Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
Just now had a property expert discussing mortgages - he was saying that the fixed rate offers are already starting to come down and, given a few weeks for the impact of the energy support package to filter through, rates will start falling further as it is expected inflation will drop by around 4-6%. As I mentioned here yesterday, the cost of wholesale gas has dropped two thirds from its peak in August and that should also filter through to inflation and therefore consumer confidence.
I find it bizarre that yesterday the "good news" of the cost of wholesale gas coming down by so much was drowned out by the hysteria around the rising mortgage rates which is only going to be a temporary phenomenon but yet again all we seem to do as a country in the MSM is focus/concentrate on the negatives/fear factors.
I can't remember what news channel it was on yesterday, but a lady who runs a wool/yarn shop was interviewed about Liz Truss' speech at the Conservative conference - she did actually say that business has started to improve since the rescue package was announced, so hopefully once all this fear subsides and consumer confidence starts coming back, then an upward trend in the share price can return - all in my opinion obviously.
Pearls - Believe it or not I am on planet earth unlike some of the scare mongering around here - an economist on Sky News earlier was saying how the reduction in wholesale gas prices is going to reduce inflation and then feed into interest rates - personally I think we are near peak fear - the market is forward looking by about six months and if it does come to pass that inflation has peaked (and nowhere did I say inflation was ending) then the consumer should start feeling a bit more confident that their mortgages aren't going to go up by ridiculous amounts - as a country/economy we can't afford to go back to the 80's/90's where people were handing back the keys to their properties.
As with everything - its only time will tell whether we are there or there abouts with the fear.
Yes you're right but we are in a totally different environment these days so you can't look back at the days where base rate went from 13% to 15% in a day - people are more heavily borrowed now than they were back then and whilst I agree the rate is unlikely to go back down to those sorts of levels for quite some time as they were false, I do see that they will come down so that people can get fixed rate mortgages around the 3-4% rate going forward - the economy can't afford for them to go any higher.
Have reduced from a peak of around £7.88 in August to £2.62 (ish) today - that's a hell of a drop but it just goes to show the impact the hedge funds have had in pumping the price up and how quickly its gone down since they started bailing. That aside, the feeling is inflation may have already peaked which will filter into the economy and remove the need for significantly higher interest rates which will filter through to the consumer.
In addition, data out of the States yesterday and today is leading to some analysts suggesting that the next expected interest rate rise in the States is likely to be the last as the effects of the increasing rates are starting to damage the real economy over there - new mortgage approvals were significantly down last month probably due to the higher interest rates.
Hopefully we will be turning the corner.
Have reduced from their peak in August of £7.88 per therm to £2.62 per therm today (there or there abouts) - funny how the gas prices have been coming down since the hedge funds started bailing out of the trade. That aside, if this continues the feeling is that inflation will have peaked and that will remove the need for interest rates to rise much further and will have an impact on the mortgage rates coming back down which will filter back into the consumer in time for Xmas.
In addition, data out of the States yesterday and today are leading analysts to think that the next hike rate in the States is likely to be the last before they start reducing again because of the impact the rising rates are starting to have on the economy - I think new mortgage lending was down quite a lot from data released earlier.
Pokerchips - to me its no coincidence that the Nord Stream supply pipe has been attacked once all countries that had previously relied on Russia for their energy supplies had secured sufficient for their needs for the winter - to me I would be surprised if Russia did actually damage the pipeline as it was a good way for Putin to keep holding other countries to ransom and "play god" with will I supply them or won't I - this way he can no longer threaten about the supply chain, his income stream will have been severely curtailed as a result so there's more pressure on him in respect of funding the war, and maybe the impact of the war will now start to be felt by the Russians and not the rest of the world - perhaps this is the turning point as there seems to be more unrest in Russia about the conflict - China and India have stayed on the fence in respect of the war so far but they have both made it clear that they want a negotiated settlement - the way its going now it may actually see the end of Putin and whilst he can threaten nuclear weapons all he likes, he will just end up obliterating Russia if he even launched one tactical nuclear missile.
I think the Ukraine/Russia situation has obviously destabilised everything - what was ticking along nicely was thrown into disarray, but as countries have worked together to find solutions then hopefully everything will in some respects "go back to normal" including gas prices because as you say there has been some speculation driving up the prices as there nearly always is in a crisis.
