A Big Ball of Bad News this Week

A ball of bad news seems to have developed over the market this week. It had been slowly growing as concerns began to emerge that the Greek economy is in serious brown human waste.  From what i read it sounds like a superhuman or super nation effort is going to be needed to get out of this one. One article was saying the collapse of the Euro in Greece will make lehman brotheres losses look like a drop in the ocean. Now the inception of the Euro was based on great values and aspirations of the whole of Europe working together for a common good. But this seems to be coming apart at the seams as Greece, Portugal and Spain seem to be sinking. Solutions to the Greek crisis have been for Greece to bow out gracefully from the Euro but this would create more turmoil as its currency would continue to weaken against the euro and it would then have no chance of paying back its loans that are in Euros.

I'ts been a rough week this week with the FTSE 100 taking a battering of around 9% from its high (5538.07) on the 11th of Janruary. All you have to do is look at the slashing of broker recommendations to see that there is going to be no rays of hope for some time yet. No matter how well a company is performing ultimatly it is still tied to some degree to the market so a drop in the market will usually always be carried over into the share price.   My recommendaiton would be to wait out for the time being to see what is going to happen over the next month or so.  The trick will be timing the market and getting in when the market begins its turn around.  There cold be some real bargains out there if you time the bottom as many of the blue chip companies are looking very attractive at the moment.  Companies such as Rio, BHP, BP and BG group all look good.

Now ive written before about BG group and this week they posted a trading update. This is a classic example of a company following a market trend. Despite outlining that they would expected a decade of growth between 6 to 8 percent, its share price fell on it's announcment that profits were down this quarter by 38%. This caused a shedding of 37p on the share price.

Ill keep updating the recommendations and comments but for the time being i'd stick to solid companies that supply services or products people can't live without.





 

Brokers Recommendations

Company	Old Target (current price)	New Target	Broker (s)
BP	680p (560p)	660p (reduced)	Citigroup
Cairne Energy	344p (321p)	400p	Panmure Gordon
Admiral	1129p	1339p	UBS

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