Financial Gossip

European indices have started the week in a buoyant mood, as some of the major banks have released extremely healthy profit numbers. A far cry from profit expectations in this sector 18 months ago, but if you were able to continue to lend at 5% + and borrow at fractions of 1%, you would be doing quite well also.

Still, these results are a sufficient catalyst to take the equity markets even higher. And with mid summer looming, these equity markets could continue to rally for the next 4-6 weeks. In fact some of our high net worth clients are expecting another 5% or more on the FTSE 100 Index, before reality checks start creeping in sometime in the autumn.’

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It is said that good news often comes in threes, and there is one plc and CEO that certainly need it; namely BP and Tony Hayward. Firstly, it is possible two American oil giants, one being Exxon and the other maybe Chevron, are queuing up to buy the company, lock stock and barrel ! Secondly, the British oil plc has started refitting a new larger cap, which is hoped to stem the lethal flow of oil, still gushing into the Gulf of Mexico and onto the neighbouring shores. This is a one step back and two huge leaps forward scenario (hopefully) as the existing cap will be first removed, creating unhindered flow, while preparations are made to fit the new cap, which is hoped to completely stop the leak.

And finally for the chartists; the share price has popped its head above a trendline which has shown resistance since the price commenced its fall in April of this year, when disaster struck.

This trio of good news should provide the BP share price with some underpinning as fresh buyers and take-over speculators returning to the market. Even though the share price is 20% off its lows, it is still 44% off its highs; partly justified by the liabilities and compensation payments, but still leaving room for some decent upside…

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