October was, to put it mildly, an eventful month. It was a month which saw the majority of markets on which we report down steeply, as fears of higher interest rates in the US combined with worries about the US/China trade war. There was, however, one market that went up sharply: Brazil elected a new president – a man who, I suspect, will feature prominently in future commentaries.
In the UK, the Prime Minister survived the latest round of calls for her head, and the Chancellor delivered his Budget a month earlier than everyone had expected. Continue reading →
On Tuesday, 3rd November 2020 the United States will go to the polls to elect its next President. All the indications are that Donald Trump will stand for a second term and if the words of Bill Clinton – “It’s the economy, stupid” – are to be believed, he will win.
While not wanting to make a political comment or endorse his policies in any way that be welcome to some extent – he does provide plenty of news and entertainment for these commentaries, after all. September was no exception, as he ramped up the trade war with China, ordering tariffs on a further $200bn (£154bn) of Chinese imports, which will include electronic products and consumer goods such as handbags. Continue reading →
This time last year we produced our first End of Summer Review. We described it as a ‘reflection on some key events over the last few months’: would they, we wondered, ‘give us an idea of what might happen in the run up to Christmas?’
First of all, let’s reflect on what the world looked like 12 months ago. Continue reading →
August used to be known as the ‘silly season’. Everyone who made the news was away on holiday, nothing happened and newspapers were desperate to fill their pages. So rather more obscure stories made it into print…
That, of course, was before Donald Trump. And Brexit. And Venezuela, Argentina and Greece. And…
In short, August is now just another month and this year it saw the world’s two most powerful economies, the USA and China, continuing their trade war as the US imposed an additional round of tariffs on Chinese imports and Beijing inevitably retaliated. Domestically, there were more woes for Donald Trump as more members of his former inner-circle decided they would rather do a deal with the prosecutors than the President. Could he be impeached? At this stage it would seem unlikely but the net is tightening. Continue reading →
The news in July really could not have been much worse. The threat of a trade war between the US and China simmered throughout the month, and then on 31st July President Trump ramped up the tension with proposals of a 25% tariff on $200bn (£152bn) of Chinese imports.
China has already placed retaliatory tariffs on some American imports in response to the first wave of ‘Trump Tariffs’ (they even have their own page on Wikipedia now) and will surely do the same to counter this latest move. Small wonder that credit ratings agency, Moody’s, warned that there could ultimately be tariffs on 5% of total world imports if the trade war continues to escalate. Continue reading →
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Let us invite you to travel back in time to June 2016, to the day after the Brexit referendum. Meanwhile, across the Atlantic, campaigning in the US Presidential election is in full swing.
You are offered two glimpses into the future. The first is that two years on, the UK has apparently made no real progress in the Brexit negotiations. The second is that Donald Trump has been elected President and has had a successful meeting with Kim Jong-un. You would have dismissed both of them as ridiculous and yet that is exactly what June brought us, as Theresa May called yet another Brexit crisis meeting and President Trump met the leader of North Korea in Singapore.
…And then the President went on to announce a raft of tariffs on imported goods – from both China and Europe – which may well see the threatened global trade war develop. Both China and the EU were swift to announce retaliatory tariffs, and (unsurprisingly) June was a month in which none of the major stock markets we cover managed to gain any ground. Continue reading →
“The first month of 2018 was a good one for the major stock markets which we cover in this Bulletin. We report on 12 markets and 11 of them made gains in January – in some cases, spectacular gains, which many investors would regard as more than adequate for a full year.”
Sadly, February was the exact opposite: 10 of the 12 markets on which we report were down in the month, following a global sell-off at the start of February. But that is the nature of savings and investment: stock markets rise and fall. Saving and investing is a long term business: a marathon not a sprint. Continue reading →
The first month of 2018 was a good one for the major stock markets which we cover in this Bulletin. We report on 12 markets and 11 of them made gains in January – in some cases, spectacular gains, which many investors would regard as more than adequate for a full year. But sitting alone on the naughty step was the UK: as we shall see below there was plenty of good news for the UK in the month but, dogged by uncertainties over Brexit, continuing doubts about Theresa May and the collapse of Carillion, the FTSE fell 2% in the month. Continue reading →
This last week has seen financial market corrections all over the world, with markets handing back the strong gains made since the start of the year. During discussions with clients this week some have asked why has this happened now? Ironically it all started with good news in the United States last Friday. This came in the form of higher than expected wage growth for workers. This in turn means that the US economy is doing well. But, at some point the Central Bank in America (The Fed) will have to increase interest rates to try and curb the rise of inflation.
Financial markets generally don’t like it when interest rates have to rise, although that sometimes this is inevitable. And so we have seen the equity markets react all around the world. There is a very old saying in finance – when Wall Street sneezes – the rest of the world catches a cold. And so this saying is still true today because with what happened in the US last Friday has sent a shock wave around the other parts of the world.
However, is this a start of a global downturn? Absolutely not in our opinion. The fundamentals of the global economy are still very strong. We are some way off a recession in many parts of the world, certainly in the US. It is just the financial markets having a little correction, that’s all. Ironically, we have had such a good run over the last 18 months or so that volatility (the downside of markets) has been something we are not used to. We have to get back to being used to it, simply because the way financial markets have been for the last 18 months is not really normal.
What should you do? If you have spare cash make use of the Impulse Save feature on the website, because it is a great time to add money to your portfolios. If you haven’t got spare cash do nothing, apart from stay off your website. As I always say ‘when financial markets are making the number one headline on the news, then you know it’s bad’ so leave off it for a while. Honestly, that is the best thing to do.
Another year seems to have flown by in the space of about five months. December, in particular, seemed to go past in a blur.
It was, however, the month when some progress was – finally – made in the Brexit negotiations. It was also the month when Scotland used its tax-raising powers to increase income tax, when Germany worried about Chinese spies using fake LinkedIn profiles and when yet more sanctions were heaped on the North Korean regime – which were predictably condemned as an ‘act of war’. Continue reading →
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