S&P heads for best month since 1974.

31st October 2011

Ian Copelin, Investment Director, my wealth, comments “Although US futures imply a weaker start to trading today, the US market has had four straight weekly advances and as a result, the S&P 500 Index is poised for the biggest monthly rally since October 1974 (when it rose 16.3%).

The index advanced 3.78% last week and has climbed 13.58% so far this month.

Elsewhere, Japan intervened to weaken the yen for the third time this year and pledged more sales after the currency’s gain threatened its recovery from the earthquake and nuclear disaster earlier this year.

The Japanese Finance Minister Jun Azumi said the move was carried out to combat “one-sided speculative moves that don’t reflect the economic fundamentals of our economy.”

The yen has weakened around 4% this morning.

There was growing frustration among Japanese exporters amid the strengthening exchange rate coupled with the recent flooding in Thailand that has impaired production.  For example, Honda, Japan’s third-largest carmaker, today reported second-quarter profits that missed analysts’ estimates and withdrew its forecasts for this year as the strength of the yen is eroding the value of overseas sales and the flooding in Thailand has crippled its production in Southeast Asia.  Honda made more than 170,000 cars in Thailand last year – the flooding in Thailand has affected 80% of Thailand’s 77 provinces since July.”