Making sense of this crazy world
The first half of the year has ended with investment markets in remarkably good health. Despite ongoing geopolitical tensions, inflation concerns and questions over interest rates, equity markets have continued to push higher. Technology remains a key driver, but, encouragingly, we are now seeing gains broaden into other sectors, suggesting confidence is becoming more widespread.
This week, we’ll look at what has been driving markets, whether alternative assets deserve a place in portfolios, how governments across Europe are grappling with the rising cost of state pensions, the outlook for inflation, and why enormous spending on artificial intelligence may be entirely rational.
Plus, if you are looking for a tenuous good luck omen, then the UK stock market has outperformed the Mexican market this year!
This week’s content:
- Markets finish the quarter on a positive note
- Will state pensions have to change?
- Gold and cryptocurrency: worth considering?
- Renewable energy, geopolitics and inflation
- How is UK inflation really looking?
- Why ‘wasted’ AI spending may be money well spent
Markets finish the quarter on a positive note
The global economy continues to show greater resilience than many expected. Growth remains positive, inflation is easing gradually, and oil prices have retreated from recent highs. While central banks remain cautious, investors have taken confidence from improving economic data and another strong quarter for global equities.
Technology continues to lead performance, with South Korea’s technology-heavy market rising sharply this year. Even the usual end-of-quarter portfolio rebalancing failed to dent sentiment for long. As one market analyst observed, every meaningful dip is still attracting buyers.
Away from technology, it was equally encouraging to see money rotating into more defensive sectors such as healthcare and utilities. That broadening of market leadership is generally a healthy sign and supports our view that opportunities extend beyond the largest AI names.
In the UK, internationally focused FTSE 100 companies continue to outperform more domestically focused businesses, reinforcing our recent portfolio positioning.
Continues…
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Our CEO, Gary Neild, writes 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.