“This town ain’t big enough for the both of us!”
I had intended to evaluate the UK state pension and how we, as a nation, compare with the rest of the developed world. However, I’m going to push that onto next week when I’ll focus on some broader financial planning strategies.
There is a lot of ground to cover today, so here goes:
Surprise, surprise, Donald and Elon have fallen out! It was odds on from the very start, wasn’t it? Two of the biggest egos in the world, working together, were always doomed to end in tears. After their carefully staged theatrics at the White House when Musk was presented with a certificate, the gloves have been off as they have since traded punches. Tesla shares fell 14% on the news that Trump is threatening to end Musk’s government contracts. In response, Musk has suggested that they cool tensions and has a scheduled conciliatory call with Trump today.
Less of that spat. Despite all the turmoil, this week I read the headline ‘global stocks hit an all-time high’. We’ll dig down into this statement because this certainly isn’t true for some indices. The US, in particular, is experiencing an investor drag as investors focus on other geographies and sectors. Not helping matters is that business confidence in the US is weakening, despite earnings proving resilient to date.
It’s not just in the US where job cuts are on the increase too, these are happening around the world. Whilst deemed to be bad news, this may be good for stock prices as companies become leaner, and it probably improves the prospects for interest rate reductions.
Yesterday, the Eurozone reduced its rates yet again by 0.25%, meaning that it’s halved its interest rate level over the last year from 4% to 2%. The Eurozone is certainly attracting interest as there is a shift in sentiment towards other markets, away from the US.
Whilst interest rates haven’t fallen anything like that of the Eurozone, UK property sales, according to Rightmove, have increased by 6% from May 2024. Difficult to believe, so what lies behind the figures?
Finally, automakers are up against it as China controls most of the rare earth production globally. This has implications for tariff negotiations and the outlook for motor companies such as Mercedes and BMW, along with many other industries.
This week’s content:
- “Global stocks hit an all-time high.” Really?
- US business confidence is weakening
- Global job cuts are becoming evident and more widespread
- European interest rates cut yet again
- Eurozone benefits from US weakness
- The weaker dollar makes emerging markets look attractive
- UK property sales rise 6%
- Rare earths are a bargaining chip
- Summary
“Global stocks hit an all-time high.” Really?
All the uncertainty around tariffs, the war in Ukraine and concerns about the US’s mounting debt crisis, on the face of it, would suggest concerns more akin to a ‘bear’ market. Yet the MSCI World Index has regained its poise and beaten its previous record high, posted back in February.
Continues…
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