The dog days of summer

These trends were swiftly reversed, though, with the Footsie handing back gains in a single trading session. But none of the movements were that dramatic and it really feels as though summer has settled in and investors are more concerned over where to take their families for the holidays than in establishing any firm direction for the market.

We will, of course, be seeing first half results from a range of companies that operate to a calendar year end over coming weeks, along with second quarter economic statistics as we progress into high summer. How this fresh information will affect marker sentiment is anybody’s guess, though given the continuing concerns over how we might fare post Brexit, investors appear to remain remarkably sanguine.

There have been a number of trading updates, such as Marks & Spencer and builder Galliford Try, which produced sharply contrasting reactions in their share prices reinforcing the point that nothing is certain in the investment world. M&S disappointed – Galliford Try encouraged. But it wasn’t as simple as retail wrong, building right, as the surprise announcement from Carillion bore witness.

Carillion’s share price has suffered particularly badly in the wake of the resignation of the chief executive and some sobering detail on the state of current trading. Listed in the second tier FTSE 250 Share Index, the collapse in the value of this not inconsiderable company will have added to the underperformance of this index when compared with the Footsie 100.

It is the international nature of our index of Britain’s largest companies that is helping its performance. A weak pound translates into bet ter profits for businesses earning the bulk of their income from overseas. This is certainly the case for mining companies, which have helped buoy this index recently. It seems that, just as doubts over the likely strength of our economic situation after leaving the EU are growing, the rest of the world is beginning to express greater confidence in the future.

But market moves in the summer should not be taken too seriously. There is little depth to trading and many movers and shakers will be on bucket and spade duty, rather than trying to second guess future trends. Our Brexit negotiations will continue to occupy centre stage in many people’s minds, even though it will be some time before we have any real clue over what is likely to happen. Best to sit back and enjoy the sunshine, in my view.