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 →
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 →
To say that March was a busy month is an understatement.
Russia went to the polls to elect a new President and, in the least surprising result of the year, Vladimir Putin won another six year term. With the Chinese Communist Party removing the rules limiting Xi Jinping to two terms in office, two of the world’s three superpowers now effectively have presidents for life. North Korean leader, Kim Jong-un, jumped on the train and headed to Beijing for talks, ahead of his meetings with Moon Jae-in, the South Korean leader, and with Donald Trump. Presumably Kim and Xi Jinping did not discuss sanctions: China is supposedly imposing harsh UN sanctions on North Korea – and yet Kim saw his economy grow by more than 3% last year. ‘Curious and curious-er’ as Alice would have said. Continue reading →
With markets around the world continuing to prove unpredictable as momentous financial and political events continue to unfold, it’s perhaps not a surprise that investors are increasingly concerned about when the ‘best time’ for them to invest might be. Many of these people will decide to hold off on making an investment, choosing to keep their money out of the markets in order to see what happens. 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.
Given all the uncertainty, how have the world’s major stock markets performed in the first eight months of the year? By and large, the answer is ‘well’. The UK’s FTSE-100 index of leading shares opened the year at 7,143 and closed August at 7,431: that is a modest gain of 4% but given all the uncertainty surrounding Brexit, a gain nevertheless. The two major European indices, Germany and France, are both up by 5%, whilst in America the Dow Jones index is up by 11% at 21,948. The Dow clearly likes what it sees of President Trump’s economic policies. Continue reading →
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