When the economy doesn't matter

Article Abstract:

The United Kingdom economy is undergoing a recovery and growth of 3.2% could be achieved in 2000. This will not necessarily benefit stocks, and this even applies to cyclical stocks. Long term growth is important, and investors may be concerned about a slowdown in the future, when a boom is in progress. Strong growth may also mean that investors accept risk more easily, and accept lower returns on stocks. Investors have to assess whether future earnings growth is includes in stock prices, and this related to valuations and is not an issue of macroeconomics.

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UK sectors: place your bets

Article Abstract:

The share performance of different UK sectors varied in 1995. Sectors which performed better than average include pharmaceuticals, life insurance companies and banks. Gas distribution and papers and packaging performed poorly. Goldman Sachs foresees similar trends in 1st half 1996, since the UK economy is expected to be weak in this period. BZW argues that there should be a recovery in growth in 1996, and cyclical stocks such as building materials could offer opportunities, while banks would be affected if real rates of interest rise.

United Kingdom

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Profit problems

Article Abstract:

Trends affecting corporate profits and US stock prices are examined in detail. The impact of investment on business cycles, and cycles on stock prices are also assessed.

Profits, Corporate profits

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