China and Taiwan tensions build

President Xi Jinping’s statement that Taiwan is properly part of China and will be fully integrated one day is not new policy. Nonetheless it seemed to upset the Hong Kong market, and made investors wonder whether there was to be a new tougher phase in China’s relations with the very successful island economy of Taiwan. … Continue reading “China and Taiwan tensions build”

Trade deal leaves considerable uncertainty

President Trump decided to sit down with President Xi after all at the G20 Summit in Argentina. He had blown hot and cold about whether it was worthwhile to do so, and had threatened to carry on with his increases in tariffs on Chinese goods ahead of the meeting. Markets should be growing used to … Continue reading “Trade deal leaves considerable uncertainty”

A slowdown in the world economy worries markets

Japanese interest rates are negative, Euro-area rates are still at zero, the UK official short-rate is at 0.75% and in the US at 2.25%. The Japanese are still running a quantitative easing programme, printing money to buy up state debt, and the Euro-area is doing a little bit more of the same until the end … Continue reading “A slowdown in the world economy worries markets”

How has Japan’s economy fared?

The Japanese economy shrank in the third quarter. Poor export performance combined with a small reduction in demand at home to produce a 0.3% contraction. Japan is quite exposed to the dangers of the trade war, with good exporting companies needing a favourable background for their products. It also finds it difficult to expand domestic … Continue reading “How has Japan’s economy fared?”

Inflation and capacity

There is a danger that central banks will tighten too much. Part of the market plunge during October was a response to tougher money conditions around the world. The Federal Reserve in the US is well advanced with a programme of rate rises. At the same time, it is supervising the rundown of its portfolio … Continue reading “Inflation and capacity”

Market Turbulence

Market falls never feel pleasant, but for those with long-term investment horizons there is no need to panic. Fluctuations, sometimes significant ones, are to be expected during the course of investing; and for those requiring the assurance of no fall in capital the only asset class that can be considered is cash. This is the … Continue reading “Market Turbulence”

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”

Will Trump policy hasten the collapse of the dollar?

The world’s acceptance of the dollar as its reserve currency has been positive for Americans. But with Donald Trump’s America First policy, will the world move away from the greenback. When world leaders laughed at Donald Trump’s comments in his address to the United Nations last week, it was an insight into the new world … Continue reading “Will Trump policy hasten the collapse of the dollar?”

How much damage will the trade war do?

Trade wars are not good news. Mr Trump’s imposition of tariffs on another $200bn of Chinese exports helped drag eastern markets down ahead of the event. Forecasters and pundits fear that the tariffs will curb exports and activity in Chinese factories, push up the price level a little in the US and adversely affect the … Continue reading “How much damage will the trade war do?”

Russian influence on Western markets

The Russian stock market remains cheap by Western standards, with people applying a Russian discount for the political risks. The market is dominated by the large oil and gas enterprises including Rosneft, Lukoil, Gazprom and Surgutneftegas, and has done well since 2014. Much of the gain has come from the rise in energy prices increasing … Continue reading “Russian influence on Western markets”

Trade wars should not derail growth

Markets worry about a trade war, and relax when they think it is about to be settled. Mr Trump’s attempts to negotiate new trading terms are often called a war but it’s actually a hard negotiation. The President threatens or imposes higher tariffs with a view to getting the other side to propose lower ones … Continue reading “Trade wars should not derail growth”

Commercial property gloom is unjustified

People involved in assessing the value of UK commercial property became very gloomy after the Brexit vote. They often marked valuations sharply lower, by 10% to 15%, only to discover there were plenty of buyers at new levels and no decent stock to sell. They argued there would be less space required, especially in central … Continue reading “Commercial property gloom is unjustified”

Genoa tragedy sets Italy on course for EU clash

The tragic loss of lives in Genoa when a large section of an elevated motorway collapsed is one of those dreadful events that should not have happened. We all feel for the families scarred by loss. It is a big event which is having a dramatic effect on Italian politics and government. This matters at … Continue reading “Genoa tragedy sets Italy on course for EU clash”