A while ago someone asked why there is so much data about the US markets and so much less about UK markets. So I thought I’d create some.
It is a fact that in America trade volumes on all US markets has fallen dramatically. There have been net outflows of money for 20 of the last 20 weeks. Basically the broad market of retail and smaller traders has left. The market rally is NOT an expression of ‘market sentiment’ or ‘confidence’. Simply because there is no market there. What there is, is a few HFT traders and a dwindling number of others trying to pick up scraps while not getting trodden on.
In other words, prices are going up but only because a few people are merrily trading them back and forth. “Would you like some shares. Well, yes I would. What are they worth? Just a little bit more than when I bought them from you. How wonderful that the price is going up. Must be a good buy. I’ll have some.”
So here are the trade volume figures for the FTSE 100 for the last four years. You can see there is a regular yearly pattern. But you can also see that every year of the last four each year has been lower volume than the last. This year we are now trading on only 50% of the volume. The other half has GONE. Where to? Haven’t dome the figures yet but my guess is either under the bed or currency speculation.
Whose recovery exactly? Where? You tell me.
The figures are from the FTSE.
Hi golemXIV,
Still enjoying your blog very much.
Saw this quote on bbc today in the article 'UK banking sector grows at fastest rate since 2007 and thought of what you have been pointing out for months (if not years):
http://www.bbc.co.uk/news/business-11414386
the quote is at the end from Andrew Gray at PWC.
"While the banks are broadly in good shape, business is still constrained by the economic environment."
It seems a bizzare way of looking at things that the banks are 'growing' fast but constrained by the 'economic environment'!
John
Hello john,
thanks for the link. It seems to confirm almost exactly what I was arguing in"Our New Reality" just a day or so ago.
Thanks Golem. Obviously a downward trend which doesn't look like it will be changing direction anytime soon. Where do you get your figures from?
Hello Sleeper,
FTSE figures from Yahoo finance.