Making sense of this crazy world
Sunny greetings from Spain this week. I believe back home it’s just as good, if not even better!
Strange times we are living in… bond yields have been rising, which should worry investors, yet stocks are bouncing ever higher. Before the markets pushed on from Wednesday, UK stocks were on their longest losing streak for two months. Then came good news on inflation, with interest rate rises now less likely. A sigh of relief for investors.
The technology frenzy continues with OpenAI expected to be filing for an IPO in the coming weeks (an Initial Public Offering, i.e. launch on the stock market). SoftBank, a major shareholder in OpenAI, saw its share price rocket.
Elon Musk’s SpaceX has also filed for an IPO on the Nasdaq in the coming weeks – at a time when the company has billions in losses. Musk wants a super-voting structure which will keep him firmly in control.
This week, it’s been Putin’s turn to meet Xi Jinping. There are some encouraging noises but, just like with Trump, no significant detail. China holds the cards in so many ways, and it would appear they are the best hope to bring about resolutions in Ukraine and Iran.
Trump is a deal-maker; the problem is, he alone seems incapable of delivering what he wants.
Back home, the poster boy of the Labour Party is grabbing the headlines, but how will Burnham make a difference if he gets into power?
This week’s content:
- A sigh of relief as UK inflation falls
- Can Burnham make a difference?
- Technology frenzy continues
- Can Xi Jinping bring peace?
- The art of not making a deal
- Ships through the Strait of Hormuz
- The Iranian conflict is gradually impacting growth
- Conclusion
A sigh of relief as UK inflation falls
UK inflation dropped to 2.8% in April, down from 3.3% in March, according to the Office for National Statistics, a larger decline than most economists expected.
The fall was attributed to lower gas and electricity bills following Ofgem’s reduction in the energy price cap. Food inflation also eased, while package holiday prices fell compared with a year ago. Of course, it’s easy to see how these lower costs could rise again.
Not helping matters is the rise in unemployment data. 100,000 jobs were culled in April. Levels of pay also slowed.
The latest data reduces the chances of the Bank of England increasing interest rates when they next meet on the 18th June.
Continues…
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