Outlook: Markets await return of the pros
Saturday 29 August 1998
They were see-sawing all over the place yesterday. The backdrop is Russia and the Far East, but the cue comes from Wall Street. As the Dow opened, the story was that Alan Greenspan would be riding to the rescue, all the way from Jackson Hole in the Rockies where he was chairing the Fed's yearly meeting of central bankers, academics and financial pundits.
Why anyone thought something positive might come out of this annual talking shop is a bit of a mystery, but there was a coordinated cut in interest rates around the world to deal with the 1987 crash, so why not this time round, too? Fat chance.
Mr Greenspan wittered on about "disciplined monetary policies", stable prices and sustainable growth as if oblivious to the carnage around him. He thought Wall Street too high when it was worth a quarter less than it is now, so why should he want to act anyway?
If things carry on the way they are, the prophecy of a US interest rate cut may yet become self fulfilling, despite Mr Greenspan's reluctance. But nobody is going to judge this a fully fledged bear market until the fund managers return from holiday next week. The most curious thing about the present downswing is that it has been against the backdrop of very little selling. While the boss has been away, the number twos have been under strict instructions to do nothing precipitous.
The pros will be back next week to survey the damage and, as likely as not, they'll take the view that it's too late to sell now. More difficult to call is whether they'll start buying again. With incendiary devices popping up unexpectedly all over the developing world, it's a brave man who does. Most will wait for the waters to clear.
In pictures: Saturn images from Cassini probe as it prepares to turn lens towards Earth
New banker bonus boom: Payouts leapt 64% to new record when Chancellor George Osborne cut top-rate tax to 45p in April
'There's something quite unpleasant going on': Nigel Farage confronted for second time on visit to Scotland ahead of Donside by-election
Poor children are being let down by schools, warns Ofsted
World news in pictures
- 1 ‘Hello, NME? I’d like to complain about your Tom Odell review. Why? I’m his dad’
- 4 Vast methane 'plumes' seen in Arctic ocean as sea ice retreats
- 5 From charmer to bully: My encounter with Charles Saatchi
iJobs Money & Business
Excellent Salary: Austen Lloyd: We have a very exciting opportunity with a maj...
£500 - £600 per day: Orgtel: FX Options Front Office Java / C# Developer - Ba...
£600 - £700 per day: Orgtel: Project Manager - Front Office - Regulatory IT C...
£600 - £750 per day: Orgtel: FATCA Project Manager - Banking - London - £600-...