Why a budget surplus is bad news
Article Abstract:
The United Kingdom could achieve a budget surplus for 1999 to 2000, but budget surpluses have been associated with a poor performance for stocks. Surpluses tend to occur when the economy is nearing full capacity and supply bottlenecks are affecting profits and output and creating inflationary pressures. Deficits tend to occur when inflation is growing and there is more potential for earnings growth. Budget surpluses do not cause a drop in stock prices, but factors leading to surpluses also tend to lead to drops in stock prices.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1997
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UK equities: loud and clear
Article Abstract:
UK share prices have been affected by events in the US in Mar 1996, with volatile US shares prices followed by similar trends in the UK. There is also concern that UK interest rates may rise, due to the performance of short sterling futures. Bonds and equities as a whole may suffer, but certain types of stock are likely to perform better than others. Cyclical stocks and shares in companies geared to the domestic market are most likely to do well.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1996
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Buoyed up
Article Abstract:
The UK stock market has been boosted by takeover activity in addition to expectations that interest rates may fall. Opinion is divded as to whether share prices are overvalued. The market has been boosted due to a lack of new share issues. An interest rate cut late in 1995 would help boost share prices further. Some interim corporate results have been disappointing, and a slowdown in economic growth is likely to affect corporate profits.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1995
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