The FTSE at 10,000: a missed opportunity for some marketing razzmatazz | Nils Pratley
There are three ways to view the FTSE 100 index hitting 10,000 points for the first time.One is to say round numbers are irrelevant.Since share prices are meant to go up over the long term, an index that was created in 1984 at a starting value of 1,000 was bound to get there eventually.In any case, a pure value-weighted points measure doesn’t capture the dividends paid by component companies, which can add up to a material part of an investor’s return over time if reinvested.Nor is the Footsie guaranteed to stay above 10,000, obviously.
Such “bah humbug” points are all reasonable.A second approach is to make bogus claims about what it means.That was the line taken by Rachel Reeves, the chancellor, who tweeted last Friday: “The FTSE 100 breaking through 10,000 points for the first time is a vote of confidence in Britain’s economy.”If only.In reality, the level of the Footsie says little about the UK economy specifically because the index is stuffed with multinationals who make most of their revenues and earnings abroad – in aggregate, the tally is about 75%.
Last year’s best performer (up more than fivefold) was Fresnillo, a silver miner out of Mexico that enjoyed the boom in precious metal prices rather than any warm breezes out of the UK.A third way is to acknowledge the basic insignificance of 10,000, plus the skewed makeup of the membership (overweight banks and miners, and underweight tech), but still take the opportunity to indulge in some marketing razzmatazz.The aim: to make the essential point that shares have historically comfortably outperformed cash over medium- and long-term horizons.This, you would have thought, would be a gimme for Reeves and the London Stock Exchange Group (LSEG).The chancellor, via her “Leeds Reforms”, is trying to “rewire” the financial system by encouraging more financial risk-taking by companies and consumers.
An eye-catching big number for the Footsie – after a year in which it rose 21,5% and outperformed US equivalents for a change – sounds like an open goal if you wish to nudge savers out of safety-first cash ISAs,There was no need to ruin the message with overblown claims about confidence in the UK economy,As for LSEG, it constantly runs into the accusation that it doesn’t bestow enough care and affection on the London exchange because it has a far bigger operation selling financial data (including index compilation),The criticism is slightly unfair, but here was a chance to engage in a bit of that “hustle” that the Octopus Energy boss, Greg Jackson, who is looking to list the group’s £6bn Kracken Technologies software subsidiary, recently called for.
But there were no fireworks over Paternoster Square – or even “FTSE 10,000” baseball caps in the style of those that are often distributed on Wall Street when a round number for the Dow Jones industrial average is reached.Maybe the showbiz stuff is too embarrassingly American but if ever there was a time to drop the reserve, it was surely now.A collection of City banks, investment platforms, fund managers and the stock exchange itself is preparing to fund – to the tune of £15m a year, reportedly – a national advertising campaign “to explain the benefits of investing”.They could have saved themselves a few quid by milking the 10,000 moment.Yes, it would be gimmicky.
Yes, US indices have performed better over the long run.Yes, you look foolish if there is a rapid reversal.But you take these opportunities when they arise, don’t you?
AI consciousness is a red herring in the safety debate | Letters
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Name: Friction-maxxing.Age: Brand new.Appearance: A lifetime of happy inconvenience.Is this another example of something that already exists, but people think is new because someone rebranded it? Yes, obviously it is that.Great! Let’s all save time by you telling me what it used to be called
Wave of Grok AI fake images of women and girls appalling, says UK minister
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‘I felt violated’: Elon Musk’s AI chatbot crosses a line
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Nvidia CEO reveals new ‘reasoning’ AI tech for self-driving cars
The billionaire boss of the chipmaker Nvidia, Jensen Huang, has unveiled new AI technology that he says will help self-driving cars think like humans to navigate more complex situations.The world’s most valuable company is to roll out the new technology, Alpamayo, which is designed to help self-driving cars handle tricky situations such as sudden roadworks or unusual driver behaviour on the road, rather than just reacting to previous patterns.Nvidia claims Alpamayo will bring chain-of-thought reasoning to self-driving vehicles, combining what the car sees with language-like reasoning.In a speech at the annual Consumer Electronics Show in Las Vegas, the Nvidia founder and chief executive said: “The ChatGPT moment for physical AI is here, when machines begin to understand, reason and act in the real world. Robotaxis are among the first to benefit
Leading AI expert delays timeline for its possible destruction of humanity
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