Stock Markets Up Down Up Down

Stock Markets Up Down Up Down.

Following is a issuing a green traffic light investment alert to invest in the UK and US stock markets on Monday we have seen a week of turmoil as the Chinese government looks to prop up its economy with various measures such as currency devaluation and the state pension being allowed to invest up to 30% of its $1.3 trillion fund in the Chinese stock market.

Seemingly every day, markets across the globe have acted like a "yo-yo".  We issued a green alert because economic indicators in both the UK and the US are strong.  US employment figures are up, oil prices are down which bodes well for the profits of Western companies and many commentators including the Confederation of British Industry (CBI) has revised upwards UK growth expectations.  In addition, there have been strong underlying tones from the US Federal reserve that they made the stone interest rate rises that were expected in the autumn.  This again is good for companies and therefore profits and stock market prices.

If you took head of our alert and switched from cash park to UK and US markets on Monday, Tuesday or Wednesday you will have benefited from the upswing.

Since their Monday/Tuesday lows,

• The UK FTSE 100 has seen an upswing of 7% (Europe has seen similar rises)
• The US Dow Jones has seen an upswing of 6.25%
• The Chinese Shanghai Composite has seen an upswing of 12.45% with Japan up 7.3% and Hong Kong up 3%.

Hong Kong fell on Friday as did the US, India and Germany.  As we suggested on Monday, our green investment alert was for higher risk investment and there are still many unresolved issues not just in China but also the Greek crisis is still in the back of our minds.  We are therefore still neutral i.e.  at Amber for most markets although we are happy to have bought back into UK and US stock markets at their one-year low.