Key Events in September & October for the FTSE-100

As readers of our regular weekly updates will know we are keen on history, and stock market history can provide some interesting insights. Sometimes the significance of an event does not register with us until after when with hindsight is remembered as a major inflexion point or change that precipitated market declines. 

Whilst equity markets in 2001 were already in a down trend as the "tech bubble" burst the accounting scandal that broke in October regarding Enron is remembered by many and associated with the declines that led to the market low of 2002. 

In 2008 the Financial Crisis was at its peak with the report that Lehmman Brothers had collapsed and there followed a savage decline in the FTSE-100. 

Now we are not suggesting any form wrong doing but the recent Tesco Accounting Errors could ultimately be remembered in the same way, after all market conditions are similar: - 

• Strong 4-5 year growth in the FTSE 100 as it reaches towards 7000

• Equity euphoria built on an underlying bubble - 2000 Tech Bubble, 2007 Housing Market & Mortgage Backed Securities and 2014 Quantitative Easing

• General perception that equity markets can only go upwards - euphoria 

• Just for good measure each event happened in early Autumn (Sep & Oct) 

Here is a graph below to show you the similarities 

As we always say never rely on one indicator alone but events such as these means investors should at least be on their guard.