Concerning the FTSE100, what are the main contributory factors at play in the setting of targets..?

Question

During the last month, market seems to be moving contrarily to the direction of set targets....

I realise economics, productivity,federal reviews of interest rates, inflation, news reports of sector performances,etc determine market progress. Daily fluctuations of circa 50-100 points, are the nature of the beast, flucs moving in iether direction. Banking crisis has increased volatility, with sensationalist news creating an air of mistrust in banks, who are the market leaders. Chart analysis depicts trend based on many factors incl aforementioned. Adequate funds ensure absorption of impact of extreme drops as seen in the past quarter, those who lose heart, literally lose, or are stopped out ...blah blah...?

Answer 1

the ftse automatically follows what the us markets are doing as measured by the dow and the s+p 500. the us markets are huge and they set the trend for all world stock markets.compare ftse and the dow on the yahoo finance charts, for different timeframes. there is an overwhelming correlation.the problem for the ftse is that they open 6 hrs before the us opens, although there is a small 1 hr overlap.the key indicators to look for are what the dow did after the ftse closed the previous nite,and most importantly,what the premarket us futures are doing when the ftse is trading.look for the dow futures at cbot and s+p futures at the cme websites.any strong premarket us move will set the trend for all euro markets including the ftse.forget the doubletalk by the brokers.to quote an old financial adage"when the us sneezes, the rest of us catch colds"

Answer 2

Basically, the main factor which affects targets for the indices such as the FTSE 100 is time value, i.e.

If interest rates are 5%

then the FTSE 100 in 1 years time should be at least 5% higher.

Once this has been applied any market premium or discount also needs to be taken into account, based, as previously mentioned, albeit quite crudely, on the individuals assesment of the market over the timeframe.

There are a number of complex methods for calculating expected return which are often used but generally it is interest rates + any market premium (if they think the market is moving upwards) or - a market discount (if they think the market is moving down)

The market will always move contrary to these targets in the short term, as you say, this is the nature of the beast. Particularly at the moment there is a lot of uncertainty in the market, causing huge volatility.

Answer 3

"Targets" are numbers plucked out of the air by brokerage "research" departments who have to come up with something to justify their enormous salaries ..

You would do better to let a blind monkey choose what stocks to invest in :-)

"In reality, over short time frames, a monkey and a dartboard have about a 50-50 chance of beating Cramer's (a US investment "guru") stock recommendations."

You want to invest, choose an Index Tracker (it will do BETTER than MORE THAN HALF of the 'Managed' funds ... )

Answer 4

Only the ones setting those "targets" can answer that.

Better to ask, "Are these contributory factors applicable?"

Answer 5

Credit squeeze,Interest rates, property prices, retail confidence, manufacturing, raw material prices,employment, recession??

Somewhere in there -inflation.

Answer 6

among other factors mentioned in this section,world indices are also playing its part.If major indices are up,like us30 ftse100 will folow.