Shaking Your Guilt – MoneyWeek

***NochangeforOPECtheyearsbiggesttakeoverexpectmoreupswingfromtheoilpriceandmuchmore?

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–MemberstatesoftheEUareallfacingpressinglong-termeconomiccrises。

Sowhatseemstobetheproblemthistime?

nbsp–Well,accordingtoareportreleasedbyBrusselsjustbeforetheweekend,increasingpensionliabilitiesandhighlevelsofdebtandlackofprogressondeficitswillscupperthesustainabilityoftheregionspublicfinances。

Whatsmore,memberstateshaveshirkedallfeelingofculpability

–EUrulesdemandthatmembersdeficitsmaynotbeat3%oftheirgrossdomesticproduct,whiledebtmaynotsurpass60%ofGDP。

NotthattheEUcouldcareupto9membershavealreadydisregardedtheseBrussels-regulations。

Themainculprits:Germany,France,ItalyandPortugal。

–AndtheresultoftheEUsdisinterest?

Well,oneoftheLisbongoals–wheretheEUaimstosurpasstheUnitedStateseconomicallyby2010–seemsaratherlaughableaspiration。

–Mindyou,Americaitselfhasjustsufferedabitofalag。

ThecountrysGDPfelltoaweaker-thanexpected3。

1%annualpaceinquarterfourof2004。

Thisistheslowestlevelsincethebeginningof2003–andfallswellbelowpunditpredictionsof3。

5%。

–InflationforonemustbeaslightconcernfortheFederalReserve。

Thepriceindexshowingpersonalspendingwithoutfoodandenergycosts,surged1。

6%inthefourthquarter–closetodoublethe0。

9%gainregisteredinquarterthree。

–ThentheresAmericasdrabtradefigures–whichsawa7%fallintheannualrateofgoodsexportsinthefinalquarter。

Thethirdquarter,ontheotherhand,snaggedanear10%increase。

–Itshowstheeconomyhasreturnedtothelong-termtrendgrowthrateof3。

1%,theaverageoverthelastseveraldecades,ashigherinterestratesandhigherenergypriceshaveanimpact,BankofNewYorksMichaelWoolfolksaidonFriday。

–Infact,neithertheEUnorAmericaseemsthebestinvestmentopportunityfacingtheaveragefortuneseeker。

Buttheresanewbuddingkidontheblock

–SouthAfricahasbeengivenasubstantialboostbylastyearscommoditiesboom,wenoteinthelatestMoneyWeek。

Theeconomyismuchimprovedfromacoupleofyearsago,andyield-hungryinvestorsareenjoyingthehighinterestratesinthecountry。

–Moreover,SouthAfricawillremainaninvestor-favouriteforaslongasthecommoditiesboomblossomswhichanalystsreckoncouldlastanotherthreeyears?

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–BackintheCity,thebluechipindexfell21pointsonMonday–butstillmanagedtoclose0。

6%intheblackfortheweek。

Theindextradedat4,832onFriday。

TheFTSE250felllessthan1pointjustbeforetheweekend,tocloseat7,106。

Itaddedjust0。

1%lastweek。

AndtheAllShareindexfell0。

3%onFriday,tocloseat2,430。

–Infact,thesaviourofthebluechipscameintheformofaseriesofbidrumours。

FundgroupAmvescapshotup5%ongossipthatFrenchbankSocieteGeneraleareonthevergeoflaunchingabidforthefirm。

Amvescapadded14ptotradeat328p。

–Meanwhile,consumergoodsmakerReckittBenckiserclosedshortlybehindAmvescapasatopbluechipgainer。

Newsoftheyearsbiggesttakeoversofar–betweenAmericasProcterGambleandshavinggroupGillettefor$57bn–convincedinvestorsthatthegoodsmakercouldbenextinlineforabid。

–Afterall,ReckittshareholdersreckonedthatinorderforAmericanrivalColgate-Palmolivetostayamarketfavourite,itcouldtrytotargettheUKgroup。

Reckittfinished3%upat£15。

82。

–AndlogisticsgroupExel–up3%onFriday–couldbecomeahandsometargetforitsrivalpackagedeliverygroupUPS。

Infact,thegrouphasgainedover6%inthelastsixtradingdays–tohitan11monthhighat785ponFriday。

–Theoilandgassectorfellmorethan1%onaneasingoilprice。

Brentcrudefell2%onFriday,totradeat$45。

10perbarrelbyLondonsclose。

Thereasonbehindthefall?

Well,OPECministersmetyesterdayanddecidednottocuttheirblackgoldproduction。

–Andwhywouldthey?

WhileoilpricesmayhavefallenwellbelowOctobershighof$55perbarrel–pricesarestillhistoricallyhigh。

AndwhatwithIraqselectionresultsdueouttoday–well,nowisundoubtedlynotthetimetoplacemorepressureonoilsupplies。

Notgoodnewsforoilstocks,ofcourse

–BothBPandShellfellintotheredjustbeforetheweekend。

BPshed1%,whileShellfell0。

5%?

–YetinthefaceoftheIraqielections–andalltheuncertaintythatgoeswithit–dontexpecttheoilpricesdowntrendtolasttoolong?

Untiltomorrow?

HeatherDAltoMoneyMornin

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