Even in the context of the extended macroeconomic turmoil the world has had to endure for the past few years the equity markets have been a roller-coaster recently.
Last week all our stocks were up as investors apparently decided things weren't as bad as they feared. However we said we wouldn't be surprised to see a Newtonian recoil this week, and that's exactly what we got.
The strongest specific reason for this reversal of investor sentiment seems to have been the decision by the Fed not to embark on a third round of quantitative easing (QE3), and opt for some much milder repackaging of debt, which is being called Operation Twist.
But the broader underlying reason for the fall was, once more, European sovereign debt. The latest cunning plan for resolving the situation seems to have been urged upon Europe by US Treasury Secretary Tim Geithner, which involves massively enlarging the EU bail-out fund, in order to provide support for banks when Greece defaults, as is surely inevitable.
Among our stocks only two - Apple and Intel - survived the carnage up on the week, with investors seeing them as relatively safe bets. AMD fared especially badly, thanks in part to the loss of their product head. Nokia didn't seem to do anything specific to warrant its fall and, with its Windows handset launch surely not far away now, may represent a risk worth taking.
|Company||Listing||Share price 5/9/11||Share price 12/9/11||Share price 19/9/11||Share price 26/9/11||7-day change||Market cap (bn)|