Not seen since mid-2002, the FTSE 100 index pushed through the 4,500 barrier on its first day trading for 2004. Whilst banking, pharmaceutical and oil stocks made headway, retail stocks fell backwards, apparently because of slow sales fears.
Our View
We don’t know where the ‘slow sales fears’ have come from! Everyone seems to be spending in the January sales, especially on their plastic. The Government seems, yet again, to be trying to cool the economy by introducing speculation over house price slumps and poor consumer spending. This is how it all started last time and we ended up with negative equity! Be warned but not scared into it! The FTSE is doing well, consumer confidence is up and so are house prices.
Just understand the implications of what you are doing and bear in mind the Government’s need to cool the economy.