Liams Last Post : Sentiment rebounds as 'No double dip' becomes the official mantra.

Good Afternoon ,

 

After the recovery in Irish sentiment into the close last night today continued in a much more positive vein. It is hard to think that Ireland inc is front and center stage in terms of driving global market sentiment. The CNBC news team have been in Dublin all day and interviewing all and sundry about Ireland and the Anglo problem and about the prospects of an Irish default. It is a sentiment based question.I don't think that Irland has any intention of defaulting. In the '80's we were in the mire with crippling national debt and we paid our way out of it. I remember way back then that the markets were occasionally spooked by domestic irish commentators who have been calling for a default.  Today the Norwegians decided to announce that they believed that Greece would not default and as Ireland had dramatically taken the step of splitting Anglo yesterday , suddenly the pressure was off and while the noise levels remained high , Ireland saw a rally in  Bank of Ireland and a modest rally in Irish life.  Plenty of volume trading in Bank of Ireland today.

Brian Lenihan was interviewed on RTE and put his best foot forward saying that the AIB funding issue would be finalised in the next few weeks and that they had received substantial bids for their stake in Bank Zachodni.  He also said that Bank of Ireland has come out of difficulty.

 

Moving to the Building materials stocks , CRH bounced around at the eur13 level , the spark of optimism there did not last that long . Grafton and kingspan however did move up +1.5% each with a much clearer story in both cases.

 

The food stocks were better today with Greencore which had been very weak on Monday rallying +4% and Kerry which continues on its US leg of its roadshow +2.3%

 

The cyclicals were back in fashion with a vengeance and as the markets decide today to accept the view that a double dip is unlikely. I was somewhat surprised by the positive reaction to the weak tone in the beige book and the relatively weak assertions from the OECD re the slowdown being temporary.  Against this positive background Smurfit took off again and jumped nearly 2% to eur7.60.

 

Tullow continued to win back nervous investors and it closed at stg12.63 .

 

Total produce was subject of a big trade today as 27m shares crossed.   

 

Wall Street is better on the back of the employment numbers and the deficit being lower than consensus estimates. I am amused that the jobless claims data which beat expectations is based on estimates with California amongst nine states to not file proper data. Truly you have to wonder about the credibility of the data but that is a question for next time when the data gets revised….

 

Have a good evening

 

Liam

 

 

 

 

___________________________________________

Liam Boggan

　

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