What's behind the Footsie's rise?

Article Abstract:

The Financial Times Stock Exchange Index 100 index (FTSE) has risen since early Oct 1998, partly due to the large amount of cash held by pension funds, as well as a drop in the equity risk premium. Some analysts forecast a rise in earnings of 12% for 1999, but few economists agree with this forecast. Earnings downgrades could affect stock prices, as could a drop in the value of the US dollar. The equity risk premium could also be affected by a hedge fund collapse or instability among emerging market currencies.

United Kingdom, Financial Times Stock Exchange 100 Index (Index)

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Wall Street's valuation debate

Article Abstract:

There is a debate on whether US equities are overvalued, and one measure, the earnings per stock forecast for 2000 divided by the long-bond yield does indicate that stocks are overvalued. Another model, the constant growth model, does not show stocks to be overvalued by as much. Estimates of the growth rate and risk premium vary, and so too do opinions on whether stocks are overvalued. Equities are valued in terms of the future, which is difficult to predict.

Economic aspects, Wall Street

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UK market hopes for reversal of fortunes

Article Abstract:

Economists believe that the UK stockmarket will revive from the present downturn. Benchmarks which indicate that the market may be cheap include the low ratio of bond yields to earnings yields.

Prices and rates, Stocks, Stock prices

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