Gary is holidaying in the South of France this week, living true to our ethos of “enjoying your money whilst you have good health”! So, this weekly communication is written by Andrew Dunn – known to many of our clients as Gus.
We’ve also included below a recording of Gary’s recent conversation with Phoebe Stone at LGT Wealth Management entitled ‘Reasons to be cheerful’.
On our agenda this week:
- Markets Dip on US Rate Cut Uncertainty
- The European Response
- Investing in Japan
- UK Election Impact
- Why a vibrant UK stock market is good for us all
- Summary
Markets Dip on US Rate Cut Uncertainty
All main markets fell back slightly over the last week, largely driven predictably by news from the US. In the absence of any major economic or market news jitters, the scale and timing of interest rate reductions were again cited as the reason for the pullback.
There was also a poorly supported series of auctions for US Treasuries (our Gilts and the way governments raise debt). This implied that investors were not keen to take the rates of return offered as a sign that future inflation remained a concern. These create higher bond yields which, seen as a risk-free return, make the variable return from shares less attractive.
Last month over two-thirds of economists surveyed expected interest rate cuts to start in September but this is now well under 50%. Comments from a Federal Reserve President saying that they need “many more months of positive inflation data” also spooked investors.
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.
