The forgotten bear market in China

In the summer of 2015, the Chinese authorities overdid their enthusiasm for wider share ownership. With their general encouragement, brokers advanced large sums to individuals to buy shares. A buying frenzy developed in the markets and the Shanghai index hit a new high of 5,166 in June. The government decided things were getting out of … Continue reading “The forgotten bear market in China”

EU caught up in internal war of words

The President of the EU Commission had some choice words to say about the Italian budget dispute. Jean-Claude Juncker argues that Italy has to keep to strict budget limits on spending and borrowing that has been laid down by the EU. He went so far as to suggest it would mean the end of the … Continue reading “EU caught up in internal war of words”

Trade and banking matters hit China

The Chinese economy is one of the two giant economies in the global market. We have got used to relying on China to produce growth of more than 6%, and to supply a wide range of manufactured items at attractive prices. The combined effects of a huge expansion of Chinese manufacturing capacity, and the digital … Continue reading “Trade and banking matters hit China”

Europe’s struggle to break free

At the start of 2018, it looked likely that interest rates could start to rise across Europe, signalling the end of the necessary post-crisis readjustment in the financial sector. However, as is often the case, the themes that drive markets at the start of the year can often be forgotten by the end. As 2018 … Continue reading “Europe’s struggle to break free”

Turkey: an idiosyncratic problem or a threat to wider emerging markets?

Turkey has seen a temporary resolution to its current crisis with the injection of $15bn of Qatari cash, but it is still in crisis. The Qatar offer, from Sheikh Tamim bin Hamad Al-Thani, is designed to help the country ride out its currency crisis, which has seen the lira plunge. However, it is a short-term … Continue reading “Turkey: an idiosyncratic problem or a threat to wider emerging markets?”

Globalisation – Nothing new under the sun

There is nothing new about geopolitics. Geography – both physical and human – has influenced politics and international relations for centuries, even millennia. But the nature of geopolitical risk has changed over time. During the Cold War, geopolitical risks for Western governments and the corporate world were focused on Moscow’s motivations and behaviour, the possibility … Continue reading “Globalisation – Nothing new under the sun”

It’s Oh So Quiet…

Here are the key factors that Whitechurch Securities believe have influenced investment markets in recent weeks. Markets rose early in June only to fall back towards the end of the month as Central bankers took the limelight from politicians and investors moved into more of a risk-off mode. The Federal Reserve spooked investors with fears … Continue reading “It’s Oh So Quiet…”

Down But Not Out

February started where January left off – providing investors with a timely reminder that global markets fall quicker than they rise. Strong US employment numbers and evidence of wage growth fuelled investor concerns over inflation and the prospect of a more aggressive US interest rate cycle. This led to a sharp sell-off in equity markets … Continue reading “Down But Not Out”

What does a normal interest rate look like?

Markets have been worried that interest rates in the west are heading back to normal in a hurry. If rates go too high too soon they could damage the recovery and do more harm to shares. As the West agonises over the pace of putting up interest rates and winding down special monetary measures, the … Continue reading “What does a normal interest rate look like?”

After the melt up

In January we saw shares rising rapidly, in what some called a melt up. In the last few days they have come back down again very quickly. The year’s gains were rapidly erased. Should we worry? Last week before the fall I wrote that “There will be bad times from time to time. Worrying about … Continue reading “After the melt up”

Farewell to 2017

Is it better to travel than to arrive?  The US share market has done well this year.  It has been in fitful anticipation of tax cuts to come.  As the old year draws to a close the tax cuts have as we expected taken legislative form. The US growth rate has risen, exceeding 3% as … Continue reading “Farewell to 2017”

Keeping the faith: now is not the time to abandon inflation targets

Monetary policy is at an inflection point. The extraordinary support from central banks is being gradually scaled back as economies improve and financial markets remain calm. Yet investors remain sceptical about how much central banks will raise interest rates by, because inflation remains stubbornly low across most of the advanced world. Historically, declining unemployment has … Continue reading “Keeping the faith: now is not the time to abandon inflation targets”

US tax cuts: do the sums add up?

The US Senate recently passed its tax bill supporting the Trump administration’s tax reform measures, which call for a $1.5 trillion net tax stimulus. Supporters of these tax cuts have argued they will result in stronger economic growth, as did the tax cuts of Ronald Reagan in the 1980s and George W Bush in the … Continue reading “US tax cuts: do the sums add up?”

Fed raises US rates once again

The US Federal Reserve (Fed) raised its key interest rate by 0.25 percentage points at its December meeting. It is one of Janet Yellen’s final major acts as head of the US central bank.  The Fed left its rate outlook for the coming years unchanged from its projections in September.  This is the fifth increase … Continue reading “Fed raises US rates once again”

Signal or noise? Political risk in 2018

Proliferation of weapons of mass destruction. Terrorism. Populism. A newly emboldened Russia. The world is an unsettled place, but financial markets are relatively calm. A few factors could yet jolt them. US equity markets have generated significant gains over the last year, despite the headlines speculating over possible Russian interference in the US presidential election, … Continue reading “Signal or noise? Political risk in 2018”