Finally, whilst it is good that the Government have "stepped in" to help with the rising energy costs, to my mind tax should go up by 1% in the short term until these costs have been covered. I understand what you're saying about future generations paying for things, but to me its no different to people up until recently still paying for debts incurred from WW2.
I know some of my thoughts may be "way off" but as with everything, its only as things unravel do we see what has happened and with this game - ie the stock market - it pays to try and be aware of the ifs, buts and maybe's as that does impact the value of your portfolio.
Pokerchips - I understand everything that you're saying, the point I was making about the bear market ending is that Bloomberg have gone over past history of how long bear markets "on average" tend to last and its something like 289 days or something like that so they've calculated 19 October as the "magic" date - I have mentioned it previously, and from the research that I'm doing, the "feeling" is that inflation has/or is about to peak which will stop the need for further large rate rises. In addition, "apparently" bear markets end as recessions start so that may be another indicator.
In respect of the energy crisis - I was referring to the impact it has on the consumer - people know that they're being supported by the Government now with the energy price guarantee - admittedly they've misled with saying about the price cap, but its up to each individual to monitor their usage to bring their costs down.
If, as is expected by some, the energy price guarantee does impact on inflation in a positive way, then again, interest rates will not need to rise so high, and to be honest, the Government can't afford for mortgage interest rates to rise significantly as that will take us back to the late 80's/early 90's with people handing the keys of their properties back to the lenders and that will have a dramatic impact on dragging everything down. In fact, there's an article in the press today saying that there has been scaremongering in respect of mortgage rates and again the point I was making there is how this impacts consumer confidence.
My own feeling is that we are where we are now because of the inept actions of the Government - we had a protracted leadership race when we didn't need one the impact of which has meant that consumer confidence dropped off a cliff (especially during August) because nothing was being done about the energy crisis, then when the Government did decide to finally do something, any positive impact that this could have had was immediately destroyed by the tax cuts they were proposing, and the scare mongering that followed in respect of rising mortgage rates has further impacted confidence. The point I was trying to get across is that once all this fear subsides, consumer confidence should return, and as the markets are supposed to be forward looking, then I expect to see the constant declines in share prices come to an end.
Don't get me wrong, I'm not expecting the share price to return to its previous highs (not for a long time anyway), but I do expect more positive momentum going forward and that's the point I was making about looking back at the opportunity we have now - only my opinion obviously.
Thanks for that info Pokerchips - is it today and tomorrow the Fed meeting?
Just as a side note, Bloomberg have said that the current bear market will end on the 19 October so it will be interesting to see if the markets do start to turn around now - my own view is that with the energy crisis now sorted, and hopefully the hysteria about mortgage rates fading in the background - especially if, as expected, inflation does drop to 5%, then consumer confidence will return and hopefully we can all look back at these prices as such an opportunity.
Well said ryan - I've just blocked claire as she's doing my head in - to be honest she has been since the share price dropped from £50 to £40 to £30 telling people how much of a buy the shares were - better for my blood pressure!
Nevergonnaretire - I'm with you on the people who keep spouting about takeover possibilities - its repetitive, boring and irrational thinking - if you look at other companies like THG, BOO, SDRY, and any other retailer (or company whose share price has been battered) there's people spouting the same rubbish about takeovers.
What an interesting week that it's been - peak fear in the press about interest rates, energy costs etc with a totally inept Government claiming "they had to act quickly" to get things moving and trying to blame the volatility and reaction in the markets to the rescue package for the energy which was already known rather than the idiotic plan of cutting taxes.
I'm not sure but I have a feeling the Government are trying to delay publishing any results of an OBR report until late November so that they can see the impact of the energy bail out is having on the economy and inflation specifically. If they had not had such a protracted leadership contest and sorted it within weeks, business everywhere would not have fallen off a cliff in August - it's going to take time for consumers to feel confident again about the future especially when there's so much fear mongering going on about interest/mortgage rates - I witnessed during the 30 years I was in banking people handing in the keys to their houses because mortgage rates shot up and people were dragged into negative equity so could no longer afford the property they were in, and the impact the financial crisis had on people - there is no way in this world that interest rates are going to go back up to the stupid levels that are being quoted in the press because people will just not be able to afford the mortgages - not just in this country but worldwide. Once all of this nonsense calms down people will start looking to Xmas - Next update wasn't bad and they were just hammered down because of their honest assessment regarding the uncertainty but on a positive they said that costs had come down and the pound has recovered against the dollar now which is also useful.
