Thrillin’ would be a nice change to our Thursday lineup!

Front and Center this morning… The currencies added to their gains this week yesterday, albeit small gains, but gains nonetheless. The Fed’s Beige Book was “cautiously positive”… And… Overnight, the Reserve Bank of New Zealand met, and left rates unchanged as suspected… This and more as we begin our Thrillin’ Thursday!

The Big Dog euro has been off the porch chasing the dollar down the

European shares touched a 10-month high on Friday on optimism for a global economic recovery and with Nokia and results from U.S. bellwethers boosting the technology sector.

The FTSEurofirst 300 <.FTEU3> index of top European shares rose 1 percent to 978.34 points. Over the week, the index climbed 1.2 percent, its sixth weekly gain in the last seven weeks.

The European benchmark index is up more than 51 percent from its lifetime low of March 9, as investors have become more confident on the prospects of economic recovery.

“Things look good for the time being, but the higher we go the more we could be setting ourselves up for a disappointment,” said Andy Lynch, a fund manager at Schroders.

“The world economy is doing well, French and German GDP are positive, but that’s not surprising given the amount of stimulus being pumped into the market. I have a concern about what happens when the sugar

European shares slipped back from a 10-month closing high on Wednesday, as investors took profits, even as German and U.S. economic data continued to point to recovery.

The pan-European FTSEurofirst 300 <.FTEU3> index of top shares fell 0.5 percent to close at 973.92 points, breaking a four-day winning streak, and having hit its highest close since early October on Tuesday.

The European benchmark index is still up 50.9 percent from its lifetime low of March 9, as investors have become more confident on the prospects of recovery.

“The market has come a long way, and the economics are still supportive,” said Georgina Taylor, equity strategist, Legal & General Investment Management.

“We’re just seeing a little profit taking. Nothing has been derailed. Housing data is improving. The only area of concern is consumer spending.”

Energy companies were the biggest drag on the index, with crude prices down more than 1 percent to just above $71 a barrel,

(Gold is the August contract on the NY Mercantile Exchange. Silver, copper and oil are the September contracts.)

NEW YORK - Wall Street ended modestly lower on Wednesday as the market consolidated recent gains, largely shrugging off a plunge in Chinese shares and weaker-than-expected data from the US factory sector. The Dow Jones Industrial Average shed 26 points, 0.29 per cent, to 9070.72. The Nasdaq composite dipped 7.75 points, 0.39 per cent, to 1967.76 and the broad-market Standard & Poor’s 500 drifted down 4.47 points, or 0.46 per cent, to a close of 975.15.

LONDON - European stock markets, resisting a slide on Wall Street, advanced, drawing strength from corporate earnings results. The London FTSE 100 index gained 18.69, or 0.41 per cent, to close at 4547.53 points.

FRANKFURT - Pharmaceutical group Bayer surged 5.44 per cent to 42.23 euros after reporting results that beat expectations. Despite a third

(Gold is the August contract on the NY Mercantile Exchange. Silver, copper and oil are the September contracts.)

NEW YORK - US stocks finished narrowly mixed on Tuesday as the market’s strong momentum from a hefty two-week rally helped overcome an early wave of profit-taking. Markets reacted to a weaker-than-expected survey on consumer confidence that was mitigated by positive news from the housing sector and generally strong corporate news. The Dow Jones Industrial Average drifted down 11.79 points, or 0.13 per cent, to settle at 9096.72, retreating modestly from a two-week surge of nearly 12 per cent. The Nasdaq composite meanwhile rose 7.62 points, 0.39 per cent, to 1975.51 in a late recovery, while the broad-market Standard & Poor’s 500 index dipped 2.56 points, 0.26 per cent, to settle at 979.62.

LONDON - European stock markets closed with losses, with sentiment dented by profit-taking and a disappointing reading

MORNING MARKET REPORT

Gold is the August contract on the NY Mercantile Exchange. Silver, copper and oil are the September contracts.)

NEW YORK - Wall Street shares drifted to a mostly higher close on Friday as investors mulled disappointing earnings reports. The Dow Jones Industrial Average rose 23.95 points, 0.26 per cent, to finish at 9093.24. The technology-heavy Nasdaq composite dropped 7.64 points, or 0.39 per cent, to 1965.96, snapping a 12-session winning streak. The broad-market Standard & Poor’s 500 index added 2.97 points, or 0.3 per cent, to close at 979.26.

LONDON - European stock exchanges closed narrowly mixed on Friday as a near two-week rally ran into profit-taking ahead of the weekend. In London, the FTSE 100 index of leading shares was up 16.81 points, or 0.4 per cent, at 4576.61 points.

FRANKFURT - The Dax fell 17.92 points, or 0.34 per cent,

European shares were down in afternoon trade today, Wednesday, with banks leading the decline after quarterly results from U.S. banks Morgan Stanley and Wells Fargo disappointed investors.

By 1306 GMT, the pan-European FTSEurofirst 300 <.FTEU3> index of top shares was down 0.4 percent at 884.79 points after trading between 879.97 and 888.23 points.

“Morgan Stanley’s operating loss per share looks on the high side, compared to others in the sector. I think Morgan Stanley’s paying back public aid has distorted results; it is not known if this has been incorporated into analysts’ expectations of the results,” said Heino Ruland, strategist at Ruland Research.

Bank shares took the most off the index after Morgan Stanley reported its third consecutive quarterly loss and Wells Fargo reported rising credit losses.

“The continuing decline in asset quality is a worry, and whilst they are making money in other areas it just goes to show that conditions in the consumer segment