Why the FTSE loves misery

Why the FTSE loves misery - at www.moneyweek.com - the best of the international financial media

Look at the performance of the FTSE over the last few weeks and you'd think that there was no such thing as bad news. When the bombs went off on the London Underground on July 7th the index fell for a bit but changed its mind almost instantly, recovering most of its losses by the end of the day and the rest the day after. And since then it has done practically nothing but rise. Every time we get new evidence that the housing market is continuing to weaken stocks rise. Every time we hear that the retail sector is suffering stocks rise. Note that when M&S announced last week that it had managed its 7th quarter in a row of falling sales, its shares instantly rose. And last Wednesday when we heard that unemployment in the UK (measured by the number of benefit claimants) had risen for the 5th month in a row, the worst run since 1992, what happened? The FTSE ended the day nearly half a percent up. The market seems to be actively welcoming misery be it bombs or collapsing consumption, it is all fuel to the FTSE's fire. It is now up 9% so far this year and 20% from a year ago.

So what's going on? Most market commentators would have you believe that, when it comes to the terrorist attacks (which, by the way, analysts are saying will cost our economy a good £3bn once you've added in their effects on tourism), the market is showing stoicism' and defiance.' And that when it comes to the economy investors are simply confident.'

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.