I find it strange that we have all doom and gloom here but are experiencing the same sort of issues with energy as countries such as France but their prices have only gone up 4% - perhaps the Government need to look at what other countries are doing to keep their economies going because what we're doing here doesn't seem to be helpful at all.
Simon, if you don't mind me saying, why don't you just trade what I call the "obvious" opportunities and increase your holding that way rather than add more capital - ie sell on massive rises (when they start happening) and buy back in more with the same capital - that's what I do to increase my holdings - cash preservation is king for me really.
I've just checked the date that Bloomberg have calculated the end of the bear market which is 19/10 - apparently on average bear markets last for 289 days (obviously that's based on US markets the only one in the world!) which coincidentally is just after inflation figures come out here and in the States.
It will take time for the reduction in oil and gas prices to filter through, but it will - that combined with the energy cap should (according to some economists) bring inflation crashing down to 5%. If they are right - which personally I think they are - then ridiculous wage demands can no longer be justified and further increases in interest rates not required - all of that is going to bode well for the markets and a lot of the reasons the share prices have been hammered over the last few months in respect of lack of consumer confidence, supply chain issues, blah, blah, blah will be gone. If you look at the share chart its taken 3 months to drop from £15 to £6 so realistically, and that's where I came up with my figure by Xmas, then we should be looking at £15 (say I fingers crossed).
I can't see anything getting worse and I can't see Boo's update this week being any different to any other company that's been reporting figures - August trade dropped off a cliff, so I would expect by the beginning of October companies will be starting to say that trade has improved markedly since the lows of August.
May have peaked last month - the next figures out are around 13/10 and if as I suspect that is the case we may start to see a long upward trend start generally in the markets. Looking at the cost of oil and gas over the past month, they both seem to have dropped by over 20% and whilst I appreciate the weaker pound may have an impact, these declines surely will have an impact. The other thing is the energy cap - if the press stop with all this doom and gloom, confidence can return to the consumer and life can get back to normal.
Dropped by 6% yesterday apparently - funny how the prices have been dropping at the same time that hedge funds have said they are exiting the gas/oil sector - it's probably their fault that the gas prices rose so much! If that is the case though, the good news is that inflation will start to fall so perhaps the hedge funds will start buying back into UK plc as its been so badly beaten up - maybe today is capitulation point - only time will tell.
Valueplay - I understand why the share price is down given the most recent update and the uncertain outlook because of the cost of living crisis, and OCDO are no different to many other companies providing updates at this time saying that business fell off a cliff in August because people were uncertain on what was going to be happening, but to my mind there is no way the share price should be where it is now - the shorters have taken full advantage over the last couple of months while there's been no Government steering SS GB and the uncertainty with energy prices - Putins actions this morning hasn't helped either.
I know that Directors of any company who have day to access to price sensitive information have a "closed period" and are not allowed to trade in their company shares, but I wasn't sure about non executive Directors as they maybe are not so involved with the day to day operations of a business so that's why I asked the question. Let's be honest though how many times have people traded in shares in various companies with "inside information" - both ways in buying and selling.
China coming out and condemning Putin's actions may help, as will the cap on energy prices and as the market is supposed to be forward looking I was expecting the markets to start making a turn now based on how things should start improving for people/companies.
It will be interesting to see how things pan out over the next couple of months with the Governments interventions starting to take effect - hopefully consumer confidence will start to return, as will business confidence, and if some of the economists are right about inflation being brought down significantly because of the Government actions, then the fear of rising interest rates will ease as well and we can all start getting on with our lives.
Let's hope that China continue to put pressure on Putin to back down and for the Ukraine situation to be resolved.
Has certainly been hammered recently - I wonder if its been driven down deliberately to allow those in the know to get in cheap - maybe a new contract is in the offing. Would a non-executive Director be able to buy if that was the case?