Feeling blue?
Well, I certainly was on Sunday at Goodison Park for Everton’s last ever home game after a 133-year tenure. A brilliant day, although due to various circumstances, I only managed to get a ticket and get into the ground with five minutes until kick off…but get in I did!
I’m pleased to say, the markets aren’t feeling blue, although the recent enthusiasm has been tempered by US bond yields rising on the back of the downgrade by the ratings agency, Moody’s. No surprise really with what’s going on, but it’s just a reminder that the pressure is building in the US economy, especially now tax breaks look like being sanctioned.
Inflation data points took a fall in the US and a rise in the UK. Before any real conclusions can be drawn, however, we need to wait to see what the real impact of tariffs are. This will take some months, especially due to the renegotiations taking place.
In the meantime, the general trend is for investors to broaden their allocations away from the US to create diversification and to seek opportunities, especially with forecasts on the US economy not looking too appetising.
This week’s content includes:
- Markets pull back on US fears
- Investors flock to other equity markets
- Emerging markets and their wasted years
- JPMorgan favours Europe
- A fan of Rachel Reeves
- The Vix index has normalised… for now!
- Summary
Markets pull back on US fears
After a stellar run for equities, something had to give and create worry beyond the relief rally. How the markets will pan out over the next few months is extremely difficult to predict, but forecasts for various indices have been elevated by many analysts.
What is worrying markets at the moment is the swelling US deficit. Yields on 30-year treasuries rose to 5.14%, close to a two-decade record. High bond yields are a sign of stress. US equity markets are concerned that Trump’s tax cuts are going to make things worse, at a time when US assets appear out of vogue.
Continues…
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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.
