Making sense of this crazy world
I’ve started this communication on the Isle of Brac in Croatia, and am now finishing this off in my office… in Poole. If I were to shut my eyes though, I wouldn’t know where I was, as there is no discernible difference in outside temperatures.
I’m very glad I’m not playing tennis at Wimbledon, or playing football in Mexico City at altitude. If only Trump could change the weather… he seems to get involved in everything else! Neutral observers were, of course, pleased to see Belgium thump the US in the last round.
It’s like déjà vu back in the Strait of Hormuz with Trump’s rhetoric driving an even bigger wedge between the two entities. On saying this, Iran’s attack on three oil tankers was the catalyst. It appears that there is a long way to go before any semblance of peace can be agreed.
In response, oil prices rose, as did bond yields, over heightened fears of the possibilities for elevated inflation.
Kevin Warsh, the new Federal Reserve Chairman, reinforced that he will have no hesitation in raising interest rates and won’t be beholden to the markets.
Today, I’m also going to take a deeper dive into the tech landscape because it’s clear that “all boats aren’t rising with the tide”. Specific reference will be given to Nvidia and South Korean tech stocks, with the latter having officially entered bear territory.
Defence stocks keep bouncing around too. Sentiment seems very mixed, and as a result, we are seeing significant share price movements. Several European countries have declared their backing for a further $50 billion defence investment.
This week’s content:
- Oil prices rise, and bond yields follow suit
- The global economy has been more resilient than forecasted
- US interest rates will be more responsive to inflation
- Not all boats are rising with the tide
– Nvidia worth less than Hershey!
– Bear market territory for South Korean stocks - Defence stocks are proving volatile
- Conclusion
Oil prices rise, and bond yields follow suit
The US has carried out a new round of strikes in Iran, revoking a waiver allowing new sales of Iranian oil, further jeopardising a peace agreement. The American actions marked the most serious threat yet to the interim agreement signed on the 17 of June.
Oil prices rose while bonds retreated across most of Asia as the renewed tensions sparked fears of energy supply disruptions. The broader equity market wobbled slightly on the news but is recovering its poise.
It’s interesting how quickly the global market has found alternative solutions to its energy needs and has adapted to the crisis. The peace deal has helped, buying time to implement various options.
Continues…
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Risk warning
Please Note: This communication should not be read as giving specific advice regarding your personal circumstances. This would only be given following detailed assessment of your individual needs. The value of investments may fall as well as rise; you may get back less than invested. Past performance is not necessarily a guide to future returns.