Yesterday I wrote Downgrade. What downgrade? As I questioned whether the UK losing its AAA rating would have much effect on either stock markets or exchange rates. It didn’t.
In fact, trading in the UK was positive. When the US markets opened, that optimism moved into early trading there too. Early reports from the Italian elections indicated a Centre Left Govt possibly supported by Monti’s party. The markets were happy. Then, a few minutes before the US closed, the truth dawned. The Italian election was inconclusive and there was every possibility that the Eurozone crisis would erupt again.
I thought the Radio4 Today programme summed it up well describing the votes which had gone to comedian Beppe Grillo’s party. “It was as if Eddie Izzard had last year decided to form a party in the UK and had won 25% of the votes”. On top of that Silvio Berlusconi had done remarkably well considering…. Italy clearly rejected austerity and, as The Telegraph headlined, “Eurozone debt crisis strategy in chaos”.
The FTSE 100 has opened down 1.4%. But, to put that in context, that just means it lost yesterday’s gains and is back to Friday’s close. But my tech stock screen, for the UK and US, is a sea of red.