Some interesting dynamics across markets over the last few days. We have seen technology stocks regress, spooked by comments around tougher restrictions with Asia.
Conversely, smaller company stocks were buoyed both here and in the US on the back of possible interest rate cuts and hope that in the UK, Labour policies will be orientated towards growth.
The latest data shows that wage inflation has slowed which is exactly what central banks want to see. The markets in the US are now factoring in three rate cuts. Only five weeks ago there was talk of possible further rate rises!
In the UK there is a slight concern that Labour’s spending plans for boosting the economy may prove inflationary, but the markets are suggesting a rate cut could happen in August.
The change in dynamics is likely to result in us tweaking our emphasis across selected portfolios, with the mid-cap index looking attractive, coupled with some smaller companies for the higher-risk strategies. We have our quarterly investment meeting on Tuesday when we will discuss our options, although we are very mindful about making reactive decisions based on short-term market movements.
Finally, we are delighted to announce that we have launched, in conjunction with Legal and General Investment Management (LGIM), a new bespoke portfolio with institutional prices. This new service is discretionary in nature and assets can be bought more cheaply than on the open market – like buying wholesale rather than retail. More about this later.
So our agenda this week includes:
- Tech stocks regress
- Smaller companies given a boost
- Once seven rate cuts, then none and now three!
- It’s no good waiting much longer!
- A softening labour market in the US
- UK wage inflation reduction
- What does all this mean for the markets?
- Blue Sky’s new investment offering
- Summary
Tech stocks regress
Semiconductor stocks tumbled on Wednesday after former US president Donald Trump said Taiwan should pay for its own defence and the US was reported to be considering tougher restrictions on trading chips with China, according to ft.com.
Continues…
Want to continue reading?
Our CEO, Gary Neild, writes an engaging Market Commentaries every week. If you would like to receive the full version straight to your inbox every Friday, please join our communications list.
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.