Strong jobs data fuel US rate rise expectations

US Briefing – The Dow Jones Industrial Average Index , the S&P 500 Index and the Nasdaq Index all reached new highs during August. Over the month as a whole, the Dow Jones Industrial Average Index fell by 0.2% and the S&P 500 Index edged 0.1% lower, while the Nasdaq Index rose by 1%. The … Continue reading “Strong jobs data fuel US rate rise expectations”

Yen’s fluctuations continue to affect markets

Asia including Japan Briefing – Medium-sized Japanese companies outperformed their larger counterparts during August as exporters remained hostage to the yen’s strength. The Nikkei 225 Index and the Topix Index rose by 1.9% and 0.5% respectively over the month; in comparison, the TSE Second Section Index climbed by 2.8%. Better-than-expected US employment data fuelled expectations … Continue reading “Yen’s fluctuations continue to affect markets”

UK base rate falls to record low

UK Equity Growth Briefing – UK equity markets delivered a relatively muted performance during August as investors’ attention continued to focus on monetary policy – both domestic and overseas – and on ongoing fluctuations in the price of oil. The Bank of England (BoE) cut UK interest rates to 0.25% during the month, and also … Continue reading “UK base rate falls to record low”

European markets deliver mixed performance

Europe briefing – Although the overall performance of European equity markets was relatively muted during August, returns at individual country level were rather more mixed. Ireland generated a strong performance during the month, and the benchmark ISEQ 20 Index rose by 4.7%. Research from Bank of Ireland suggests that confidence amongst Irish businesses and consumers … Continue reading “European markets deliver mixed performance”

US interest-rate outlook dominates attention

Global Briefing – Investor sentiment during August was influenced primarily by the outlook for US interest rates and ongoing volatility in the price of oil . Better-than-expected jobs data provided a boost for US stock markets during August and stoked expectations of higher interest rates before the end of 2016. Federal Reserve (Fed) Chair Janet … Continue reading “US interest-rate outlook dominates attention”

A bull in the China shop?

The Chinese stock market has been making some upward progress this year after the dramatic boom and bust cycle it went through in 2015. The authorities had a plan to involve more Chinese people in the stock market, and to gradually open Chinese shares to more foreign capital and influence. Unfortunately for them, individual investors … Continue reading “A bull in the China shop?”

The case for a UK fiscal reset

With monetary policy measures catching all the headlines this week we thought it worth reflecting on the other side of the equation: fiscal policy. Chancellor Philip Hammond has said that the UK may have to “reset” fiscal policy in the wake of the referendum vote. This sentiment appears to chime with the mood music at … Continue reading “The case for a UK fiscal reset”

Expect a slow burn in Jackson Hole

Jackson Hole won’t reveal when the US Federal Reserve (Fed) will hike rates again. But it might reveal what the Fed is thinking about where the US is going over the long term. Things have moved on a lot since Jackson Hole started out as a small conference about agricultural economics. It’s now a major … Continue reading “Expect a slow burn in Jackson Hole”

Recession looks very unlikely in the UK

It is unlikely that there will be a recession in the UK this year or in 2017. In March, the Treasury forecast 2% growth for this year and 2.2% growth for next. Just before the referendum campaign began, the Treasury set out its fear that a Leave vote could put the UK into recession, owing … Continue reading “Recession looks very unlikely in the UK”

Worries should rise when complacency builds

A new Bank of England index measuring uncertainty shows investors are remarkably complacent about Brexit. The Bank’s Quarterly Inflation Report now contains an uncertainty index. It pulls together a range of market, survey and forecast variables to show how much uncertainty there is during a particular month compared to the historical average (or what you … Continue reading “Worries should rise when complacency builds”

What is a safe amount to take from a pension?

Figures for the UK show high pensions withdrawals. It highlights the challenge for pensioners in many countries trying to work out how much income they can safely draw. Nearly half of those withdrawing money from pensions may be doing so at an unsustainable rate, according to analysis of industry figures by Schroders. It once again … Continue reading “What is a safe amount to take from a pension?”

China’s Black Monday – one year on

This week marks the anniversary of last year’s stock market crash that some have dubbed China’s Black Monday. Shanghai shares fell 8.5% on August 24, triggering losses on exchanges around the world and causing mayhem in currency and commodity markets. Apart from the financial losses, the market meltdown damaged the reputation of China’s policymakers. The … Continue reading “China’s Black Monday – one year on”

Are negative rates helping?

These three charts suggest not. Desperate times have prompted desperate measures. But is the extreme medicine working? Savers and investors may wish to look away now. Savers and investors need economies to grow: it’s good for company profits that flow back to investors and it helps keep interest rates stable for savers. This all makes … Continue reading “Are negative rates helping?”

Monetary policy: a bridge over troubled waters?

“The European Central Bank’s actions can only build a bridge to the future. The project must be completed through decisive actions by governments – both individually and collectively – to address the underlying causes of our current challenges.” – European Central Bank President, Mario Draghi, September 2012. Eurozone:  And friends just can’t be found Mr … Continue reading “Monetary policy: a bridge over troubled waters?”